Harmony blockchain project overview
Harmony is a first-level blockchain project with built-in sharding functions and the Effective Proof-of-Stake consensus algorithm.
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The story behind the project
The project was founded by Stephen Tse in 2018. Harmony was designed as a solution to the blockchain trilemma. A hybrid staking algorithm ensures decentralization, security, and scalability.
The blockchain was launched in 2019 and works with built-in cross-chain bridge technology that does not require additional trust checks. Four shards provide parallel processing of transactions, and the sharding technology distributes a load of user transactions among all validators.
You can easily and quickly transfer funds between Ethereum, BSC, Bitcoin, and other blockchain networks with Harmony
Investments and financing
Harmony closed 4 funding rounds, raising a total of $18 million. The key investors were AU21 Capital, Outliers Fund, Hashkey, and Consensus Capital Holdings.
On May 27, 2019, a public sale of the ONE token was held on the launchpad of the Binance crypto exchange, raising a total of $5 million.
Harmony's history of investments
The sharding and consensus mechanisms
As already mentioned, 4 shards divide the network into 4 parallel sections. Validation, transactions, and adding blocks are performed by each shard separately, and the load is distributed evenly. Thus, validators do not need to keep a complete blockchain copy; they are randomly assigned to level out centralization and avoid single shard attacks.
The maximum number of validators in the network is 250, but as the load on the network increases, this number can grow.
Effective Proof-of-Stake (EPoS) is more like the basic Proof-of-Stake algorithm. Users can delegate coins to validators, who connect their nodes to the network. But EPoS has a different reward system. If any validator adds a huge amount of coins within a single node, they will be penalized, and lower bidders will receive an increased reward. Thus, decentralization is achieved, which eliminates the possibility of major network failures.
ONE Cryptocurrency
The ONE token is used for transaction fees, staking, and Harmony governance. Every year, 441 million coins are issued by the blockchain. Transaction fees are burned to the point of zero inflation. In other words, they burn as many coins as they gave to the validators as a reward.
ONE is listed on KuCoin, Gate, Huobi, and many other reputable platforms. The complete list of trading platforms is available on the Coingecko and Coinmarketcap websites in the Markets section.
The market cap of the project is $226 million, and the market value of ONE token is $0.017.
Dynamics of the ONE token price (Coinmarketcap)
Development issues
Harmony is currently going through a bad patch. Validators often complain about the project management and its incompetence. The reason was also the hacking of the Harmony Horizon cross-chain bridge in 2022. Then the hacker managed to withdraw $100 million in various cryptocurrencies. This is even though Harmony is positioning itself as an “ecosystem for cross-chain finance.”
The developers proposed a plan to issue more ONE tokens to reimburse users impacted by the exploit. This caused a flurry of criticism in the cryptocurrency community and collapsed the rate of the native token.
Currently, the blockchain's further development depends entirely on solving the impending problem caused by last year's attack.
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