Startup Iden3 has unveiled Hermez’s solution to scale Ethereum using a Proof-of-Donation algorithm. The solution will allow up to 2,000 transactions per second.
Iden3 co-founder Jordi Baylina revealed that Hermez is a zk-rollup that will allow the Ethereum blockchain to process more transactions. Multiple transactions will be grouped into a separate chain and then periodically downloaded as single transactions. This will allow more people to use the blockchain without causing network congestion. Today, Ethereum processes 15 transactions per second, while Hermez, according to developers, will allow up to 2,000 transactions per second. In addition, the solution will not be affected by transaction fees on the main network, which will significantly reduce the cost of sending funds.
Iden3 developers have announced that Hermez will use a proof of contribution algorithm. It’s about a decentralized filing system. Users will participate in the auction by making an offer in HEZ tokens. The higher bidder will be eligible to create the next block and collect transaction fees. The mechanism will allow 40% of income to be reinvested in protocols managed by the Ethereum community, as well as in projects created on the basis of this network. Beilina added that he plans to introduce a Decentralized Autonomous Organization (DAO) next year, completely transferring control to users.
“I am confident that in the next few years, zk-rollups will become the predominant way to scale the blockchain,” said the CEO of Iden3.
As a reminder, Ethereum developer Justin Drake previously expressed optimism about zk-rollups and recursive proof SNARKs for scaling. In addition, last year Vitalik Buterin stated that, ideally, the Ethereum blockchain should process up to 100,000 transactions per second. This can be done using sharding, distributing transactions among different groups of computers, selected at random.