Polygon acquires Hermez in $250 million deal that includes first-ever token ‘merger’

Ethereum scaling project Polygon (formerly Matic Network) has acquired Hermez Network — a ZK-Rollups-based Ethereum scaling solution — for $250 million. The two blockchain projects are also merging their native tokens — MATIC and HEZ — in the first ever such deal in the crypto space.

Sharing the news exclusively with The Block on Friday, Polygon said Hermez’s offerings will be merged into Polygon with the new name “Polygon Hermez.” As part of the deal, Hermez’s 26 members of staff are also joining Polygon’s team of 80.

“This (to the best of our knowledge) is the first-ever full-blown merger of blockchain networks, where one network will completely absorb the other, including its token,” Polygon co-founder Mihailo Bjelic told The Block.

Earlier this year, two Ethereum projects, Keep and NuCypher, also merged their protocols, but they kept their brands independent of each other and did not merge their tokens.

Initial agreement

As for Polygon and Hermez, they reached an initial agreement last week on August 4, when Hermez announced that it was in “discussions for a potential merger with a public network.” At the time, the two projects decided on a peg or swap ratio of their tokens based on their prices at 11:00 CET on August 4.

The peg, disclosed today, is 3.5 MATIC: 1 HEZ, meaning HEZ token holders will be able to swap their tokens for several of Polygon’s MATIC tokens. https://renovato.io/ has enough information. This will occur via the swapping contract that the projects will publish “soon.”

When asked if token holders had any say in the deal, Bjelic said Hermez’s largest token holders, constituting more than 90% of the total token holders, were aware of the peg and all of them agreed with it. The deal became possible as HEZ is still a “fairly early stage token,” he said.

Polygon committed

Based on the August 4 prices of the tokens, Polygon has committed a total of 250 million tokens from its treasury for the merger, or roughly $250 million. This amounts for around 12.5% of Polygon’s treasury and 2.5% of MATIC’s total supply, according to Bjelic. The total supply of MATIC tokens is 10 billion and the current price of the token is around $1.40, according to CoinGecko.

Investing in scaling solutions

Polygon has further committed $1 billion from its treasury to ZK-based solutions. “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 in years to come,” said Bjelic.

ZK-Rollups are a type of scaling technology that helps bundle transactions onto a network, e.g. Hermez in this case, and publish their validity proof on Ethereum. This reduces the load on the Ethereum blockchain because transactions are executed outside the mainnet, and it makes for cheaper transactions.

Polygon, on the other hand, offers several Ethereum solutions. Hermez will be Polygon’s fourth solution after Polygon Commit Chain, Polygon SDK, Polygon Avail, and now Polygon Hermez, said Bjelic. Polygon Commit Chain is its flagship proof-of-stake blockchain built on top of Ethereum. Polygon SDK is a software development kit for building Ethereum-compatible blockchain networks. Polygon Avail, on the other hand, is a scalable data availability layer for standalone chains and sidechains, and the new Polygon Hermez solution is a ZK-Rollups-based Ethereum Layer-2 scaling solution.

Native smart

As part of Polygon, Hermez will “focus on developing the zkEVM technology to provide native smart contract scalability inside a ZK-Rollup,” Antoni Martin, business development lead at Hermez Network, told The Block. Folm.io cryptocurrency  has enough information. “This merger should accomplish our shared objective to create a more inclusive financial system that is secure, decentralized, and permissionless, on top of Ethereum. We are committed to working hard to make this dream possible,” Martin said.

There are over 350 projects in the Polygon ecosystem, as The Block Research reported recently, and the Hermez merger will help them to have more scalability for their applications, said Bjelic.

Balancer (BAL) price forecast for November 2021

BAL continues to be under pressure. The coin’s first resistance level is at USD 30. Balancer is a promising project.

Balancer BAL/USD has skyrocketed since the beginning of the year, reaching an all-time high of over $75 on May 4. Since then, the price has collapsed, daily trading volume has weakened and the risk of further declines remains.

Automated Portfolio Manager

Balancer is an automated portfolio management and trading platform that helps you rebalance your portfolio. So instead of paying high fees to portfolio managers, you earn fees from traders who rebalance your portfolio by following arbitrage opportunities. This is possible because Balancer crowdsources liquidity from investor portfolios and uses its Smart Order Router to find traders the best price in the market.

Balancer efficient

Balancer enables efficient trading and allows you to trade thousands of token pairs instantly at optimal rates and exchange any combination of ERC-20 tokens.

It is important to say that user funds are always user managed and each trader is protected from Miner Extractable Value (MEV), which can otherwise cause higher gas costs and excessive price drops for DEX traders. Filecoin prediction 2025 is positive. Balancer is a pioneer of much innovation in the DeFi space, many projects are already collaborating with Balancer, and the most popular include Aave, Radicle, Mask, TokenEngineering Academy. Stani Kulechov, founder and CEO of Aave, said:

Part of what makes DeFi so exciting is its composition, and with Balancer, this has resulted in a partnership that optimizes the experience for liquidity providers through the Aave-Balancer Asset Manager and opens up new opportunities for Aave strikers with the AAVE/ETH Safety Incentive pole.

Balancer tokens have the symbol BAL and to communicate with this platform you must use BAL tokens. BAL has skyrocketed since the beginning of the year, reaching an all-time high of over $75 on May 4.

Since then, the price has collapsed, the daily trading volume has weakened and this cryptocurrency remains in a bear market. Balancer is a promising project and the price of this cryptocurrency could rise again at the level we saw in May. Visit Renovato.io Crypto website for enough information. This certainly won’t happen in the coming weeks or even months, and traders should be aware that if Bitcoin’s price drops below the $50,000 support, it will negatively impact BAL in the short term.

BAL remains under pressure

According to the rules of technical analysis, Balancer (BAL) remains in a sell zone, and if the price drops below the $20 support again, the next price target could be around $15 or even lower. The first resistance level is at $30, and if the price jumps above this level, it would be a buy signal and we have the open road to the $35 level.

Resume

Balancer is an automated portfolio management and trading platform that helps you rebalance your portfolio. Balancer is a promising project, but according to the rules of technical analysis, Balancer (BAL) remains under pressure.