The team behind iden3, an open-source set of tools for self-sovereign identities on public blockchains, announced today the development of Hermez, a zero-knowledge (ZK) rollup, focused on significantly increasing the number of transactions on top of the Ethereum network and adding a unique Proof of Donation feature.
ZK-rollup is a layer 2 construction that scales Ethereum by rolling multiple transfers into a single transaction.
“It’s clear that zk-rollups will be the dominant scaling paradigm for at least the next couple of years in our industry. Hermez will focus on transactions that will bring ease to scaling payments and token transfers on the Ethereum network, and also give back to the community with its unique Proof of Donation feature,” said Jordi Baylina, Co-Founder of Iden3.
Hermez will be able to execute up to 2,000 transactions per second — a sizable increase from the 15 transactions per second currently possible using the Ethereum network alone.
Transactions happening on Hermez are not dependent on the gas prices of mainnet which significantly reduces the cost of transactions
Hermez will also be the first of its kind to introduce Proof of Donation, a decentralized bidding mechanism with reinvestment in the protocols and teams building projects that run on top of Ethereum.
The mechanism invites interested network coordinators to compete in an auction bidding Hermez tokens, HEZ, where the highest bidder wins the right to create the next block and collect transaction fees.
Forty percent of earnings generated by the auction process will be reinvested back into Ethereum community projects. Initially, funds will go directly to the Gitcoin Grant’s Quadratic Matching rounds, while a future governing DAO is established to decide other community quadratic pools to distribute funds as they become available.
This announcement comes at a time when the decentralized finance (DeFi) industry is booming, having surpassed $4 Billion in market cap in July 2020.
This rise brings increased pressure on the Ethereum network to keep up with demand from users and developers of decentralized applications (dApps) that are competing for the limited space of each block — steadily increasing gas prices and the cost of transacting on-chain.
The Iden3 team are the creators of the zk-focused open source libraries Circom and SnarkJS, which power solutions like Tornado Cash (improves transaction privacy), Semaphore (a framework for zero-knowledge signaling), and Zkopru (a layer-2 scaling solution for private transactions).