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Harmony (ONE) is a decentralized blockchain-based platform. The Harmony platform was launched in May 2019 as part of Binance Launchpad's initial exchange offering in May 2019. Since its core network’s launch in June 2019, Harmony has grown and has more than 1,000 nodes as of the time of writing.
The project aims to solve the problem of achieving both scalability and decentralization. The Harmony team also promises to deliver high throughput with low latency and cost. All this is achieved by a combination of a proof-of-stake consensus mechanism and sharding technologies.
Harmony was founded as a company in 2018. In April 2019, the company raised $18 million in funding from investors such as Silicon Valley-based Consensus Capital, Hong Kong-based Lemniscap VC, and others.
Harmony uses random state segmentation (sharding) to improve scalability and speed up transactions and block creation.
Sharding allows the network to divide the database into smaller segments to reduce latency. In addition, segmentation eliminates the risk of network congestion, allowing near-instantaneous transactions.
The segmentation technique is based on a distributed randomness generation procedure that uses an Effective Proof-of-Stake consensus mechanism. This combination ensures security, scalability, and simple and easy verification.
Thus, the Harmony blockchain is divided into four shards (networks). These shards run in parallel, but are verified by separate stakeholder groups. This enables a "division of labour" that makes the blockchain more efficient and reduces latency.
The Fast Byzantine Fault Tolerance (FBFT) protocol used by the Harmony network is an improved version of the BFT protocol. FBFT increases the speed and efficiency of the Harmony network through parallel transaction processing. At the same time, Harmony minimizes communication costs by signing transactions using aggregate signatures, allowing 250 or more validators to reach consensus in less than two seconds. Instead of asking all validators to broadcast their votes, the leader runs a multi-signature signing process to collect the validators’ votes in a multi-signature and then broadcast it.
Harmony is compatible with the Ethereum Virtual Machine (EVM). This maximizes interoperability and allows smart contracts to be deployed and executed in the same way as in the Ethereum network. This allows applications built on Harmony to be fully interoperable with many other blockchains using its native bridge.
Harmony can be used to build decentralized applications in different industries: financial industry, gaming industry, healthcare, etc. Harmony will allow tokenization of physical world assets or issuance of special types of tokens, such as loyalty tokens, credits, etc. A promising direction will be the creation of Harmony-based NFT marketplaces.
The platform is optimized for both enterprise-level and public networks. The platform implements EVM to provide a flexible and scalable environment for developers. The Harmony team has launched Horizon, the Ethereum-Harmony cross-chain bridge. Horizon allows free conversion of funds between Harmony and Ethereum blockchains, including any ERC-20 tokens. The protocol supports trading and has its own ONE utility token, which is also used as the primary way to pay commissions on the Harmony network.
Google Chrome plugins and online wallets are various means of storing Harmony cryptocurrency. Harmony Wallet is available as a plugin for Google Chrome. There are also third-party wallets for storing ONE.
The Harmony platform operates on its native ONE Token. It has several use cases.
First, ONE token is used in staking. Potential node runners need to stake a certain amount of ONE token to be elected as a validator. ONE token holders are also able to delegate their ONE tokens to the existing validators to participate in the staking process. The more ONE token staked, the more secure the network becomes. Elected validators who successfully sign blocks will receive block rewards in ONE tokens as a compensation.
Second, the tokens are used to pay for various Harmony fees, including transaction fees, storage fees, and gas fees.
And finally, ONE token holders are allowed to vote within the platform's government system.
The total supply of ONE tokens equals 21 million. Of the total number of ONE tokens, 22.4% were allocated to the initial seed sale. Another 12.5% were reserved for additional sales on Launchpad. Harmony's founding and development team received 16.9% of the total offering. About 26.4% of ONE tokens were allocated for protocol development and another 21.8% for ecosystem development.
As with other PoS-based networks, Harmony validators stack native blockchain tokens to participate in system validation and receive rewards. The minimum amount of tokens to run an active validator is 10,000 ONE.
However, validators are responsible for their performance. If a validator misses 1/3 of the blocks in an era the validator temporarily loses its slot. And if a validator is spotted double-signing, it loses at least 2% of its stake, depending on how many slots are corrupted, as this behavior is considered malicious. A fraction of the staked tokens is slashed as penalties.Slashing penalties are imposed on both validators and delegators.
For those who want to participate in staking without running a validator, delegating is the best way to participate and earn blockchain rewards. ONE holders can delegate their tokens to existing validators using the official Staking Explorer. A portion of the block reward earned by the validator will be paid to the delegator.
Block rewards earned are stored in a separate delegator reward balance, which can be immediately deposited into the delegator's account balance. Block rewards can also be placed again to achieve a multiplier effect.
Harmony’s Horizon bridge was hacked for $100 million worth of 85,837 ETH tokens in June 2022. The attack was later identified to have come from the notorious North Korea-backed cybercriminal organization known as the Lazarus Group. It was established by the team that private keys from a multi-sig wallet were compromised and funds were stolen from the Ethereum side of the bridge.
Harmony announced a bug bounty program, offering $1 million in exchange for the return of the assets and promising to “advocate for no criminal charges when funds are returned”. Nevertheless, the program wasn’t successful. One month following the Horizon Bridge hack, Harmony published a proposal on its governance forum suggesting two possible paths for reimbursement.
According to the proposal, there were 65,000 wallets and 14 different asset types affected by the incident and both options for reimbursement included the issuance of new ONE tokens. While the first option accounted for 100% reimbursement, the second option had an estimated reimbursement rate of 50%. Due to the massive negative feedback from the community the proposal was withdrawn on August 10, 2022.
The Harmony team consists of 20 employees with a broad experience in economics and technology. Some of the team members used to work for big corporations such as Microsoft, Google, Apple, and Amazon. In particular, they developed Google Maps and Apple Siri.
Founder & CEO Stephen Tse has been obsessed with protocols and compilers since high school. He previously worked on ICQ and X11 protocols, and coded in OCaml. In 2002, he graduated from Simon Fraser University in Australia with a major in computer algebraic geometry. In 2007, he received his PhD degree in Cryptographic Protocol from the University of Pennsylvania. Stephen Tse was a researcher at Microsoft Research, senior infrastructure engineer at Google, and chief search engineer at Apple. He founded the mobile search engine Spotsetter, where he worked for three years.
Engineer Rongjian Lan received his PhD in Computer Science from the University of Maryland College Park and his BA from the University of Science and Technology in Beijing. He worked at Google as a search infrastructure engineer for Play Market. Since early 2017, Rongjian Lan has studied decentralized protocols in depth. He is co-chair of ABC Blockchain Foundation with over 100 engineers from Google, Facebook, and Linkedin.
Marketing director Nick White received his BS and MS degrees in Electrical Engineering from Stanford University, where he focused on signal processing, optimization, and control. Nick White worked as an AI specialist at Hong Kong-based AI incubator Zeroth.AI.
The Harmony protocol has been audited by Peckshield in January, 2020.
More than 78 dApps have been built on Harmony. The top projects are a DeFi game DeFi Kingdoms, a multipurpose dApp Tranquil Finance developed for the fantasy world Defiraverse, Curve, and Sushi. Harmony has its own cross-chain bridge Horizon that allows exchange of crypto assets between Ethereum, Binance Smart Chain and Harmony networks. There is also a beta version of a Harmony-Bitcoin bridge.
Harmony has numerous partnerships with various projects in the industry, the whole list can be found here. Some most notable partners include Chainlink, whose oracle service was integrated with Ethereum onto Harmony, and Matic which also allows for further interoperability between Harmony and Ethereum.
The Harmony team plans to focus on expanding the developer community and forging new partnerships. One of the team's main goals is to build a cross-chain ecosystem by bridging Bitcoin, Polkadot, Cosmos, and other popular blockchains.
Also, the team works on implementing zero-knowledge proof technology into blockchain. One of the already created products is ZkDAO, which will further increase decentralization by growing the validator community and putting network management in the hands of DAOs.
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Last updated: Aug 22, 2023
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