Polygon Hermez

Polygon Hermez is a Layer 2 scaling solution that operates as a ZK-Rollup, a technology that bundles (or "rolls up") hundreds of transactions into a single cryptographic proof. This proof, known as a Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK), is then posted to the Ethereum mainnet. This architecture allows Hermez to inherit Ethereum's security while dramatically increasing transaction throughput and reducing gas fees, as only the compact proof needs to be verified on-chain, not every individual transaction.

The network is specifically optimized for secure and efficient token transfers and scalable smart contract execution. It utilizes a novel proof-of-efficiency consensus mechanism where a decentralized network of coordinators, who must stake HEZ tokens, are selected to create batches of transactions and generate the validity proofs. This design ensures the system remains decentralized and trustless. A key feature is its Ethereum Virtual Machine (EVM) compatibility, allowing developers to deploy existing smart contracts with minimal modifications, facilitating easy migration of dApps from Ethereum.

Originally an independent project called Hermez Network, it was acquired by Polygon (now Polygon Labs) in 2021 and rebranded as Polygon Hermez. It represents a core component of the broader Polygon 2.0 vision, which aims to build a network of interconnected ZK-based Layer 2 chains. Its native utility token, HEZ, is used for staking by coordinators, paying network fees, and participating in governance, aligning economic incentives with the network's security and operational integrity.

The name Polygon Hermez originates from the 2021 acquisition and integration of the Hermez Network into the Polygon ecosystem (now Polygon Labs). Hermez, itself named after the Spanish town famous for the prehistoric Cave of El Castillo, was a leading ZK-Rollup project focused on scaling payments and transfers. Its merger with Polygon marked a strategic shift for Polygon from its initial Plasma-based Matic Network roots towards a zero-knowledge proof-centric future, rebranding the solution as Polygon Hermez.

This renaming followed Polygon's broader rebranding from Matic Network, positioning itself as a multi-chain scaling platform or "Internet of Blockchains." The Hermez acquisition was a key pillar in building this vision, specifically for scaling Ethereum with ZK technology. The project was later rebranded again to Polygon zkEVM, reflecting its evolution from a payment-specific rollup to a general-purpose, EVM-compatible zero-knowledge Layer 2. The 'Hermez' name persists in the underlying technology, such as the Hermez zkEVM protocol and the HEZ token symbol.

The etymology underscores a central theme in blockchain scaling: consolidation and technological convergence. It traces the journey from a standalone ZK-rollup (Hermez) to its absorption by a larger scaling suite (Polygon), ultimately evolving into a flagship product (Polygon zkEVM). This lineage highlights the competitive race for Ethereum scalability, where ZK-Rollups like Hermez emerged as a superior technical alternative to earlier Optimistic Rollups and sidechains, leading to their strategic acquisition by major ecosystems.

At its core, Polygon Hermez operates as a ZK-Rollup, a Layer 2 scaling solution. It processes thousands of transactions off-chain in a specialized execution environment called a Sequencer. These transactions are then aggregated into a single cryptographic proof, known as a Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK), which is submitted to the Ethereum mainnet. This proof verifies the validity of all batched transactions without revealing their individual details, ensuring data availability and security inherited from Ethereum.

The network's architecture is built around two main roles: Sequencers and Coordinators. A Sequencer is responsible for collecting user transactions, ordering them into a batch, generating the execution trace, and creating the validity proof. The system uses a decentralized auction, run by smart contracts on Ethereum, where participants bid in HEZ tokens (the network's native token) for the right to become the Coordinator. The winning Coordinator selects a Sequencer's batch, validates the zk-SNARK proof, and posts it to Ethereum, finalizing the state update.

For users, interacting with Polygon Hermez involves token bridging. To deposit funds, users lock assets like ETH or ERC-20 tokens in a smart contract on Ethereum Layer 1, which are then minted as equivalent tokens on the Hermez Layer 2 network. All transactions—transfers, swaps, and exits—occur on Layer 2, where fees are paid in HEZ. To withdraw funds back to Ethereum, users initiate an exit transaction, which undergoes a challenge period before the assets are released from the L1 smart contract, ensuring security against fraudulent proofs.

A key innovation of Polygon Hermez is its use of zkEVM (Zero-Knowledge Ethereum Virtual Machine) compatibility. This means the rollup's virtual machine is designed to be fully compatible with the Ethereum EVM opcode set, allowing it to execute smart contracts in a ZK-friendly environment. This moves the platform beyond simple payments toward becoming a general-purpose ZK-Rollup, capable of scaling decentralized applications (dApps) with lower fees and faster finality while maintaining Ethereum-level security.

The economic model is secured by the HEZ token, which is used for staking in the coordinator auction, paying transaction fees, and participating in governance. The decentralized auction mechanism for Coordinators ensures censorship resistance and prevents centralized control over transaction ordering. This design makes Polygon Hermez a permissionless and decentralized ZK-Rollup, aligning with Ethereum's core values while providing massive scalability improvements for on-chain activity.