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.
CBW - External Analyst