We are proud and excited to announce that Hermez, one of the most prominent zero-knowledge (ZK) cryptography-based scaling projects and teams, will be joining Polygon. Starting today, we will initiate the process of merging Hermez into the Polygon ecosystem, where it will be operating under the new name: Polygon Hermez. Polygon Hermez will become a part of the growing Polygon suite that already offers solutions such as Polygon PoS, Polygon SDK, Polygon Avail, etc. The maximum amount that will be committed for this merger from the Polygon treasury is 250M $MATIC tokens, or roughly $250M based on the price at the time of reaching the agreement (August 4, 2021).
This merger is our first big foray into the ZK scaling field after we publicly announced ZK-based solutions as our strategic focus moving forward. More details on this strategic decision can be found in our ZK thesis.
We at Polygon are very excited about this merger, for several important reasons:
- Hermez is live: We at Polygon are first and foremost engineers and builders; we highly value shipping. The Hermez team shares the same values in this regard; they have been passionately working on Hermez and now it is a fully functional, decentralized rollup processing thousands of transactions and verifying them on Ethereum L1.
- Hermez has a great team: Hermez is a team of 26 great people with various expertise. We know each other well, we share the same values and we can not wait to start working together. The team is spearheaded by the legendary Jordi Baylina, one of the most prominent and most respected contributors to Ethereum. His involvement in Ethereum started when he helped rescue TheDAO hack funds, and ever since then he has been actively contributing to the ecosystem. In recent years, he turned his focus to building ZK-based systems, primarily focused on scaling, privacy, and identity.
- Hermez is building an EVM-compatible solution: EVM is the de facto standard for blockchain development. We at Polygon are aware of the importance of EVM compatibility; the adoption of our PoS chain happened in big part thanks to it. When we decided to focus on ZK solutions we had this in mind, and the fact that Hermez already has a roadmap and is actively working on introducing EVM compatibility was another big signal for us that joining forces makes a lot of sense. More details about Hermez’s zkEVM can be found in the official announcement.
- Hermez is the only decentralized rollup: Rollups are very popular solutions at the moment and there are great expectations from them in terms of improving security and decentralization. However, today’s rollups are still in early phases of development, normally with important components like operators fully centralized. The Hermez team didn’t want to compromise on this, especially since decentralizing components like operators might turn out to be quite challenging at a later point, both technologically and operationally. Hermez has a decentralized operator model built into the protocol and already live on the mainnet, and we are looking forward to working with them on improving it even more.
- Hermez loves Ethereum, just like Polygon: Hermez is a true Ethereum ecosystem project. Besides their work on Hermez (which is 100% Ethereum-focused), Jordi and the team contributed a lot to the ecosystem by providing useful tools, libraries, identity solutions, audits etc. Polygon is fully focused and aligned with Ethereum as well, so we are confident that we will be able to work really well together and contribute even more.
- This merger will be the first full-blown merger of one blockchain network into another: M&As in the traditional tech world are an everyday thing. In blockchains however, they are a new and very interesting concept. There has been a lot of thinking about how an actual merger between two networks might look like, but very few actual attempts to do one. We believe this is in a way a historical moment, since this will be (to the best of our knowledge) the first full-blown merger of two blockchain networks. All components of the Hermez project: technology, live solutions, team, and HEZ token will be integrated into the Polygon ecosystem. HEZ token holders will be able to swap their tokens for Polygon’s native token (MATIC) via the swapping contract that we will publish soon. The swap ratio is 3.5 MATIC : 1 HEZ, and is calculated based on the respective prices at 11AM CET August 4, 2021, as previously publicly announced by the Hermez team. MATIC will remain the only token of the Polygon ecosystem and it will take the role of HEZ in Polygon Hermez moving forward: it will provide security, rewards and potentially some additional utilities. HEZ token will cease to exist after a specific date yet to be defined. All other details of the merger will be announced and explained in the days and weeks to come. We are excited to design and observe the dynamics of the merger and the new frontiers it will open in terms of blockchain governance, token design, utility, value accrual etc.
There are many more things that can be said about this milestone event, but we will try to keep everything as succinct as possible and focus on the actual integration and afterwards on building and adoption. We believe that combining Polygon’s experience, adoption and treasury with Hermez’s technology and knowledge will bring great results.
Lastly, it is important to stress that although this is in itself a very big and important event, in the grand scheme of things, it is just our first major foray and investment into the ZK field. As stated in our recent thesis, we are strategically committing significant resources, including $1B from our treasury to ZK based solutions. We will continue investing and putting effort in growing our team and suite of solutions, with the goal of becoming the leading team in the ZK scaling sector and onboarding the first billion users to Ethereum.
We thank the whole Polygon and Ethereum community for all the support so far and we invite you to stay with us moving forward; this journey is about to get even more exciting.
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