Polygon, a crypto business, has announced the acquisition of Hermez, a zero-knowledge (ZK) cryptography-based scaling project, for $250 million. The payment will be made in MATIC tokens.
This is the first time two blockchain networks have merged completely. All aspects of the Hermez project, which include technology, live solutions, team and HEZ token will be integrated into the Polygon ecosystem, to form the new company.
Polygon Hermez will be the new name of the united company. Polygon Hermez will join the burgeoning Polygon portfolio, which already includes products such as Polygon PoS, Polygon SDK, Polygon Avail, and others, according to the business.
“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.
HEZ token holders will be able to swap their tokens for one of polygon’s first tokens(MATIC). This will be made possible after the merger through a swapping formula that will be created to enable traders to be able to exchange tokens in an easier way.
The agreement on the method of transaction is yet to be published. The company said the contract will be published soon to get traders on board on how tokens will be exchanged.
The swap ratio of the tokens is 3.5 MATIC into 1 HEZ , arrived at according to considerations of the prices of the tokens respectively as at 4th August of 2021.
The merger between Polygon and Hermez will still hold MATIC as its main token. MATIC will take the role of HEZ, the main token for Hermez as they proceed.
Polygon put out a statement saying it is one of the major forays in the ZK solutions. They further added that they are planning on their investments which include $1 billion from their finance department into the ZK based solutions.