Even though Ethereum is the DeFi hub of crypto, the transaction fees can prevent people from participating once the chain becomes congested. Ethereum scaling is a known issue which should be solved by Layer 2 solutions like Harmony One.
Since it is built on top of Ethereum, Harmony can benefit from the Layer 1 security while having more room for scaling and speed.
So far, Harmony One has managed to capture over $700M in crypto assets but it has also attracted some of the most popular dapps like Curve Finance, Sushi Swap and many others.
What Is Harmony One? #
As already mentioned, Harmony One is a Layer 2 chain built on top of Ethereum. It started out as a company in 2018 and got funded by venture capital funds including Consensus Capital, Hong Kong’s Lemniscap VC and others. In 2019 Harmony One launched an IDO on the Binance Launchpad and promised to deliver “decentralization at scale”.
ONE is the governance token of the Harmony One blockchain and it can be used for staking, earning rewards, or covering gas fees. Harmony achieves speed and scalability through random state sharding which allows the blockchain to divide the database into smaller components called shards. This allows Harmony One to have almost instant finality times without congesting the chain.
The Goal Of Harmony One #
High network fees on Ethereum will remain an issue for the foreseeable future. Without Layer 2 solutions like Harmony One users wouldn’t be able to enjoy the full benefits of a fast and secure blockchain and that is the exact problem Harmony is trying to solve.
EVM compatibility allows developers to deploy their Ethereum-based decentralized applications on Harmony with minimal effort but it also gives users the same user experience. In short, Harmony can be viewed as a bridge between scalability and decentralization on Ethereum.
How Does Harmony One Work? #
The ONE token is at the center of Harmony’s governance model. Through an adaptive version of the proof-of-stake (PoS) governance model, delegators can earn rewards by delegating their staked tokens to network validators. On top of that, sharding helps increase network speed by splitting the database into many smaller fragments
All of this creates an environment where communication costs are minimal and by utilizing aggregate signatures 250 or more validators can reach a consensus in less than two seconds.
Unlike many other networks, Harmony One can process transactions in parallel thanks to the Fast Byzantine Fault Tolerance (FBFT) consensus algorithm.
Conclusion #
Harmony One is surely a network that can give users the freedom to use blockchain technology with no restrictions. Speed and scalability are very important, but Harmony can also offer security because it is an Ethereum L2.
Lastly, with EVM compatibility, Harmony can stay competitive in both the DeFi and NFT landscape because developers can easily re-deploy their Ethereum-based dapps while their users can have the same experience with almost no transaction fees.
References:
Consensus – Harmony. (n.d.). Consensus – Harmony. Retrieved March 9, 2022, from https://docs.harmony.one/home/general/technology/consensus
