Polygon (formerly Matic Network), an Ethereum-based scaling solution, has announced its acquisition of Mir Protocol (operated by Predicate Labs Inc.), a zero-knowledge cryptography startup, for $400 million.
This latest acquisition from Polygon follows its previous acquisition of Hermez Network, another ZK-Rollups-based Ethereum scaling solution, for $250 million back in August. The deal will see Polygon investing a maximum of 250 million units of $MATIC tokens (~$627 million).
To date, several ZK-rollup-based Ethereum scaling technologies are available in the crypto market, albeit with limited functionalities: StarkWare's StarkEx, Loopring, and Matter Labs' zkSync. Of these projects, StarkEx maintains the highest total value locked (TVL), with almost $1.3 billion on its protocol. Loopring follows with some $630 million, while zkSync trails the pack from roughly $60 million.
"Polygon plans to focus on ZK cryptography as the end game for blockchain scaling," shared Polygon co-founder Sandeep Nailwal. "We have made a strategic decision to explore and encourage all meaningful scaling approaches and technologies at this stage. We believe this is the way to establish Polygon as the leading force and contributor in the ZK field and onboard the first billion users to Ethereum," he adds.
Mir Protocol is a blockchain startup that's using privacy tech to make Ethereum faster and cheaper. With its zero-knowledge crypotography solutions, blockchain transactions can be processed without all the data being revealed on publicly viewable blocks — helping with scaling as well as reducing gas fees. With Mir Protocol, external validators can authenticate encrypted transactions or papers without disclosing the concealed information using zero-knowledge algorithms.
Mir Protocol's utilization of zero-knowledge proof (ZK-proof) technology will be beneficial to Polygon's planned expansion for the coming years, with extensive use cases in areas such as decentralized finance, persistent layering for Internet-of-Things applications, and other use cases that require zero-knowledge validation.
Polygon claims that Mir Protocol has the most efficient and fastest ZK-proofs algorithms which allow it to scale the production of proofs and validate more transactions from a single record. "The Mir team has invested a lot of time developing and fine-tuning their ZK-proof technology called Plonky2," Polygon cofounder Mihailo Bjelic says.
"It is a great piece of engineering," he Bjelic contiued. "Plonky2 can generate recursive proofs in an incredible 170 milliseconds on a laptop. Most importantly, plonky2 is practical to use on Ethereum, with 45kb proofs in size-optimized mode."
Founded about two years ago by Brendan Farmer and Daniel Lubarov, the acquisition agreement for Mir Protocol was signed last November 26, a deal that involves 190 million $MATIC tokens as resources, and another set of $100 million in USDC stablecoins. The two co-founders will join eight other colleagues to become part of the Polygon team.
The deal will undergo an initial vesting period of three years, with Mir's team being provided with the funds over this span of time, based on their deliverables and output.
"The Polygon team is amazing," Brendan Farmer told "We share the same values and are very excited to work together."
The acquisition deal will also see Mir Protocol becoming rebranded to Polygon Zero, with its primary project focused on the building of a ZK-rollup based on the ZK-proof tech it has already developed.
According to Bjelic, the Polygon Zero ZK-rollup should be ready sometime next year. Meanwhile, with regards to the zkEVM (zero-knowledge Ethereum Virtual Machine) currently being developed by the Polygon Hermez team, a tentative launch date of mid-2022 was given by Bjelic.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.