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Explaining Polygon Hermez

2 years ago   •   4 min read

By Polygon Hermez

It’s been such a busy couple of weeks since the merger announcement!

We’ve received thousands of messages of support on social media, and we’ve experienced a massive growth of our community.

The reception from the Hermez, Polygon and Ethereum communities has been great, widely praising the merger as positive for the ecosystem. We’re working tirelessly to speed up the merger process, both on the technical and the community sides.

In this article, you’ll find all the details regarding the Polygon Hermez token acquisition and the future plans of rebranding and merging the networks.

We’ll also address some of the main questions and concerns from the community. Let’s jump right in!

Clarifying Community Questions

Polygon Hermez is a decentralized zkRollup on top of Ethereum. Nothing changes here: we are a Layer 2 solution that inherits its security from Ethereum Layer 1.

Regarding token economics, the HEZ token will cease to be the utility token of the zkRollup after a specific date which is yet to be defined. MATIC will become the utility token of Polygon Hermez.

Some users have expressed their concerns about the financial implications of the merger. While we acknowledge these concerns, we want to remind our community that the HEZ token has always been a utility token, not a speculative or governance token. Its function, as depicted in the original whitepaper, was exclusively for coordinators to bid for winning the right to process transactions. This function will be now performed using Polygon’s native MATIC token.

Other community members have raised concerns about decentralization, as they were attracted originally to the Hermez project due to its ethos of decentralization.

Our name has now changed to Polygon Hermez, but our ethos remains the same: we’re building a decentralized zkRollup to scale Ethereum. With Polygon’s resources and expertise behind the project, we’ll be able to achieve our goals much sooner than before.

Explaining the Polygon Hermez Token Acquisition

Polygon has allocated 250 million MATIC tokens to develop Polygon Hermez. Out of 250mn tokens, 90mn are allocated to investors and the remaining 160mn are allocated to initial team supporters and developers.

The 90mn tokens will be mainly used to swap the HEZ unvested tokens as well as 5mn publicly traded HEZ tokens.

The vested HEZ from the stakeholders cannot be swapped. Instead, they will maintain the vesting already explained in the original Hermez whitepaper, continuing with the previous vesting periods of 2 and 3 years.

More importantly, Hermez stakeholders have committed to contributing to the initiative's success. Once unvested and unlocked, these HEZ tokens will be swapped in a smart contract for the MATIC tokens, as explained below.

The rest of the MATIC budget is conditional on the delivery of several milestones aligned with Polygon’s strategy, with the main objective of delivering the zkEVM and its further adoption.

Smart Contract Token Swap

A smart contract to allow the HEZ-to-MATIC token swap is being finalized at the time of writing, but there is no final date set in stone right now for its release. We’re currently testing it on the Rinkeby network.

However, the ratio was established on the 4th of August at 11:00 CEST according to the USD value of both tokens on Bitfinex. The peg between HEZ and MATIC will be as follows: 1 HEZ = 3.5 MATIC.

There are incentives for arbitrageurs to keep the peg, so it shouldn’t make any difference for token holders. Holders can trade their tokens in several exchanges already if they wish to do so.

Once the smart contract is released, HEZ holders on centralized exchanges should send their HEZ to a Metamask wallet and then to the token swap smart contract, obtaining MATIC in return. We will provide detailed information regarding the token swap process in the coming days. Please, bear in mind that, as with any transaction on top of Ethereum, the swapping will incur in gas fees.

HEZ tokens sent to the swap contract will be burnt. This smart contract will be live for at least for 3 years, although will likely remain for a longer time.

Polygon Hermez Rebranding

After the merger was announced, we proceeded to update our social media profiles and community channels to reflect our new identity as Polygon Hermez.

This process will take some time, and will imply updating our website, blog, documentation, GitHub repositories, and ultimately a complete rebranding of Polygon Hermez.

In case you’re wondering, here are the links to our updated social channels:

We’re updating thousands of links on our blog and documentation, if you find any broken links, please let us know on Discord.

In the next couple of weeks, we’ll release a blog post introducing the Polygon Hermez team to the world, stay tuned for more updates!

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