Polygon is moving past its Plasma solution. The leading Ethereum scaling solution announced on Aug 13 that it has acquired Hermez by allocating $250M in MATIC tokens. This acquisition will add to the Polygon full-stack Ethereum scaling strategy. This means that Polygon will employ multiple techniques to reduce tx confirmation times and tx fees. Hermez is an Ethereum Virtual Machine (EVM) compatible ZK-Rollup based decentralized solution and now the endeavor is called Polygon Hermez.
Polygon Hermez offers a 90% reduction in fees, secure fast withdrawals, and 133x improvement in throughput, according to the official sources. This is the first-ever blockchain merge and acquisition in which two companies have completely dissolved into each other, combining their assets, team, and technology. As such, it speaks to the rapid maturity of blockchain technologies and the combined efforts to make crypto affordable for the masses.
The merger will see the Hermez token holders receive 3.5 MATIC for every single HEZ token that they hold. However, the token swap isn’t available yet. MATIC will be the primary token of the Polygon Hermez network. The Polygon team confirmed that they will be allocating $1B for the efforts to deploy zero-knowledge (ZKs) proof-based scaling technology research, acquisition, and further development.
Polygon’s highly successful yet controversial Plasma relying on Proof of Stake (POS) based on the fraud-proof solution is the most widely adopted and known scaling solution on the Ethereum blockchain. However, it has been criticized for its security model and certain centralized characteristics. The merger is likely to rectify the shortcomings of the stopgap Plasma solution.
About MATIC Token
MATIC is the native token of Polygon. It is an ERC-20 token operating on the Ethereum blockchain. Users will pay in MATIC tokens to settle the transaction fees on Polygon. MATIC tokens will set out every month. MATIC currently has a circulating supply of 5,188,388,130 MATIC coins and a max supply of 10,000,000,000 MATIC tokens. The outstanding MATIC tokens are as follows: