Polygon acquires Hermez for $250 million making it the first blockchain network merger


Formerly known as Matic Network,
Ethereum scaling project Polygon has announced on 13th August, its
partnership worth $250 million with Hermez Network, a ZK (zero-knowledge)
rollups based Ethereum scaling solution.
As part of the partnership, two native
tokens MATIC and HEZ, along with the two blockchain platforms will be fully
merged with a new name “Polygon Hermez”. Hermez’s 26 members of staffs will
also join the growing Polygon’s team of 80 that already provides solutions like
Polygon PoS, Polygon SDK, Polygon Avail etc.
“We believe this is in a way a
historical moment, since this will be the first full-blown merger of two
blockchain networks. All components of the Hermez project: technology, live
solutions, team, and HEZ token will be integrated into the Polygon ecosystem,”
said Polygon is Friday’s statement.
After the first- ever token merger,
Hermez’s token holders will be able to swap their HEZ tokens for Polygon’s
native token MATIC through a swapping contract, that they are yet to publish. The
HEZ token will cease to exit after the upcoming announcement. As earlier
announced by the Hermez Team, the swap ratio is 3.5 MATIC into 1 HEZ, and
calculated based on the respective prices at 11 AM CET August 4, 2021.
Polygon mentioned in a blog on Medium
that it is one of its first major forays in the ZK solutions. It’s
strategically committing significant resources, including $1 billion to ZK
based solutions.
Now a days, the demand for two layer
scaling solutions has been attracting capital inflows, which is, in turn, has
been fuelling the rise in the native cryptocurrency of Polygon, the Indian
crypto start-up.
MATIC is among the topmost 20
cryptocurrencies with a market capitalization of over $9.5 billion. Till Friday
night, the token was trading around 13% higher at $1.51, which is 42% lower
compared to its all-time of $2.62 that it had hit on 18th May, 2021.

Joyashree Dey
CBW - External Analyst
INDIA