Polygon Acquires Ethereum Scaling Startup Mir for $400M
The Ethereum scaling network is undertaking another big-budget buy.
Ethereum layer 2 Polygon is continuing to expand its list of scaling technologies.
On Thursday, Polygon announced a $400 million acquisition of Mir, a project focusing on zero-knowledge proofs. The announcement was made at Polygon’s “zk day” virtual event by co-founders Mihailo Bjelic, Jaynti Kanani and Sandeep Nailwal.
According to a press release, Mir’s system generates recursive zero-knowledge proofs that “allow many Ethereum transactions to be verified with a single tiny proof.” This will purportedly make Mir one of the fastest and most efficient layer 2 options. Zero-knowledge proofs are a cryptography technology that allows for the verification of information, such as a transaction on the blockchain, without revealing the specific details of that information.
“The industry is still in an early phase when it comes to scaling and blockchain infrastructure in general,” said Bjelic in a statement. “One of the key missing components required to build highly scalable solutions has been performant recursive proof systems; they simply haven’t existed so far. This ends today.”
The purchase was executed with 250 million MATIC tokens at a price of $1.60; since the agreement MATIC has risen to $2.18.
Layer 2s are among the fastest-growing blockchain networks per the closely-watched total value locked (TVL) metric. A layer 2 is a second blockchain built on top of the layer 1 Ethereum platform to reduce transaction costs. Arbitrum, which uses Optimistic rollup scaling technology, recently cracked the top 10 in TVL at $2.23 billion.
The buy marks a trend for the rapidly expanding Polygon. In August, Polygon cut a $250 million check to merge with Hermez Network, another zero-knowledge scaling solution, using a token swap.
The buys aim to make Polygon a multipurpose scaling solution for Ethereum – a significant strategy shift from what used to be branded as an Ethereum competitor.
Polygon is also reportedly planning further acquisitions, targeting a gaming studio as well as non-fungible token (NFT) properties.
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