Enjoying Coinranking ad-free? Enjoying Coinranking ad-free? Get the complete experience with Elite. No ads · Full Pro Chart · Premium features No ads · Pro Chart · More

What is Hermez Network Token (HEZ)?

Quick Facts

  • Token symbol: HEZ
  • Blockchain: Ethereum (ERC-20)
  • Core technology: zk-rollup (zero-knowledge proofs)
  • Primary use case: Scaling payments and token transfers on Ethereum
  • Consensus model: Proof-of-Donation burn auction
  • Developed by: The Iden3 team
  • Acquired by Polygon in 2021, forming Polygon Hermez

Introduction

Hermez Network is a decentralized zk-rollup built on top of Ethereum. Its goal is straightforward: make token transfers and payments faster and dramatically cheaper, without sacrificing Ethereum's security.

The native token, HEZ, is the fuel behind the network's consensus and incentive system.

History & Background

Hermez was created by the team behind Iden3, a project focused on decentralized identity and zero-knowledge cryptography. It launched in 2020 and quickly became one of the notable Ethereum Layer-2 scaling projects of its era.

In 2021, Polygon acquired Hermez Network in a deal valued at approximately $250 million, creating what became known as Polygon Hermez. The acquisition integrated Hermez's zk-rollup technology into Polygon's broader suite of zero-knowledge scaling solutions. HEZ holders were offered the ability to swap their tokens to MATIC following the merger.

How Hermez Network Token Works

Hermez uses zk-SNARK proofs to bundle thousands of individual transactions into a single batch. This batch is then submitted to and validated on the Ethereum mainnet.

The key steps are:

  • Transactions are aggregated and compressed off-chain
  • A zk-SNARK proof verifies the entire batch
  • The proof is posted on-chain to Ethereum for final settlement

All user funds remain secured in smart contracts on Ethereum, keeping the system trustless and permissionless.

Tokenomics

HEZ is an ERC-20 utility token central to the network's operation. Its primary economic role is within the coordinator auction system, where network participants called coordinators bid HEZ tokens to win the right to create the next batch of transactions.

A defining feature is the Proof-of-Donation mechanism. In each auction, 40% of the winning bid is redirected to Ethereum public goods funding via Gitcoin quadratic grants, aligning the network's incentives with the broader Ethereum ecosystem.

Circulating Supply ? 4.70 million HEZ
Total supply ? 100.00 million HEZ
Max supply ? -- HEZ
Fixed supply (updated manually)

Ecosystem & Use Cases

  • Low-cost payments: Bundling transactions reduces fees significantly for end users.
  • Token transfers: Fast, affordable ERC-20 transfers between wallets.
  • Coordinator staking: HEZ holders can participate in the network's auction mechanism.
  • Governance: HEZ holders can participate in protocol decisions and upgrades.

Team, Governance & Community

Hermez was originally built by the Iden3 team, known for their expertise in zero-knowledge cryptography. Following the Polygon acquisition, governance and development moved under the Polygon Labs framework. The community engages via Telegram and other social channels.

Advantages

  • Significant fee reduction by batching thousands of transactions into one proof
  • Ethereum-level security maintained through on-chain settlement
  • Proof-of-Donation model contributes to broader Ethereum public goods
  • Zero-knowledge proofs provide strong cryptographic guarantees
  • Permissionless and censorship-resistant by design

Risks & Challenges

  • Post-merger uncertainty: The HEZ token's role evolved significantly after the Polygon acquisition
  • Low activity: Trading volume and network usage have remained modest
  • Competition: Numerous other Layer-2 and zk-rollup solutions compete in the same space
  • Technology complexity: zk-proof systems are technically demanding to maintain and upgrade

Long-Term Vision

Hermez was conceived as a solution to Ethereum's scalability bottlenecks, with a particular focus on payments and financial inclusion. Through its integration into the Polygon ecosystem, the technology underpinning Hermez continues to influence the development of zero-knowledge scaling solutions. The Proof-of-Donation model also reflected a broader vision of aligning Layer-2 growth with the health of the Ethereum commons.

Frequently Asked Questions

HEZ is the native ERC-20 utility token of the Hermez Network, a decentralized zk-rollup built on Ethereum designed to enable fast, low-cost payments and token transfers. It is used in the network's coordinator auction system and governance.

Hermez bundles thousands of transactions off-chain into a single batch and generates a zk-SNARK proof verifying all of them. This compressed proof is then posted to Ethereum for on-chain settlement, dramatically reducing fees.

Proof-of-Donation is Hermez's consensus model where coordinators bid HEZ tokens to create transaction batches. Forty percent of each winning bid is donated to Ethereum public goods projects via Gitcoin quadratic funding grants.

Polygon acquired Hermez in 2021 for approximately $250 million, forming Polygon Hermez. HEZ holders were offered a swap of their tokens to MATIC, and Hermez's zk-rollup technology was integrated into Polygon's scaling roadmap.

Hermez was developed by the team behind Iden3, a project specializing in decentralized identity and zero-knowledge cryptography. After the Polygon acquisition, development continued under the Polygon Labs umbrella.

Coordinators are network participants who compete in a burn auction by bidding HEZ tokens for the right to process and batch the next set of transactions. They play a central role in the network's throughput and operation.

HEZ remains available on decentralized exchanges such as Uniswap, though trading volume is limited following the Polygon merger. Its primary utility within the original Hermez protocol has diminished as the ecosystem shifted toward MATIC.

Hermez was specifically optimized for payments and token transfers rather than general smart contract execution. Its Proof-of-Donation model, which funds Ethereum public goods from auction proceeds, was a unique differentiator in the Layer-2 landscape.