What is Hermez network for blockchain?

Hermez Network uses zero-knowledge proofs to batch and process transactions off-chain, reducing Ethereum's gas fees and increasing scalability to 2,000 TPS.

Apr 14, 2025 at 09:07 am

The Hermez Network is a layer-2 scaling solution designed to enhance the scalability and efficiency of blockchain transactions, specifically focusing on the Ethereum network. By utilizing zero-knowledge proofs, Hermez aims to provide a more efficient and cost-effective way to process transactions on the blockchain. In this article, we will delve into the intricacies of the Hermez Network, its functionalities, and how it operates within the cryptocurrency ecosystem.

What is Layer-2 Scaling?

Layer-2 scaling solutions are protocols built on top of an existing blockchain to improve its transaction throughput and reduce fees. These solutions work by processing transactions off the main blockchain, known as layer-1, and then settling the final state back onto the main chain. This approach allows for faster and cheaper transactions while maintaining the security and decentralization of the underlying blockchain.

Hermez Network is one such layer-2 solution that specifically targets the Ethereum blockchain. It aims to address the issues of high gas fees and slow transaction speeds that have become prevalent on Ethereum, especially during periods of high network congestion.

How Does Hermez Network Work?

Hermez Network operates using zero-knowledge proofs, a cryptographic method that allows one party to prove to another that a given statement is true, without revealing any additional information. In the context of Hermez, zero-knowledge proofs are used to batch multiple transactions together and validate them off-chain, significantly reducing the load on the Ethereum network.

Here is how the process works:

• Transaction Submission: Users submit their transactions to the Hermez Network. These transactions are then grouped into batches.
• Off-Chain Processing: The batches of transactions are processed off-chain using zero-knowledge proofs. This processing is done by coordinators, which are entities responsible for managing the transaction batches.
• Proof Generation: Once the transactions are processed, a zero-knowledge proof is generated to verify the correctness of the batch without revealing the individual transaction details.
• Settlement on Ethereum: The proof is then submitted to the Ethereum blockchain, where it is verified and the final state of the transactions is settled on the main chain.

This approach allows Hermez to handle a large volume of transactions efficiently, with the potential to process up to 2,000 transactions per second.

The Role of the HEZ Token

The HEZ token is the native cryptocurrency of the Hermez Network. It plays a crucial role in the ecosystem by incentivizing participants and ensuring the smooth operation of the network. Here are the key functions of the HEZ token:

• Staking: Users can stake their HEZ tokens to become coordinators, earning rewards for processing and validating transaction batches.
• Governance: HEZ token holders can participate in the governance of the Hermez Network, voting on proposals and decisions that affect the protocol.
• Fees: Transaction fees on the Hermez Network can be paid using HEZ tokens, which helps to fund the network's operations and incentivize coordinators.

Benefits of Using Hermez Network

Hermez Network offers several advantages for users and developers looking to leverage the Ethereum blockchain. Some of the key benefits include:

• Reduced Transaction Fees: By processing transactions off-chain, Hermez significantly reduces the gas fees associated with Ethereum transactions.
• Increased Scalability: The ability to batch and process transactions off-chain allows Hermez to handle a higher volume of transactions per second compared to the Ethereum mainnet.
• Enhanced Privacy: The use of zero-knowledge proofs adds an additional layer of privacy to transactions, as individual transaction details are not revealed on the main chain.
• Interoperability: Hermez is designed to be compatible with existing Ethereum infrastructure, making it easier for developers to integrate Hermez into their applications.

How to Use Hermez Network

Using the Hermez Network involves a few straightforward steps. Whether you are a user looking to send transactions or a developer interested in integrating Hermez into your application, here is how you can get started:

• Download the Hermez Wallet: Users can download the Hermez wallet from the official website. This wallet allows you to manage your HEZ tokens and interact with the Hermez Network.
• Fund Your Wallet: Transfer ETH or other supported tokens to your Hermez wallet address. You can then use these funds to send transactions on the Hermez Network.
• Send Transactions: Use the Hermez wallet to send transactions to other Hermez users. The transactions will be processed off-chain and settled on the Ethereum blockchain.
• Stake HEZ Tokens: If you are interested in becoming a coordinator, you can stake your HEZ tokens through the Hermez wallet. This will allow you to participate in the processing and validation of transaction batches.

For developers looking to integrate Hermez into their applications, the process involves the following steps:

• Integrate the Hermez SDK: Hermez provides a Software Development Kit (SDK) that developers can use to integrate Hermez functionality into their applications. The SDK is available in multiple programming languages, including JavaScript and Python.
• Set Up a Hermez Node: Developers can set up a Hermez node to interact with the Hermez Network directly. This involves downloading and running the Hermez node software, which can be found on the Hermez GitHub repository.
• Implement Transaction Logic: Using the Hermez SDK, developers can implement the logic for sending and receiving transactions on the Hermez Network. This involves calling the appropriate SDK functions to process transactions and interact with the network.
• Test and Deploy: Once the integration is complete, developers should thoroughly test their application to ensure that it interacts correctly with the Hermez Network. After testing, the application can be deployed to production.

Security and Privacy Considerations

Security and privacy are paramount in the world of blockchain and cryptocurrency. Hermez Network addresses these concerns through several mechanisms:

• Zero-Knowledge Proofs: By using zero-knowledge proofs, Hermez ensures that transaction details are not exposed on the Ethereum mainnet, enhancing user privacy.
• Decentralized Network: Hermez is designed to be decentralized, with multiple coordinators processing and validating transactions. This reduces the risk of a single point of failure and enhances the security of the network.
• Smart Contract Audits: The Hermez smart contracts have undergone multiple audits by reputable security firms to ensure their integrity and security. These audits help to identify and mitigate potential vulnerabilities in the protocol.

Frequently Asked Questions

Q: Can Hermez Network be used with other blockchains besides Ethereum?

A: Currently, Hermez Network is specifically designed to work with the Ethereum blockchain. However, the underlying technology of zero-knowledge proofs and layer-2 scaling can theoretically be adapted to other blockchains in the future.

Q: How does Hermez Network handle transaction finality?

A: Hermez Network achieves transaction finality by settling the final state of transactions on the Ethereum blockchain. Once the zero-knowledge proof is verified and accepted on the Ethereum mainnet, the transactions are considered final and irreversible.

Q: What are the minimum requirements to become a Hermez coordinator?

A: To become a Hermez coordinator, you need to stake a minimum amount of HEZ tokens. The exact amount may vary based on the network's requirements, but it is designed to be accessible to a wide range of participants. Additionally, you will need to run a Hermez node and have the technical capability to process and validate transaction batches.

Q: How does Hermez Network ensure the integrity of off-chain transactions?

A: Hermez Network ensures the integrity of off-chain transactions through the use of zero-knowledge proofs. These proofs allow coordinators to verify the correctness of transaction batches without revealing the individual transaction details. Additionally, the final state of the transactions is settled on the Ethereum blockchain, providing an additional layer of security and integrity.