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Last August, Polygon announced it had acquired rollup platform Hermez in the first-ever full-blown merger of blockchain networks with complete absorption of one network into the other’s ecosystem. The Hermez network ceased running as an independent firm and was ‘assimilated’ as a product under Polygon. Polygon named the new product Polygon Hermez, swapped the native token on the Hermez network (3.5 MATIC: 1 HEZ) and took in the Hermez team.
Part of what made the acquisition attractive to Polygon was Hermez’s foray into zero-knowledge (ZK) technology and ambition to build a ZK Ethereum Compatible Machine. The merger marked the beginning of a billion-dollar commitment and strategic focus on this technology. Less than a year later, the layer 2 Ethereum scaling solution is looking to release Hermez 2.0.
Here’s everything you need to know about it:
A ZK implementation of the EVM
Polygon is planning to ‘improve’ on Hermez 1.0, which has been running since March last year, with the introduction of Polygon Hermez 2.0. The newer version will address (and overcome) the demerits of the past with a permissionless, decentralized, secure design as an l2 solution.
Hermez was, during its creation, originally structured on ZK-rollup infrastructure that enabled it to scale transactions on the Ethereum mainnet to the magnitude of 2,000 tps. It achieved its role, having massively boosted transaction processing on the blockchain. However, the need to establish a smooth co-existence between decentralized applications and their users has necessitated the development of Hermez 2.0. Notably, the latter will introduce one stark improvement – smart contract support.
Challenges with Hermez 1.0
Polygon Hermez 1.0 was built on the Proof of Donation (PoD) consensus algorithm, which meant its share of challenges. The PoD model has proven expensive for coordinators and validators, not to mention its rewarding model, which is unbalanced. The winner-takes-all mechanism breeds unfair competition causing centralized validation of batches by only a few sets of operators.
Also, the PoD model has a complex auction protocol that could mean vulnerability to attacks. Due to the permissionless nature of the network, any member can control it, which could mean significant delays in case of malicious activity.
Against these challenges, Polygon is developing Hermez 2.0. It will introduce the Proof of Efficiency (PoE) consensus. Sequencers would be used to add transaction batches to the PoE smart contract, and aggregators would check for the validity of the transactions.
In addition, PoE consensus would enable permissionless production of batches, accommodate decentralization to a certain degree, and protect the network against malicious acts, especially from validators.
Hermez 2.0 would also integrate measures to ensure strategies to guarantee efficiency are implemented. The most efficient aggregators would be incentivized to participate in proof generation, with all computations kept off-chain, while essential data and ZK-proofs are retained online.
Outlier Ventures partners with Polygon for the launch of Base Camp v2.0
Elsewhere, Web3 and metaverse-focused platform Outlier Ventures has settled on Polygon for the launch of a new edition of the Base Camp accelerator program. Following the remarkable success of the first version, Outlier Ventures is back to facilitate funding, scaling, and growth of Web3 startup projects.
Transition and linkage
This year’s accelerator program will focus on the transition from Web2 to Web3, with a keen eye on user experience, NFT projects that define utility for users, interoperable gaming platforms, multi-chain DeFi protocols, MetaFi, and cross-chain solutions.
A start date of June 19 has been set. The program is expected to jumpstart projects by helping them fine-tune their business strategies, enabling community growth, and enhancing their products for their target markets. It is also keen to fill the gap between traditional finance and decentralized finance. Base Camp 2.0 will also promote wallet solutions, on-ramp & off-ramp tools, and identity/ privacy innovations.
Successful applicants will be eligible to cop an initial $125,000 investment, followed by a further $250,000 if it proves necessary. They will also gain exposure to over 30 mentors, part of a global network of founders, investors, and Web3 developers that will accord them an opportunity to gain investment from a member of the Outlier Ventures network.
To learn more about Polygon visit our Investing in Polygon guide.
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Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.