Polygon acquires Hermez Community for $250M, will merge native tokens

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Layer-two protocol Polygon can be merging ZK-rollup mission Hermez Community into its ecosystem for $250 million value of MATIC tokens.

In a Friday announcement, Polygon mentioned Hermez would develop into part of the community’s suite of options underneath the title Polygon Hermez. The 26 individuals within the Hermez workforce in addition to its tech and options — together with work on an Ethereum Digital Machine-compatible answer — will be part of the platform.

As a part of the merger, holders of Hermez’s native HEZ will be capable to alternate the tokens at a fee of three.5:1 to Polygon’s MATIC tokens. Polygon mentioned HEZ tokens would finally be phased out at an unspecified date.

“We consider that is in a method a historic second since this can be (to the perfect of our information) the primary full-blown merger of two blockchain networks,” mentioned Polygon. “[Mergers and acquisitions] within the conventional tech world are an on a regular basis factor. In blockchains, nonetheless, they’re a brand new and really fascinating idea.”

The merger with Hermez is a part of Polygon’s enlargement into zero-knowledge, or ZK, proofs. The mission has dedicated $1 billion to ZK-based options and plans to proceed to kind partnerships to develop its suite of options.

As a ZK-rollup, Hermez makes use of zero-knowledge proofs to confirm the correctness of a giant batch of transactions. An outdoor ecosystem executes these transactions and generates proofs for them, that are then posted straight on the Ethereum blockchain. The system is aimed toward saving block area — a normal switch of Ether (ETH) may take simply 100 bytes on the chain, whereas a transaction with Hermez would solely be 10 bytes.

Associated: Tether launches on Hermez rollup as Ethereum begins falling behind

Although the businesses will stay separate entities, Hold Community and NuCypher introduced in March they’ll combine their information encryption and safety protocols into a brand new community known as Keanu. Although the tasks mentioned they’ll kind a decentralized autonomous group, the event can be pushed by two unbiased groups relatively than a full merger.