Polygon’s merger with Hermez is the first complete merger of one blockchain network into another.
Earlier this year, two Ethereum projects, Keep and NuCypher, announced a merger of their protocols into a decentralized autonomous organization (DAO) in a project nicknamed “Keanu,” but will keep their brands and companies separate. And Yearn Finance frequently announces mergers and partnerships, but it is unclear what is happening under the surface of those deals.
Polygon’s absorption of Hermez’s team and protocol is something different entirely.
Hermez is a zero-knowledge (ZK) rollup, which means that it uses mathematical proofs to verify and settle transactions. As Ethereum struggles with transaction bottlenecks, rollups have emerged as the preferred scaling strategy. And Hermez, which is the only decentralized rollup, is a user favorite.
The Polygon-Hermez merger is part of Polygon’s new strategic focus on ZK technology, also announced Friday. Polygon has made a $1 billion commitment to developing ZK-based systems, forming partnerships, hiring employees and acquiring ZK teams and projects like Hermez.
“We consider ZK cryptography the single most important strategic resource for blockchain scaling and infrastructure development, and we have a clear goal of becoming the leading force and contributor in this field for years to come,” Polygon co-founder Mihailo Bjelic told CoinDesk.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.