POLYGON MATIC-HERMEZ MERGER

Polygon or the Matic network which is an Indian Crypto startup announced a merger with Hermez Network. Polygon is an Ethereum-Side Chain scaling solution. It has a lower charge structure and faster confirmation timeframes. On the other hand, Hermez is a decentralized Zero Knowledge -rollup focused on scaling payments and token transfers on the Ethereum network to drastically reduce transaction costs while also promoting community initiatives via its proof-of-donation mechanism. This arrangement will cost $250 million and polygon has decided to pay the amount through MATIC coins. The digital tokens will be merged and the Hermez offerings will now operate under the name of ‘Polygon Hermez’. “This is the first full blown merger of two blockchain networks” said Mihailo Bjelica (co-founder of Polygon). All aspects of the Hermez project will be integrated into the Polygon ecosystem, including the technology, live solutions, HEZ coin along with their 26 team members.

Hermez will now become a part of Polygon PoS, Polygon SDK and Polygon Avail. The Hermez Holders will be allowed to swap their coins in the ratio of 3.5 MATIC: 1 HEZ. Matic will be the only token of Polygon and it will take the role of HEZ. Hermez will cease to exist after a specified date.

WHY MERGER?

Hermez uses zero knowledge based technology to verify the correctness of the transactions which are executed and their validity proofs are then posted to the Ethereum blockchain. This process saves the block space and it enables low-cost token/ coin transfers. Polygon has shown its interest to develop Zero Knowledge based scaling solution in order to improve its approach to aggregate transactions into blockchain, and since Hermez is already working on the Zero Knowledge Project, Polygon came up with the proposal of merger .This project will ensure that the transactions are securely processed off-chain and with this the scalability can be increased. Polygon has also committed $1 billion to the Zero Knowledge Project, which focuses on :

• Acquiring world-class Zero Knowledge projects and teams, as well as designing and developing Zero Knowledge-based solutions

• Recruiting top-tier talent;

• Collaborating with appropriate teams and initiatives;

• Implementation of ZK solutions

This is a historic event in the world of crypto since never before a project has been acquired by another project with the token. The subsequent result of this consolidation is extremely encouraging, as both projects are very positive on their own.

Thank you.

Regards,

Shreya Bangera (Section L),

Kautilya,

IBS Mumbai.