Since early February, Harmony (ONE) has risen 230%, and while its stake-proof smart contract platform benefited from Ethereum’s skyrocketing gas fees, the recent meteoric surge appears to have been driven by more fundamental factors.
Although other scaling-oriented solutions such as Cosmos (ATOM), Solana (SOL), NEAR and OMG also recovered over the same period, Harmony’s performance is striking.
Harmony is a sharding protocol with a trusted Ethereum bridge that divides the chain into segments that process transactions and store data in parallel. It is considered a Layer 2 solution as both the node and blockchain states are split into shards. This means that the network can be scaled linearly.
Each shard has 250 nodes to ensure cryptographic randomness. By using a consensus on practical Byzantine fault tolerance, the network maintains low transaction fees and final confirmation for a single block.
Harmony’s mainnet went live in June 2019 and currently offers staking and delegation mechanisms. Annual emission is capped at 3% while transaction fees are burned to keep inflation close to zero as network usage increases.
Compared to its peers, Harmony is still in its early stages with a market cap of $ 250 million. This pales in comparison to Cosmos, Solana, and NEAR Protocol, which have market caps at $ 5 billion, $ 2.2 billion and $ 1.26 billion, respectively.
Although its market cap may be small, Harmony already has 640 community-operated nodes. This is a strong indication that a takeover is taking place. While some competitors are struggling to develop functional decentralized finance (DeFi) applications, Harmony already has more than three.
This includes a cross-asset DEX, UnifyProtocol and a portfolio balance DApp called SeeSwap. Harmony also supports a DApp-based prediction market called SeeMarket and LMA, a non-fungible token art gallery.
Given the amazing DEX volume growth topping $ 14 billion, there seems to be plenty of room for scaling solutions that can execute DeFi trades.
Compatibility with Ethereum has brought more benefits
On February 4th, Harmony announced full compatibility with Ethereum after developers were able to port their applications ether.js or web3.js to Harmony. At this point, Metamask also became available for asset transactions on Harmony.
On February 5, Blits Labs announced a mainnet beta version of a cross-chain credit market between Harmony and Ethereum. The protocol allows users to secure their ether in order to take out a loan for Harmony.
On February 11th, Harmony announced a partnership with API3 to natively integrate the decentralized API or dAPI. This should provide reliable, transparent and decentralized data.
Further success depends on Harmony’s ambitious roadmap
Harmony’s roadmap includes bridging assets with the Bitcoin network and cross-chain communication. Decentralization is another area that is still underdeveloped as external validators need to become more relevant.
In terms of network security, plans include re-sharding to prevent single-shard attacks and Harmony plans to add “Fast Sync” capabilities to improve network performance.
While the roadmap is quite ambitious, the outlook for the project appears to be good, given recent shipments and the accelerated growth of the ecosystem.
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