Harmony Fundamental Report
Summary
Harmony is a blockchain platform that makes it easier to create and use decentralized apps (DApps). The network focuses on random state sharding, which allows for the creation of blocks in seconds, with the goal of revolutionizing the way decentralized apps work.
Opportunity
The idea of blockchain has grown around the world since the publication of the Bitcoin whitepaper in 2008. As Bitcoin got popular, the performance bottleneck of its restricted throughput of ~7 Transactions Per Second (TPS) became apparent, and the cost of using it as a payment system became prohibitively high.
Ethereum launched a novel blockchain architecture that allowed developers to implement a variety of blockchain applications using "smart contracts" in 2014. Nevertheless, Ethereum could not solve the scalability issue and, with just ~15 TPS, was unable to handle high-throughput applications like DEcentralized Exchanges (DEX) or gaming.
Many blockchain projects offered numerous ways to boost transaction throughput due to Ethereum and Bitcoin's performance limits. Proof-of-Stake (PoS) consensus has been proposed to replace Proof-of-Work (PoW) consensus in many blockchains. Other blockchains, such as EOS, utilize Delegated Proof of Stake (DPoS), which elects block proposers through voting rather than an on-chain mechanism. IOTA, for example, has replaced the chain-of-blocks data structure with a DAG (Directed Acyclic Graph) data structure, which eliminates the requirement of transaction processing in sequential order.
Harmony is a sharding-based blockchain that is completely scalable, safe, and energy-efficient. Harmony solves the challenges that exist in existing blockchains by merging the greatest research findings and technical skills into a finely tuned framework.
Platform
Harmony as a smart contract platform introduces a new version of the proof-of-stake (PoS) consensus. This mechanism, known as Effective Proof-of-Stake (EPoS), allows hundreds of validators to stake at the same time. This consensus mechanism was invented using the Harmony network's sharding idea. EPoS is intended to be quicker and more scalable than PoW consensus techniques. Staking consensus methods rely on a large number of value holders (Token holders) who serve as validators, whereas PoW demands a lot of electrical and computer capacity. In order to attract many node operators, Harmony is trying to increase staking incentives. The Harmony Open Staking program encourages users to connect with the network and rewards those who have the most ONE tokens.
On the platform, developers can create apps and launch their own tokens. These tokens will be ONE standard, Harmony's version of Ethereum's ERC20 standard, which here is called HRC20. The Harmony mainnet enables Ethereum apps with 2-second transaction finality and 1000-fold cheaper costs than the Ethereum mainnet.
Harmony is an Ethereum Virtual Machine (EVM)-compatible blockchain with a lot of capability. Harmony should seem extremely comfortable to Ethereum developers because it is entirely Ethereum compatible and inherits practically all of Ethereum's tools and libraries, such as truffle, remix, web3js, and so on. JSON RPCs are the easiest way to connect with the Harmony blockchain. You can find more information about developing tools here [https://docs.harmony.one/home/developers/getting-started]
Technology
By bringing the greatest research to production, Harmony has solved the blockchain trilemma.
Consensus
Fast Byzantine Fault Tolerance (FBFT)
A blockchain's consensus algorithm is a crucial component. It is commonly referred to as the "engine" of a blockchain since it dictates its security and performance. Fast Byzantine Fault Tolerance (FBFT) is Harmony's consensus method, which is an inventive update on the well-known PBFT technique. Because the BLS (Boneh–Lynn–Shacham) aggregate signature is employed to considerably minimize the transmission cost, FBFT is one order of magnitude quicker and more scalable than PBFT. FBFT, in particular, makes it possible for at least 250 validators to reach a consensus in a little under two seconds.
Sharding
The Harmony blockchain has three dimensions shards: state, network, and transaction.
Epochs
In the Harmony blockchain, an epoch is a pre-determined period of time wherein the shard validator committees remain constant. One epoch in the Harmony mainnet is 32768 blocks long, or about 18.2 hours.
Crosslinks
A crosslink is a piece of data transferred from shard chains and saved in the beacon chain. A crosslink comprises block signature data as well as block identifier data such as block hash, block number, view id, and epoch, among other things.
Randomness
To avoid single-shard attacks, Harmony's sharding technique relies on a secure randomization source to allocate validators to shards in a genuinely random manner. Harmony devised a distributed randomness generation (DRG) protocol that incorporates both VRF (Verifiable Random Function) and VDF (Verifiable Delay Function) in order to accomplish the following critical properties:
• Unpredictable
• Un-biased
• Verifiable
• Scalable
Transactions
• Transaction Finality
• Transaction Fees
Transaction Finality
The notion of block finality refers to the idea that a proposed block is finalized by the blockchain and cannot be reversed because the cost of doing so is too expensive. The time it takes for new proposed blocks to be finalized is commonly used to determine block finality.
Transaction Fees
Harmony utilizes Ethereum's transaction fee model, in which users pay a certain amount of coins to have their transactions processed and added to the blockchain. Because Harmony is completely EVM compatible, users may directly translate the Ethereum fee model and apply it to Harmony. For instance, a standard token transfer transaction costs 21000 gas. Because Harmony has high TPS and the network is very efficient and hardly congested, the gas price can be as cheap as 0.000000001 ONE (or 10 Gwei in Ether). This means that a standard transfer cost just 0.000021 ONE. Transactions on the Harmony network typically cost about $0.000001 in gas fees.
Effective Proof-of-Stake
Harmony's Effective Proof-of-Stake (EPoS) is the first staking method to accomplish both security and decentralization on a sharded blockchain. EPoS enables hundreds of validators to stake, and the unique effective stake method decreases the likelihood of stake concentration.
Effective Stake
An effective stake is a novel metric in EPoS that aims to avoid stake concentration while maintaining capitalistic fairness.
Let's call the raw stake the bid price of the elected BLS keys. An elected BLS key's effective stake is a limited value on its raw stake with a threshold around the median bidder's raw stake (shown as a median stake in the diagram below). The maximum and lower thresholds are 115% of the median stake and 85% of the median stake, respectively. The effective stake of a key with a raw stake that is out of bounds of the threshold will be constrained by the corresponding threshold if the raw stake is out of bounds of the threshold; otherwise, the effective stake will be the same as the raw stake.
Staking
To skate ONE token you should go to this URL: staking.harmony.one and with supported wallets such as Ledger Nano, Metamask, Harmony One wallet, and Math wallet delegate your One token to the Elected wallets. When you connect your wallet currently connect to shard 0 and your transaction from exchanges such as Binance or Crypto.com support shard 0 as well. The picture below illustrates the validator lists on a Harmony mainnet. As you can see in the picture, you can choose your validator based on Name, Expected return, amount of One token staked on that specific validator, commission, and uptime of the validator. Please always notice a validator you are willing to choose stays among the Elected ones otherwise you do not receive any rewards.
The picture below illustrates the Portfolio lists on a Harmony testnet. In this section of the wallet you always can monitor your Total ONE available, the amount of One staked, Rewards, and the list of validators that you delegated your tokens.
It is worth mentioning that the minimum amount of ONE token that you need to be able to delegate your coin is 100. In order to run a validator, you need 10,000 ONE.
Network Governance
Voting for Harmony Network Governance is presently available through the Harmony Governance App and the HMY CLI
[https://docs.harmony.one/home/network/wallets/harmony-cli]. As with other projects and networks, the community, or in this case, the validators, should make judgments on what enhancements, incentives, or adjustments should be made to the Harmony network to make it more appealing to community validators and participants.
The Harmony core team is only allowing validators to create and vote on proposals since the network and core protocol are difficult and require a comprehensive understanding of EPoS as well as some technical/blockchain experience. The proposal, voting, and implementation processes are all part of the network governance paradigm.
Tokenomics
Currently, there are 11,807,768,774 ONE in circulation with a total supply of 13,156,044,839 ONE. At the current price of 0,158 per token, the market cap is $1,785,106,101 and ranked 63 in the coingecko. The lowest fraction of a ONE token is called a Gwei, and it is 0.000000001. The following is a breakdown of the token distribution:
Token Supply Distribution:
• Seed sale tokens comprise 22.4% of the total supply.
• Launchpad sale tokens comprise 12.5% of the total supply.
• Team tokens comprise 16.9% of the total supply.
• Protocol development tokens comprise 26.4% of the total supply.
• Ecosystem development tokens comprise 21.8% of the total supply.
ONE Token Release Schedule
The figure below shows the total quantity of ONE token that will be placed into circulation each month, as well as their split. Team tokens were locked until 2020, with a vesting period of four years.
Harmony’s New Tokenomics
Harmony's economic model has been changed following careful deliberation ahead of the imminent open staking launch. In this new paradigm, regardless of the average block time or staking ratio, the overall reward throughout the network (issuance plus transaction fees) will stay constant. The purpose of this move is to increase the staking ratio, simplify the model, and pave the way to zero issuance, all of which we feel will benefit Harmony in the long run.
For Harmony's network, this model establishes a constant yearly reward rate of 441M ONE. Regardless of underlying characteristics like average block time and staking ratio, the overall issuance throughout the network will stay constant.
The total of block rewards plus transaction fees is referred as the reward. As the network grows in popularity, transaction fees will compensate for fresh token issuance.
The purpose of this adjustment from the original model is to increase the staking ratio, simplify the model, and pave the way to zero issuance, all of which we feel will benefit Harmony in the long run. More detail is available here
[https://docs.google.com/spreadsheets/d/1bcABBb47X8jOAQC-Dno9A9HFtLf8vlRp70P9xVqjhG4/edit#gid=1322834538]
As of the new Harmony, tokenomics plan by 12/31/2050 Total Supply will be 26,161,429,158 ONE.
Token Overview & Use Cases
Harmony's scalable, high-throughput protocol is backed by a native token that may be used for a variety of transactions and protocol participation (staking, transaction fees, voting & governance). The Harmony token will be used in the protocol in the following ways:
• Staking, which is required to participate in the POS consensus and receive block rewards and transaction fees, is done with the token.
• Transaction costs, gas, and storage fees are all paid using the token.
• The cryptocurrency is used to vote for the protocol's on-chain governance.
Ecosystem
The Harmony team is working hard to ensure that the network and ecosystem have a solid basis. For successful years, Harmony is grateful for the participation and support of the validators, stakeholders, developers, grantees, and collaborators. Since February of 2019, the Harmony Testnet 1.0 has been operational. Harmony already has a sizable ecosystem, with several collaborations, partnerships, and integrations. The picture below shows the current ecosystem map as of June 2021 based on Harmony docs.
It's worth to mention that, despite the fact that the mainnet has been operational only June 2019, Harmony already has a sizable ecosystem in place, with several partnerships, collaborations, and integrations.
ChainLink
This integration will give Harmony users with off-chain data resources via Chainlink oracles, allowing developers to utilize price feeds and other off-chain data in their applications. This is a crucial development, especially as Harmony focuses more on DeFi applications and cross-border financing.
Dexs avalible on Harmony
ViperSwap
ViperSwap is a DeFi DEX available on the Harmony Blockchain.
Synapse Protocol
The Synapse Protocol enables asset transfers and swaps between Ethereum, Layer 2 chains, BSC, Avalanche, and other blockchains. With easy, connect ETH, Stables, OHM, and more.
Rubic
Rubic is a multichain DeFi ecosystem with cross-chain swaps, fast swaps, and many more features.
Multichain
Multichain (previously Anyswap) is a completely decentralized cross-chain swap protocol with an automated pricing and liquidity mechanism based on Fusion DCRM technology.
SushiSwap
SushiSwap is a cryptocurrency exchange that is completely decentralized as a fork of UniSwap. On one decentralized, community-driven platform, you may swap, earn, stack yields, lend, borrow, and leverage.
MochiSwap
MochiSwap DEX is proud to announce the launch of a decentralized fee-based staking incentive scheme for MOCHI holders. MOCHI holders will be able to access the largest percentage of fee-based trading.
SeeSwap
Users may swap any asset offered in the pools directly from your wallet without any limits. SeeSwap value pool liquidity and pay dividends to market makers for each transaction.
Game on Harmony
DeFi Kingdoms is a game, a DEX, a liquidity pool, and a market for uncommon utility-driven NFTs, all of which are presented in a nostalgic fantasy pixel art style. Defi Kingdoms has its own token which is called JEWEL.
Horizon Bridge
Horizon, the first version of Harmony's Ethereum-Harmony cross-chain bridge, has been deployed on the mainnet. This bridge currently supports asset transfer among Ethereum and Binance Smart Chain (BSC). To access this bridge, you can find it here [bridge.harmony.one]. The picture below shows this bridge dashboard in which users can transfer their assets among the aforementioned Blockchain with the Harmony network.
Bitcoin Bridge
Harmony is getting ready to deploy its native bitcoin bridge, and it needs the community's help to strengthen the bridge's decentralization and resilience. Exterior involvement will take the form of external vaults for the bridge. The picture below shows this bridge dashboard.
Bridge Terra UST
The Terra Bridge is a web interface that enables users to transmit Terra assets between supported blockchains using their respective bridges.
Team
Harmony start with the slogan of “Good People with Great Ideas”. According to Harmony website team, Harmony teams have combined expertise in academic research, global-scale engineering, and long-term company building. Harmony team members have built systems at the largest scale in the world’s top tech companies such as Apple, Microsoft and Google.
Stephen Tse
Stephen Tse 谢镇滔 has been obsessed with protocols and compilers since high school. He is graduated with a doctoral degree in security protocols and compiler verification from the University of Pennsylvania. Stephen worked for Microsoft Research, Google as a senior infrastructure engineer, and Apple as a principle engineer for search ranking. With institutional venture financing, he launched the mobile search company Spotsetter, which was ultimately bought by Apple.
Rongjian Lan
Rongjian Lan worked for Google as a search infrastructure developer for the Play Store. Rongjian is the co-chair of the ABC Blockchain Foundation, which includes more than 100 developers from companies such as Google, Facebook, and LinkedIn. He received his bachelor's degree from the University of Science and Technology Beijing and was a doctorate candidate in computer science at the University of Maryland College Park.
Minh Doan
For the past five years, Minh Doan has worked on Google Assistant, Play, and Plus. He was a doctorate student at the University of California, Irvine, studying algorithms and distributed systems. He graduated from Moscow State University with a master's degree in computer science and applied mathematics.
Nick White
Nick White graduated from Stanford University with a bachelor's and master's degree in electrical engineering, focusing on signal processing, optimization, and control. He studied artificial intelligence and applied mathematics as a graduate teaching assistant at Stanford.
Sahil Dewan
Sahil Dewan is a Harvard Business School alumnus who served as the president of the club for blockchain and cryptocurrency. He has advised various blockchain businesses while working at Draper Dragon Fund. Sahil launched FuturEd, an ed-tech company that pioneered a mobile platform for alumni interaction and fundraising for more than 100 Indian educational institutions. He was also voted as the country president of AIESEC India, a young leadership organization with over 125 chapters across the world.
Leo Chen
At Amazon Web Services, Leo Chen headed a team of eight developers. He created high-throughput storage virtualizations for about 200k Amazon EC2 instances there. Leo designed the original Kindle Fire and architected FireOS for all Amazon devices at Amazon Lab126. He worked on the Linux kernel, embedded systems, and large-scale distributed systems at Ericsson and Broadcom. Leo graduated from Zhejiang University with a bachelor's degree in computer science and a master's degree in computer science from Simon Fraser University.
Eugene Kim
During his 15 years at NTT and three years at AWS' networking infrastructure division, Eugene Kim created innovative networking protocols.
Li Jiang
During his college years, Li Jiang built the most profitable logistic firm. Li graduated from Northwestern University with a bachelor's degree in economics. He teaches at Northwestern's Farley Center for Entrepreneurship and Innovation as an adjunct professor.
Chao Ma
Amazon's Chao Ma worked as a machine learning scientist. He focused on anti-abuse measures in online marketplaces, retail product pricing, and natural language processing. In early 2017, Chao implemented an IPFS prototype. Chao earned a bachelor's degree from the Chinese University of Science and Technology, a master's degree from Zhejiang University, and a Ph.D. in mathematics from the University of Colorado Boulder.
Helen Li
Helen Li was a senior journalist at Bloomberg Business Week and a primary writer at CBN Weekly. She interviewed industry titans for over a decade, including the founders of Lenovo and Baidu, and authored more than 50 cover stories for CBN Weekly. Helen has been in charge of public relations and marketing for blockchain initiatives in both China and the United States since 2018. Helen holds a Master's degree in Journalism and Culture Studies from Hong Kong's City University. She has won various industry accolades, including the Top Tech Report Award from ByteDance.
Garlam Won
ICONIZ, a US-China blockchain accelerator and venture financing organization, has Garlam won as its Head of Global Partnership. While at Deloitte, he started a digital innovation business and advised Fortune 500 companies.
Mary Dansker
Marianne (Mary) Dansker launched Uptimo.biz, a blockchain-focused business development firm that has assisted companies in raising more than $25 million. She is the founder of Disruption Disciples Copenhagen, a top-tier executive network, and has worked on marketing and business development efforts for major companies such as AUDI, Samsung, Sony, and M.M.
Opinion
Concerns
The continuous annual reward rate of 441M ONE for Validators and Delegators is a source of concern for the token price. This might put a lot of selling pressure on ONE, as some tokenholders may want to lock in their profits in exchange for more tokens. Based on Harmony's new tokenomics plan by 12/31/2050 Total Supply will be 26,161,429,158 ONE which is double with respect to the current total supply.
Positives
The ecosystem has already evolved to the number of projects from some of the industry's biggest names, as well as a large supporting community such as SushiSwap and Curve finance. Two of the most interesting factor of the Harmony platform is a low transaction fee and high-speed transaction finality. On the other hand, Harmony in comparison to the other competitors such as Cardano, Ethereum, and Polkadot involved other people to validate the network and a block validator which has many long-term benefits in terms of decentralization and mutual gain. Therefore, we can see strong Metcalfe's law on this platform similar to Ethereum.
Harmony has garnered enormous attention in a relatively short period of time. When compared to competitors like Ethereum ($317.8 billion and ranked #2), Solana ($28,4 billion and ranked #8), Cardano ($27.5 billion and ranked #9), Polkadot ($18.6 billion, and ranked #11), and Harmony ($1,63 billion at total supply and ranked #68) has significant long-term upside potential if it continues to build out its ecosystem in the same manner.
According to DeFi Liama total value locked on Harmony is more than 767 Million USD and most of the locked value is available on Defi Kingdoms as a gaming platform. It shows that DeFi as well as gaming users like this cheap and high transaction finality.
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