Polygon Acquires Layer 2 Blockchain Hermez for $250 Million

Polygon Acquires Layer 2 Blockchain Hermez for $250 Million

Hermez is a Layer 2 resolution primarily based on zk-rollups. The acquisition will see the first token merger in the history of crypto.

Key Takeaways

  • Polygon is spending $250 million to originate all HEZ tokens and rebrand the Hermez Layer 2 to Polygon Hermez.
  • Polygon Hermez will seemingly be a excellent Layer 2 Ethereum resolution, with low prices and low latency.
  • As section of the deal, HEZ holders will seemingly be in a position to alternate their HEZ tokens with MATIC tokens by technique of a migration contract.

Polygon is acquiring Hermez Network in the first merger and acquisition deal racy two projects with tokens.

Hermez To Become Polygon Hermez

Formerly is thought as Matic network, Polygon has recently obtained Hermez Network, a ZK-Rollups-primarily based Ethereum Layer 2 scaling resolution. The acquisition aspects the first token merger in crypto history, as Hermez’s HEZ will seemingly be built-in into Polygon’s MATIC token.

Polygon is an Ethereum like minded blockchain whose device has been to alleviate among the predominant net page visitors from Ethereum while reducing prices deal. This abolish possibility has introduced a vogue of attention to Polygon, with many DeFi projects migrating to Polygon. Yield farming, in total viewed as too dear on Ethereum attributable to high fuel prices, has also viewed a renaissance on the scaling resolution.

Hermez’s Layer 2 resolution is primarily based on zero-data rollups, in total abbreviated to ZK-Rollups. This expertise enables it to process transactions sooner and for fair about no prices while silent leveraging the foremost Ethereum chain’s safety. The merger will see the mission named “Polygon Hermez,” and Hermez’s 26 workers join Polygon.

Right here’s a historical event for crypto as on no account before had a mission obtained one other mission with a token and merged each and every. Any extra, MATIC will seemingly be dilapidated to pay for transactions on Hermez. HEZ holders will seemingly be in a position to alternate their tokens at a 3.5MATIC/1HEZ ratio.

Round 250 million MATIC tokens will compensate HEZ holders, representing around 12.5% of Polygon’s treasury. With Hermez, Polygon acquires what’s most conventionally regarded as as a Layer 2 resolution, one built on top of Ethereum as an different of in parallel delight in the Polygon Commit Chain, a proof-of-stake blockchain.

So right here is the play e book

1. Meme your self as L2

2. Realize that you can no longer impact L2

3. Meme extra for mcap

4. Uncover an L2

— Andre Cronje (@AndreCronjeTech) August 13, 2021

Critics comprise eminent that the acquisition can seem delight in Polygon shopping for themselves a excellent Layer 2 resolution as an different of building it themselves. On the many hand, Polygon has announced it is a ways doubling down on its ZK-centric technique by committing an additional $1 billion from its treasury to growing the expertise.

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