2022 Harmony Technical Review
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December 16th, 2022

Harmony Protocol is a next-generation sharding blockchain protocol that promises scalability, security, and decentralization. This Harmony Protocol technical review will look at the protocol’s key features and how it works. We’ll also assess the potential of Harmony Protocol to become a significant player in the blockchain space.

Introducing Harmony - a new way to interact with the blockchain

Harmony Protocol is a new and revolutionary way to interact with the blockchain. Harmony seeks to bring the blockchain closer to everyday users by combining several existing components. This protocol enables users to seamlessly interact with decentralized applications (dApps), making it easier for people to connect and understand the technology behind dApp. Harmony’s platform works by connecting users through distributed ledgers that are both secure and safe. Its innovative technology creates a frictionless connection between fiat currencies and multiple blockchains, allowing its users to move funds quickly, securely, and safely across borders.

In conclusion, Harmony Protocol stands out from the rest of the pack by introducing a new way for users to interact easily with their decentralized applications. This solution brings more people closer to the blockchain world.

How Harmony works

Built with sharding technology at its core, the Harmony Protocol leverages sharding to create an ultra-scalable decentralized consensus platform. It enables shard-level parallelization of data and processing within a single distributed ledger, significantly increasing transaction throughput and reducing the latency associated with large decentralized applications. This sharding also allows cross-shard communications, which is essential for scalability in cross-blockchain transactions. Furthermore, sharding provides privacy by hiding information on a shard to shield the balance of each user’s account so only the shard validators see it; this privacy feature can help protect against malicious attacks during transactions. Finally, its sharding technology helps keep energy costs down by reducing computational load as nodes don’t need to receive and process blocks from multiple ledgers but rather only from their local shard group. All these features together make up Harmony Protocol’s key differentiating points from other consensus platforms and enable it to provide fast and secure solutions for large-scale distributed applications.

The benefits of using Harmony

Harmony Protocol is an open-source blockchain platform built for scalability and performance. With its advanced sharding structure, the protocol can support hundreds of transactions per second with low latency levels and minimal fees. By allowing developers to create customized smart contracts and decentralized applications, Harmony Protocol’s ecosystem provides businesses with a powerful tool to accelerate their e-commerce operations. Moreover, the technology behind Harmony Protocol allows it to securely handle large amounts of data on its distributed ledger, making it ideal for companies that process vast quantities of information. Additionally, the protocol’s consensus algorithm ensures both robustness and security, so developers can have confidence that their products are protected from malicious actors. By providing users with a reliable, secure platform to power their trading operations, Harmony Protocol has become an invaluable resource for leveraging the advantages of blockchain technology in today’s digital economy.

A detailed look at the technical aspects of Harmony

The Harmony Protocol is a sharded blockchain protocol that enables sustainable scalability and economic balance. It consists of sharding, cross-shard communication, and an innovative proof of stake consensus algorithm to guarantee secure decentralization. The sharded structure of the Harmony Protocol divides the whole network into partitions called shards. This helps alleviate congestion issues on the blockchain by distributing different transactions across different shards. Each shard can process transactions independently from other shards, increasing overall efficiency and throughput for the network.

Additionally, cross-shard communication allows accounts to be sharded across multiple shards, enabling users to migrate flexibly to different shards depending on their usage patterns. With this setup, new accounts are automatically sharded in such a way as to optimize shard load and minimize shard reorgs. Finally, the consensus algorithm uses a novel approach based on verifiable random functions (VRF) and proof of stake (PoS) to secure the system while quantifying incentives to maintain truthful blockchains across all shards. This combination leads to a secure blockchain platform with increased scalability and stability compared to traditional protocols. All these features make the Harmony Protocol an attractive solution for developers looking for a secure decentralized platform for their projects.

Effective Proof-of Stake

Harmony consensus algorithm, Effective Proof-of Stake (EPoS), uses the concept of stake-weighted voting to ensure secure decentralization. The protocol rewards validators in proportion to their effective stake, which is calculated using a formula that takes into account both the actual and median stakes held by each validator. This allows for stakeholders with smaller amounts of stake to still have an influence in the network while still receiving rewards proportional to their contributions. Additionally, EPoS has a slashing mechanism designed to punish malicious actors who fail to remain honest, further increasing security within the system.

All these features together make up Harmony Protocol’s key differentiating points from other consensus platforms and enable it to provide fast and secure solutions for large-scale distributed applications. By leveraging the speed and security of its sharded blockchain, developers can create powerful e-commerce solutions that are able to handle large amounts of data while providing users with low latency levels and minimal fees. With this combination of scalability, security, and economic balance, Harmony is poised to become an invaluable tool for businesses looking to leverage the advantages of blockchain technology in today’s digital economy.

By providing users with a reliable, secure platform to power their trading operations, Harmony Protocol has become an invaluable resource for leveraging the advantages of blockchain technology in today’s digital economy. It provides developers with an efficient way to create customized smart contracts and decentralized applications that can be used for scaling up business operations quickly and securely.

State Sharding

State sharding in Harmony is designed to ensure that validator keys and transactions are separated cleanly into different shards. Specifically, the account address space (including smart contract addresses) is not segregated across multiple shards; a single address can store its associated state data on one or more shards. This allows users to benefit from the flexibility of using different shards with the same single address.

Harmony’s sharding protocol also provides additional advantages in terms of scalability, security, and interoperability. Delegating certain transactions and operations to specific shards makes parallel processing possible, reducing latency for performance-sensitive applications. The separation of data also enables shared computational resources such as memory and CPU time.

Beacon Chain

The beacon chain is responsible for maintaining the network’s consensus, allowing nodes in the shard chains to agree on which transactions have been accepted into a block. It also coordinates the migration between epochs, ensuring that all shards are running in sync and that blocks are produced regularly.

Harmony utilizes an efficient epoch-based system to synchronize its beacon and shard chains: every 2^15 blocks (approximately 18 hours), a new epoch begins, with the beacon chain migrating first to start the process. The signal from the beacon chain then triggers the shard chains to migrate, allowing them to stay synchronized with one another. This ensures that transactions can be processed quickly and securely across all shards.

By leveraging the combined power of its beacon and shard chains, Harmony is able to provide unparalleled transaction speeds and security for its users. This system enables a reliable and secure consensus protocol without sacrificing decentralization or scalability.

Crosslinks

Crosslinks are a critical component of the Harmony Protocol, enabling secure communication between the beacon and shard chains. Crosslinks contain information about each shard at any given time, including its signing information and block reward distributions. This allows the beacon chain to verify that all transactions within a given shard have been accurately accounted for, and it also allows for a secure block reward distribution to be calculated. The crosslinks are sent from the shards to the beacon chain and serve as an essential data point in maintaining the network’s overall security. Block rewards allocations will stop without successful delivery of crosslinks, making them necessary to stakers within sharding networks.

Crosslinks play a pivotal role in ensuring that data is securely shared between shards, enabling secure and efficient communication. By leveraging this technology, Harmony aims to provide users with a high-performance Sharding platform that can scale while remaining secure. The Crosslinks help make this possible by ensuring that all transactions are accounted for and that stakers are rewarded appropriately. With this system in place, the Harmony Protocol is well-positioned to provide users with a secure Sharding experience.

Validator BLS Key Assignment:

In Harmony EPoS, the validators’ BLS key is the minimum accounting unit assigned to different shards. Currently, the validator BLS keys are deterministically assigned to shards based on the modulus of the raw byte data of the key. By assigning validator BLS keys in this manner, the network is able to ensure that a single validator entity with multiple BLS keys can be assigned to various shards. Eventually, as the Harmony Protocol matures and supports resharding, the assignment of these keys should become more sophisticated and rely on an on-chain random process for even better security and performance.

Epochs

Epochs on Harmony are the pre-determined periods of time when the validator committees for each shard stay unchanged. In Harmony mainnet, one epoch is 32768 blocks which translates to around 18.2 hours. In Harmony testnet, one epoch is 8192 blocks which is around 4.6 hours. When one epoch ends, the election for the new validator committees will be conducted in beacon chain and the result (i.e. shard state) will be written in the last block of the epoch in the beacon chain. After that, beacon chain enters the new epoch with the new validator committee producing blocks. Once beacon chains finishes its transition into a new epoch, all shards are able to move on and begin making blocks according to their respective committee. This ensures that all blocks in the network are securely signed and able to be seen by other shards, ensuring a smooth transition between epochs.

By leveraging the combined power of its beacon and shard chains, Harmony is able to provide unparalleled transaction speeds and security for its users. The crosslinks ensure secure communication between the beacon and shard chains, while validator BLS key assignments help maintain an even distribution of keys across multiple shards. With this system in place, Harmony's Epochs keep everything running smoothly so users can enjoy a secure, high-performance Sharding experience.

Resharding

Resharding is a technique that allows the Harmony Sharding network to dynamically change the number of shards and adjust the assignment of validator BLS keys between them. This process can be complex and involves several stages, including creating new shards, migrating data from old shards, redistributing validator BLS keys between shards, and finally, updating the consensus rules. To ensure a smooth and secure transition, Harmony will use several strategies to perform resharding, including the RapidChain Protocol developed by CommonPrefix. The protocol leverages distributed sampling techniques to balance the load when redistributing validator BLS keys between shards while providing proof-of-stake rewards for participating in the resharding process. With these strategies, Harmony aims to provide users with a secure Sharding experience that is both performant and reliable.

Resharding will be essential for the ongoing growth and scalability of the Harmony Sharding network, as it allows more shards to be added as needed while ensuring that validator BLS keys are evenly distributed and secure. Ultimately, the design of this process will be critical in determining how efficiently Harmony is able to scale and adapt as it grows. The current proposal from CommonPrefix provides an excellent starting point, but further research and development will be necessary to ensure that resharding works flawlessly for the network.

Resharding constraints to consider are:

The shuffling process should be done carefully and thoughtfully, as it can have an impact on network performance. The validators need to stay active during the shuffling process, so the time allotted for resharding needs to be reasonable enough that validators can maintain their uptime without interruption. Furthermore, The shuffling process shouldn’t happen to too many validators simultaneously since we need to have enough validators online to produce new blocks. Additionally, since there is always a risk of malicious actors trying to manipulate the network, it is crucial to consider measures such as rate-limiting and anti-spam protections when designing resharding strategies.

After the new election result (i.e., resharding result) is revealed until the validators are supposed to sign in the new shard, there should be enough time allocated for validators to move between shards, and their signatures should be optional during this time. Due to the state synchronization process, it takes time for validators to switch to a new shard. The time allocated should depend on the sync time for a new shard. Cross-shard communication and coordination protocols are also needed to synchronize the states of validators across two shards and ensure that transactions going from one shard to another can be executed smoothly.

In order to achieve secure sharding, it is essential that the resharding process is designed carefully to ensure that validator BLS keys are shuffled in a secure and reliable manner. Harmony Sharding will rely on strategies such as the RapidChain Protocol to guarantee a secure Sharding experience, and developers must consider all potential constraints outlined above when designing their Sharding process. With the right design and a robust Sharding network, Harmony Sharding will be able to provide users with an efficient and secure Sharding experience that scales as the network grows.

The DRG process and the VDF primitive process are difficult to implement; therefore, we can rely on the VRF that is already present in mainnet for our resharding process. This will provide enough security as it is sufficient for the resharding process. Additionally, we should include measures such as rate-limiting and anti-spam protections to protect against malicious actors. One example of what a malicious actor could do if measures such as rate-limiting and anti-spam protections are not developed on a blockchain is a "spam attack." This is where the malicious actor sends a large number of transactions to the blockchain in a short period of time with the goal of overwhelming the network and making it difficult for legitimate transactions to be processed. This can cause delays and disruptions for users of the blockchain, and may even lead to the network becoming unusable. In some cases, a spam attack can also result in financial losses for users of the blockchain if their transactions are not processed in time. It is important for blockchain developers to implement measures such as rate-limiting and anti-spam protections to prevent this type of attack from occurring.

 Shuffling the validator BLS keys must also be done in a careful manner, as this can have an impact on network performance. Cross-shard communication protocols and state synchronization processes are also essential for resharding so that transactions between shards can be executed smoothly. With the right design, sharding can provide users with an efficient and secure Sharding experience.

It is important to note that resharding in a Proof-of-Stake network requires careful consideration of security, scalability, and performance. The original design of resharding proposed in the whitepaper may be a good starting point, but further research and development will be necessary to ensure that resharding works flawlessly for the network.

State Sync

Harmony’s mainnet currently relies on DNS servers to serve as a centralized endpoint for all nodes to synchronize with the entire blockchain. However, this setup is not optimal and is limited in sync speed. Harmony Sharding will utilize Sharding-aware State Sync protocols tailored to provide faster and more efficient synchronization between shards to improve the state synchronization process. With Sharding-aware State Sync protocols, sharding can provide a better experience for users by reducing the time it takes to sync with the network.

The speeds at which these transactions sync depends on the number of transactions and the complexity (gas used) of those transactions. According to our testing, it takes approximately 400ms to process a block with tens of transactions (20-50). This is significantly faster than what legacy DNS Sync offers and provides Sharding users with a more efficient experience. Sharding also adds a layer of security as Sharding-aware State Sync protocols use authentication mechanisms such as BLS Signatures to authenticate the transactions and prevent malicious actors from taking over a shard. Sharding also allows node operators to choose which shards they want to sync with, allowing for more decentralized control of the network.

On-chain features

Verifiable Random Function (VRF)

The Harmony VRF is a crucial component of sharding and is used to generate randomness for resharding events securely. Harmony has one of the few on-chain natively built VRF solutions that provide developers with easy and free access to secure randomness. Sharding users can also use VRF for their applications, such as implementing true randomness in a lottery or dice game.

Lastly, sharding will utilize VDFs to generate a secure source of randomness. VDFs are similar to VRFs but provide a higher security level and better performance on large networks. Sharding users can take advantage of the VDFs to generate randomness for their applications.

Staking Precompile

Harmony supports staking at the smart contract level, allowing developers and stakers to interact with the network in a secure, on-chain fashion. Launching the precompiled staking smart contract on Harmony’s EVM allows users to delegate, undelegate, and collect rewards through smart contracts. This opens up new opportunities for developers to build applications that take advantage of sharding’s rewards system, such as automated staking pools or yield optimization services. Sharding users can also benefit from the added security provided by having their funds stored in smart contracts.

One benefit of staking via smart contracts is that they enable higher levels of programmability and flexibility. For example, developers can create custom reward schemes for their staking pools or customize the logic to decide how block rewards are distributed among delegators. This is made possible by Harmony’s support for on-chain code execution. With this level of control, developers can build trustless staking derivative products, which unlocks the liquidity of the 4.4 billion staked ONE tokens. This will significantly boost the liquidity of Harmony’s Defi ecosystem and bring more yields to the ONE token stakers.

Tokenomics

The design of the Harmony tokenomics model is centered around the ONE token. This token is used for a variety of different purposes, such as paying transaction fees, staking to earn rewards, voting and governance, and being a medium of value storing and exchange on the Harmony Sharding network.

The total supply of ONE tokens is capped at 441 million. The issuance rate of the tokens is 25% of the total supply per year, meaning that an additional 111 million tokens are issued annually. Currently, all transaction fees collected by Sharding nodes are burnt. However, this will soon change as sharding introduces a new feature where fees will be used for ecosystem development. This will make ONE token more useful and valuable in the long term.

Sharding also introduces a new staking precompile that can be used for executing on-chain cryptoeconomics experiments and tokenomic models, such as sharding’s proposed Fee Burning model. This will further incentivise Sharding users to use ONE tokens and make sharding more attractive to potential users. Finally, sharding also introduces a new Sharding-specificVRF feature that can be used for sharding’s proposed Proof-of-Stake protocol. This will ensure the security of sharding and make it more attractive to potential stakers.

In conclusion, sharding is an important development for Harmony as it provides users with faster, cheaper, and more secure transactions. Sharding also provides a variety of on-chain features, such as Sharding-aware State Sync protocols, staking precompiles, and VRF, that make sharding more attractive to potential users and provide more utility for the ONE token.

Caching

Extensive caches are added across the node client, including intermediary compute results, database R/W, RPC results, etc. However, some caches may be too extensive and use excessive memory. As such, it is vital to properly profile and fine-tune them to find the optimal balance between performance gains and memory usage. The Harmony team has done profiling on caches that are widely deployed in their network and have found ways to reduce their impact on node’s memory by using a combination of different techniques such as caching strategies, eviction policies, and other optimizations. By applying these techniques, developers can ensure that the Harmony network runs efficiently with minimal memory usage. Additionally, Harmony provides several caching APIs for developers to integrate into their applications for faster access times. This makes sharding more attractive for users that need secured transactions and low-latency access to data.

Harmony’s caching strategy helps make sharding more efficient while reducing its impact on node client memory. With proper profiling and fine-tuning of caches, the network can continue to run efficiently with minimal memory usage, providing users with faster and cheaper transactions. Furthermore, the caching APIs provided by Harmony allow developers to quickly integrate cache into their applications for more immediate access times. All in all, Harmony’s caching strategy is important in ensuring that sharding runs smoothly and efficiently.

Disk Storage

A node in shard 0 typically uses around 2TB of disk storage. After analysis, it was found that only 200GB of this is for chain state data, with the rest being comprised of history block data, off-chain data or indexes, etc. Archival nodes, on the other hand, use an order of magnitude more than a normal node due to having to store all the state data changes in its entire history. Our staking implementation requires that all data related to a validator be stored as one single state data blob, meaning any changes made to any part have to be reflected on the whole state blob– resulting in a much larger footprint for archival nodes. In addition, we distribute block rewards to NE token stakers.

Harmony’s disk storage strategy is crucial to ensuring a successful Sharding network. Harmony’s disk storage strategy ensures that sharding runs smoothly and efficiently. Optimizing the chain state data ensures that archival nodes can store all of their data without using too much disk storage. Furthermore, incentivizing NE token stakers with block rewards makes the token more useful and valuable in the long term.

Account Abstraction

Only External Owned Accounts (EOA) can send transactions and interact with the blockchain. This is due to the fact that the state of the blockchain, hence the state of an account, can only be modified through transactions, and this trigger must come from something external to the blockchain. On Ethereum, every transaction must be initiated from an EOA, and the corresponding account must pay a fee to the miner for the execution of the entire transaction. This limitation is overcome with Account Abstraction, which will allow users to interact with contracts using non-EOAs and help reduce the cost associated with contract calls.

Harmony’s Account Abstraction helps make sharding more attractive to potential users and provides them with more opportunities to use their tokens. By allowing users to interact with contracts using non-EOAs, they can reduce the cost associated with contract calls while still having access to all of the benefits that come from blockchain technology. Additionally, this opens up new possibilities in terms of on-chain features as well, such as Sharding-aware State Sync protocols, staking pre-compile contract, and more. All in all, Account Abstraction is an important component of Harmony’s Sharding network that enables users to access features they would otherwise be unable to.

Harmony Domains

Harmony recently acquired the .country top-level domain (TLD). This allows Harmony to bridge Domain Name Service (DNS) and Ethereum Name Service (ENS), making it easier for users to interact with the blockchain. This will also be able to cross over Web2 and Web3, bringing together all of your identities and activities in one place.

Harmony Domains are an important element of Harmony’s Sharding network, as it will make it much easier for users to interact with the blockchain. By bridging DNS and ENS, users can more easily access their wallets, view transactions, and find dApps on the network. Furthermore, by bringing together all of your identities and activities from Web2 and Web3 in one place, users will be able to access all of their accounts on the blockchain with one simple click. Finally, Harmony Domains will allow developers to easily create custom domains for their dApps and services. This makes it much easier for developers to make their projects more accessible and user-friendly.

Ethereum vs. Harmony codebase

Ethereum and Harmony both have their own strengths and weaknesses, but overall Harmony offers users a better and easier to use platform. With its newer codebase, advanced features, optimized strategies, and attractive Sharding network, Harmony has the potential to take the lead in blockchain technology in years to come. ‌‌‌‌All of these elements come together to create an efficient Sharding network that is attractive to users and developers alike, ensuring a bright future for the blockchain. ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ 

Harmony provides users with an efficient way to access all of the benefits that come from blockchain technology. As such, it is likely that Harmony will become a more attractive platform for users looking to take advantage of the potential of blockchain technology in years to come. ‌‌‌‌ ‌

Why you should start using Harmony today

Now is the perfect time to take advantage of Harmony’s decentralized, secure and low-cost blockchain protocol. With its innovative technology, you’ll be able to participate in a wide range of cutting-edge projects that are changing how businesses operate on the web. Among other things, Harmony offers secure authentication through sharding, enhanced scalability with state channel solutions, superior privacy with zero knowledge proofs, and fast confirmations with advanced consensus algorithms. Whether powering secure markets and payment systems or driving major enterprise-level initiatives, Harmony Protocol provides unrivaled utility for modern applications. Thanks to its open-source capabilities, developers have access to an abundance of tools that make it easy to build applications on top of the platform. This high level of customization makes it simple for organizations to tailor their projects for specific use cases. So if scalability, security, and cost concerns have been holding you back from using blockchain solutions until now - look no further than Harmony Protocol - start leveraging today!

The Harmony Protocol is a new way to interact with the blockchain that offers several advantages over existing protocols. These include improved security, scalability, and speed. The technical aspects of the Harmony Protocol are also awe-inspiring. It is based on an innovative technique called “sharding,” which allows it to process transactions much faster than other protocols. If you are looking for a more secure and efficient way to interact with the blockchain, you should start using the Harmony Protocol today. Review the technical documents and contribute to the open-source development for more information about this exciting new protocol.

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