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Polygon Acquires Hermez Network

Polygon Acquires Hermez Network

Last updated 30th Nov 2022

Ethereum scaling project Polygon (formerly Matic Network) has acquired Hermez Network — a ZK-Rollups-based Ethereum scaling solution — for $250 million. The two projects are also merging their native tokens, MATIC and HEZ, in the first ever such deal in the crypto space.

Starting Aug. 13, the process of merging Hermez into the Polygon ecosystem was started, 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, and Polygon Avail. The maximum amount that will be committed for this merger from the Polygon treasury is 250 million $MATIC tokens, or roughly $250 million based on the price at the time of reaching the agreement (Aug. 4).

This merger is the first big foray into the ZK scaling field, after ZK-based solutions were publicly announced as Hermez’s strategic focus moving forward.

This merger will be the first full-blown merger of one blockchain network into another. In blockchains 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.

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 will be published soon. The swap ratio is 3.5 MATIC : 1 HEZ, and is calculated based on the respective prices at 11 a.m. CET Aug. 4. 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 to be announced. All other details of the merger will be announced and explained in the days and weeks to come.

“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”, said Sandeep Nailwal, cofounder at Polygon.

Staff Writer

Staff Writer