Hermez Value Proposition
Hermez network project has some properties that will provide value to the users and the community:
Production Ready Solution
Hermez will launch in mainnet a project which is intended to be a usable token transfers network from day one. This product will have support, maintenance, and technological evolution to provide users with the most updated functionalities with the right risk management.
The first release starts with the specific scope of token transfers implemented with a technological stack and cryptography setup considered the most tested so far.
Hermez is called a network because the model is natively decentralized.
It is a layer 2 construction and intends to transact at thousands per second, so the consensus algorithm has to be simple for one agent (coordinator) to process this amount of transactions at any given time. With this model, it still keeps the properties of being permissionless to participate and censorship resistant for user transactions.
The decentralized model is implemented through a permissionless auction system for potential coordinators of the network to earn the right to process transactions during a slot of time.
This auction model incentivises the efficiency of coordinators since they need to process as many transactions as they can to collect the fees and compensate their investment and their operation expenses (and make money out of it).
Hermez implements a ZK-Rollup based on ZK-SNARK proofs, the most efficient in terms of batch cost in Ethereum.
Since the batches of transactions are a maximum of 2,000 in size, users will benefit from the scale and the underlying technology for nominal maximum savings up to 97% compared to the Ethereum cost for a single token transfer.
Security in Mind
Scalability can be achieved in different ways. Hermez is a layer 2 construction because it leverages Ethereum not only by using its native tokens but by also borrowing Ethereum's security as a strong public blockchain.
The implementation of Hermez is based on iden3's own technology (Circom and SnarkJS libraries) and the cryptographic technology which has been proven as the most robust so far, as used in the ZCash blockchain.
As a new network with a bootstrap period, Hermez has transitory security measures to protect the system with the objective to remove them and leave it fully decentralized.
Part of the Community
Hermez is designed to contribute to the community, since the project wouldn’t be possible without it. Innovations in scalability are a rare opportunity to realign incentives around the community and the public goods they provide.
40% of the generated value in the network will be sent to a donation process where the ecosystem projects will benefit from the donations. It will start with Gitcoin but other pools might be enabled in the future.
Hermez will open source all the protocol and coordinator code, is open to contributions, and has committed to contribute to the creation of a L2 ecosystem for initiatives such as a better L2 interoperability .
Focused on Usability
ZK-Rollups provide the technology for instant finality of transactions, which Hermez understands is a key feature for usability.
Hermez Protocol also provides a guarantee that user transactions can not be censored and that all funds can always be sent back to layer 1. Layer 2 solutions increase complexity for the users, but the Hermez project focus is to provide the best possible usability for user onboarding, transactions and reduce friction and confusion between layers.
With a Vision
Hermez project derives from the iden3 initiative, where a highly qualified team work to implement the vision of a universal and private by default self-sovereign identity. Scalability was required for the identity protocol to be universal and individuals could issue claims on other identities for (almost) free.
Symbiotically, Hermez Network is expected to benefit from the advancements in identity infrastructure such as validation, private credentials and reputation for improved usability and extend the range of potential use cases of a high throughput transaction network.
Hermez will guide its efforts in becoming an infrastructure which can serve the maximum number of users.