Recently, Indian crypto startup Polygon announced that it is acquiring Hermez in a 250 million MATIC deal.
A "layer 2" platform on the Ethereum blockchain, Polygon said that Hermez will be absorbed into its ecosystem under the name Polygon Hermez, where it will become a part of the growing Polygon suite that already offers solutions like Polygon PoS, Polygon SDK, Polygon Avail, etc.
According to Polygon, the maximum price that will be committed for this acquistion from the Polygon treasury is 250M $MATIC tokens, which is roughly $250M - based on the price at the time of reaching the agreement i.e August 4, 2021.
Source: Polygon
Well, Polygon’s merger with Hermez has marked the first full-blown merger of one blockchain network into another. The complete Hermez project its employees, technology and native HEZ token will be integrated into Polygon’s ecoystem.
"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." said, Polygon.
" As stated in our recent thesis, we are strategically committing significant resources, including $1B from our treasury to ZK based solutions." said Polygon
It is worth noting that Hermez is a zero-knowledge (ZK) rollup, meaning that it makes use of mathematical proofs to verify and settle transactions. Since Ethereum struggles with transaction bottlenecks, rollups have come out as the preferred scaling strategy. Moreover Hermez being the only decentralized rollup, is becoming a user favorite.
"When we decided to focus on ZK solutions we had EVM 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." - another reason of merger cited by Polygon.