Ethereum Layer 2 scaling solution Hermez Network has gone live
Ethereum Layer 2 scaling solution Hermez Network that uses ZK-Rollups technology for scalability has gone live. The development means Hermez’s mainnet has been launched, and users can now make transfers at lower gas costs.
A second layer scaling solution for Ethereum called Hermez Network using ZK-Rollups technology has been launched
People should save around 90% of the gas costs when using ZK-Rollups. The current average gas fee is about $16 per transaction. With around 90% savings, the cost would come down to about $1.5 per transaction.
Besides lower fees, Hermez’s tech lead Jordi Baylina also has a higher throughput than Ethereum, it can process more transactions per second. Ethereum’s current throughput is about 15 transactions per second. Baylina said Hermez can multiply the capacity of Ethereum by 100 times. Hermez uses ZK-Rollups for scalability. They help bundle hundreds of transfers into a single transaction, thereby reducing data storage and gas fees for validating transactions.
Ethereum creator Vitalik Buterin recently said that:
“ZK-Rollups will win out in all use cases in the medium to long term as ZK-SNARK technology improves.”
As for Optimistic Rollups, Buterin said they are likely to win in the short term for general-purpose computation. At the same time, ZK-Rollups are likely to win out for simple payments and other application-specific use cases. One of the first projects to integrate with Hermez is Tether. With Hermez’s mainnet launch, Tether’s USDT stablecoin is available on the network.
Besides USDT, Hermez is initially also supporting ETH, Wrapped Bitcoin (WBTC), Dai (DAI), and Hermez token (HEZ). That means anyone using these tokens can now use the Hermez network to make transfers. The zk-rollup requires depositing funds to a smart contract and withdrawing them to use in the Ethereum mainnet. Unlike optimistic rollups, however, funds can be withdrawn immediately from layer two. In Hermez’s case, there are still some precautionary limitations to ensure a smooth launch.
While Hermez’s mainnet has launched, there is still a lot of work to do. That includes making Hermez fully decentralized. Hermez is now non-custodial but still has some centralization points.
“During the upcoming weeks, we need to fine-tune some parameters, and we hope to have very soon a fully decentralized governance less system.”
Nonetheless, fostering layer two adoptions seems to be harder than first anticipated. Payments-only systems can only be used for transferring funds between exchanges or paying for products in centralized ecosystems that support layer-two. They cannot be directly used with DeFi, as it would require users to withdraw and redeposit funds each time, partially defeating the purpose of the rollup. Still, with the Tether and USDC contracts being among the largest gas guzzlers on the network, even a payments-only rollup can significantly alleviate pressure on Ethereum fees.
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