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Polygon Protocol merges with Hermez Network

Photo of: Joseph Stone
by Joseph Stone

Polygon, the issuer of the native MATIC token, is on a roll. Blockchain services and applications need scalability to respond to the growth of uses, especially on the popular Ethereum network.

Polygon’s Layer-2 solution directly addresses this issue. Its technology is used by leading DeFi players such as Aave and exchanges such as Coinbase. And the company is determined to ride the wave and fuel its growth.

Polygon Protocol (formerly Matic Network) has acquired Hermez Network (HEZ) for nearly $250 million. The two projects are also merging their native tokens, MATIC and HEZ, in the first fully completed blockchain network merger deal.

In an Aug. 13 tweet, Polygon created the buzz when it said it was joining forces with Hermez. A second-layer solution, Hermez is a protocol known for its involvement in zero-knowledge disclosure proof contracts, also known as ZKP for “Zero-Knowledge Proofs.”

A press release issued the same day reveals Polygon’s ambitions. The Ethereum scaling project wants to spend $1 billion, a significant portion of its cash flow, on ZKP research.

The 26 people who make up Hermez are joining Polygon’s technology team. They will contribute to its developments. In particular, they will continue their work on a solution compatible with the Ethereum virtual machine.

As for the holders of the Hermez HEZ token, they will be able to exchange them for MATIC tokens. The conversion rate is official, it will be 3.5 HEZ for 1 MATIC. With its strong growth of more than 40% over 7 days and more than 8% over 24 hours, this offer of MATIC is very attractive.

The Polygon token was trading at $1.53 on August 16 at 9 am. Admittedly, it is still far from its ATH of $2.45 on May 18, however, its momentum is strong. Since July 20, the price of MATIC has increased by more than 100%.

On that date, the token was trading at around $0.69. The price has been in uninterrupted growth since then, solidly maintaining its place among the Top 20 cryptocurrencies. The acquisition of MATIC by investors is an opportunity in the midst of a market rebound.

HEZ holders can benefit from it. Eventually, this conversion may even become essential. Polygon points out that the token may be made to disappear. When will this happen? This deadline is still to be defined.