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About Harmony (ONE)

Foundational (“layer-1”) blockchains Bitcoin and Ethereum each have struggled to balance security and scalability priorities while remaining decentralized. Solving for the "trilemma" has spawned several competing, next-generation, layer-1 protocols. Among them is Harmony. ONE is Harmony's native coin.

Open-source, Proof-of-Stake (PoS), the Harmony blockchain seeks to run Ethereum applications faster and less expensively, part of a deluge of so-called “Ethereum killers” innovating in the field of interoperability.

The Harmony smart-contracts platform, as Indra Capital's Harman Puri said, is focused on creating a platform with seamless cross-chain capabilities. Harmony, per its website, views itself as an "Ethereum bridge,” in that decentralized applications (dApps) running on Ethereum can also easily be deployed on Harmony. Similar claims can be made by Near Protocol (NEAR) and Polygon (MATIC).

Like its rivals, Harmony is built around “sharding." A divide/conquer data partitioning approach, sharding protocol has been seized upon by blockchains looking to achieve more transactions per second by splitting data processing into separate pieces, Harmony said.

So Sharding speeds the chain up. ONE coins power it, performing several functions. These include serving as a means of rewarding stakeholders, paying transaction fees and facilitating governance.

Harmony is the brainchild of Stephen Tse, a cryptographic protocols expert who put his PhD to work at Microsoft, Google, and Apple. Tse launched Harmony in 2017 along with a dozen former Silicon Valley engineering cohorts. The blockchain went live in 2019. That spring saw an $18 million token sale to some strategic investors; then came an initial exchange offering (IEO) on the Binance Launchpad that resulted in an additional $5 million worth of tokens sold, Messari said.

According to analyst Mikhail Karkhalev, Harmony developers have a long-term plan to eventually increase transaction processing speed to 10 million TPS.

According to the Harmony white paper, the blockchain “will enable applications which were not previously feasible on blockchain, including high-volume decentralized exchanges, interactive fair games, Visa-scale payment systems, and Internet-of-Things transactions.”

Among the decentralized finance (DeFi) projects widening their footprint on Harmony of late are SushiSwap, a decentralized exchange (DEX) and, via a SushiSwap liquidity pool, algorithmic stablecoin Frax. Chainlink runs its price feeds on the Harmony testnet, The Defiant said. Harmony’s easy-to-get-to bridge to Ethereum has locked-in nearly $1 billion in ERC-20 token volume.

Harmony garnered a fair share of attention in the latter part of 2021 and in early 2022, CoinDesk said, highlighting the rise of DeFi Kingdom, a non-fungible token (NFT) project that’s attracted more than $740 million in locked crypto assets.

In September of 2021, Harmony launched a $300 million ecosystem fund to back startups working on applications and protocols. “We believe this is a special moment for builders to scale the impact of blockchain to billions of people,” Tse said at the time.

The current price of ONE

As of mid-January 2022, ONE was trading at about $0.34 having gained roughly 75% over the prior 30 days, a time when many large digital assets were losing value.

ONE hit an all-time high of about $0.38 in late October 2021. In March 2020, ONE was less than one penny. It has since risen 27,000%.

How the price of ONE is determined

Holders are said to enjoy straightforwardly deflationary tokenomics: annual issuance is set at 441 million ONE tokens, declining to zero over time.

All ONE tokens earned through transaction fees are burnt. High network usage should lead to zero token inflation, Messari said. Issue-and-burn tokenomics rewards a growing network by reducing inflation thereby increasing the intrinsic value of the ONE token.

What the bulls are saying

*According to WalletInvestor, ONE will rise from $0.34 to $0.55 in the next 12 months. That makes ONE an awesome investment. Predicted price for the end of 2027 is $1.57.

*Given the low gas fees and cross-chain capabilities, Harmony could become a great tool for NFT creators, The Motley Fool’s Bram Berkowitz said.

*TradingBeasts’ forecast ONE’s price to hit $0.40 by the start of 2023.

What the bears are saying

*At the moment, it appears better to hold off on investing in Harmony until sharding is put to the test, said CBTC Investments, on Quora.

*The project might remain in the shadow of more popular brands, as it has nothing principally new to offer, said.

*Even with incentives, it won’t be easy for new L1s to challenge Ethereum and the two other leading DeFi chains, Terra and Solana, Messari said.

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This article is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice and before taking any action you should consult your own advisors. Note that digital assets such as cryptocurrencies present unique risks for investors. Please see our disclaimer regarding risks specific to holding digital assets before investing.

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This content is correct as of February 2022.

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