Polygon's significant acquisition of Hermez in 2021 faces severe challenges in zkEVM development and financial difficulties.
Hermez Acquisition and Its Significance
In 2021, Polygon acquired Hermez for $250 million, marking a decisive move towards zero-knowledge solutions. Hermez was rebranded as Polygon zkEVM, establishing a platform for high-speed, low-cost transactions compatible with Ethereum.
Polygon zkEVM's Financial Struggles
As of 2025, development on Polygon zkEVM has been halted, with the chain running at an annual loss exceeding $1 million. Despite initial investments, a lack of user traction and revenue has failed to cover operational costs.
Future of Polygon Beyond zkEVM
With zkEVM expected to be deprecated by 2026, Polygon is shifting focus to newer priorities such as Agglayer and enhancements on the PoS mainnet. This strategic shift reflects the need for adaptability in the rapidly evolving crypto landscape.
Polygon's future direction will focus on creating more efficient infrastructure aimed at supporting commitments around scalability and interoperability in Web3.
