Indian crypto startup Polygon said it is acquiring Hermez, a zero-knowledge (ZK) cryptography-based scaling project, in a deal that will cost the company $250 million. The company will pay the amount in MATIC tokens.
It is the first ever 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.
The merged entity will operate under the new name: Polygon Hermez. Polygon Hermez will become a part of the growing Polygon suite that already offers solutions such as Polygon PoS, Polygon SDK, Polygon Avail, etc, the company said.
“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. More details on this strategic decision can be found in our ZK thesis,” Polygon said.
After the merger, HEZ token holders will be able to swap their tokens for Polygon’s native token (MATIC) via the swapping contract that we will publish soon. The swap ratio is 3.5 MATIC into 1 HEZ, and is calculated based on the respective prices at 11AM CET August 4, 2021.
MATIC will remain the only token of the Polygon ecosystem and it will take the role of HEZ in Polygon Hermez moving forward.
Polygon said it is one of its first major forays in the ZK solutions. It is strategically committing significant resources, including $1 billion from our treasury to ZK based solutions.
Source: Economic Times