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

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Layer-two protocol Polygon will probably be merging ZK-rollup venture Hermez Community into its ecosystem for $250 million price of MATIC tokens.

In a Friday announcement, Polygon mentioned Hermez would turn into part of the community’s suite of options underneath the identify Polygon Hermez. The 26 folks 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 trade 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 means a historic second since this will probably be (to one of the best of our data) 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 attention-grabbing idea.”

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

As a ZK-rollup, Hermez makes use of zero-knowledge proofs to confirm the correctness of a big batch of transactions. An outdoor ecosystem executes these transactions and generates proofs for them, that are then posted immediately on the Ethereum blockchain. The system is geared toward saving block house — an ordinary 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, Maintain Community and NuCypher introduced in March they may combine their information encryption and safety protocols into a brand new community referred to as Keanu. Although the initiatives mentioned they may type a decentralized autonomous group, the event will probably be pushed by two impartial groups somewhat than a full merger.