Coin Spotlight
16 Jan 2022

Harmony (ONE) in Spotlight

Deepan Datta

In the current scenario, single-chain blockchain platforms like Ethereum, Binance, Solana, Cardano, etc., are primarily driving the crypto market. But, they can become a huge road blocker in the growth of the decentralised ecosystem because of their restricted scalability or cross-chain functionality. 

To enable a truly decentralised ecosystem, blockchain networks should be able to instantly scale up in terms of transaction processing. And, it should allow DApps to interact with DApps built on other blockchain networks. 

This is where Harmony comes into play. Harmony is an open and fast blockchain that provides instant scalability and allows cross-chain asset transfers on existing blockchains. 

Its native token ONE has been one of the top-performing cryptos, moving up from $0.0058 (₹0.4571) to reaching a peak of $0.3798 (₹29.6244) in the last 12 months—price growth of over 7500% 

Key Coin Metrics

  • Coin Rank: #38
  • Coin Market capitalisation (as of 14th Jan 2022): $4.2 billion
  • Coin Market Dominance: 0.21%
  • Coin Economics: Inflationary- no fixed supply
  • Coin Inflation Rate: 3%- annual issuance of tokens is capped at 441 million units
  • Coin Circulating Supply: 11.58 billion ONE

Technical Analysis: ONE Price Prediction

Harmony
source: tradingview.com

On the daily chart of ONE/USD, we can see there is a presence of a strong upside trend. The formation of cup and handle pattern, followed by a breakout and a bounce after testing the 200 days EMA line (blue line) for support indicates strength in the market.

Currently, it facing resistance close to its all-time high level of $0.3798 (₹29.6244) and in event of a breakout, it might propel ONE to a much higher price point. The 50 day EMA line is offering strong support, followed by $0.2566 (₹20.27). 

RSI is indicating an overbought position, which indicates a short term weakness, so keep a close watch around the key levels.

A Brief About Harmony 

Harmony is a layer-2 interoperable blockchain network hosted on Ethereum that aims to resolve the current limitations of Ethereum- lack of scalability and interoperability. 

It offers tools and functionalities for creating and running DApps on the Ethereum blockchain- with maximum scalability and interoperability through sharding. Through this process, Harmony’s mainnet can process transactions on the Ethereum network with 2-second transaction finality and with up to 1000 times lower GAS fees. 

Sharding is a data partitioning technique in which a transaction processing computational workload and storage is distributed out across the P2P network, thereby increasing the scalability of the blockchain network. It is considered a more effective scaling solution than other Ethereum layer 2 scaling solutions like ZK rolls up and Optimistic.

Harmony’s cross-chain interoperability is another feature that distinguishes it from other layer-2 scaling solution providers. Its secure bridges enable the transfer of assets between two different blockchain protocols, and the bridges can connect to any proof-of-work and proof-of-stake chains. 

Through cross-chain functionalities, it opens up the NFT marketplace, where creators can transfer digital collectables to other blockchain networks. Harmony is also working on the development of concepts like NFT lending, NFT verification, and rationalisation.

Coin Economics of ONE Token

ONE is the utility token of the Harmony network, which is used for staking, to secure the network, to pay the GAS fee for various transactions on the platform, and for voting rights.

It is an inflationary token, and the current circulation of ONE is currently over 11 billion tokens in the market. The annual issuance of tokens is capped at 441 million ONE (3% annual inflation rate over the long term). 

To reduce the overall inflation rate of ONE token, Harmony follows two-pronged approaches. First, it burns all the ONE tokens collected in transaction fees. Second, it penalises validators for any malicious activity by seizing their staked tokens. Half of every seized token is burned and taken out from the circulating supply. 

The burning of tokens offsets the rate of issuance of new tokens in the market, naturally leading to zero inflation when the network usage takes off. 

Harmony Future Growth Potential

Harmony has set its foot in the right direction by creating an ecosystem that enables faster transactions at a lower price and focusing on DApps hosted on Ethereum. A key to ensuring the unhindered growth of the DeFi ecosystem.

Now, look at the list of DApps listed on the Harmony platform. There are currently 34 Dapps listed with a total value locked (TVL) at over 5 billion ONE tokens, worth over $1.8 billion. 

Harmony
source: defillama.com

Over the last one year, the total TVL in the platform has witnessed exponential growth. 

With some of the coolest dApps listed on the platform, like the DeFi Kingdoms, Sushi Swap, Tranquil Finance, Multichain, etc., they are driving the growth of Harmony. And, in comings days, the platform will witness more launches, showcasing its solid growth potential. 

Harmony’s highly scalable network feature at a very low transaction cost is the biggest USP for projects getting launched on its network. 

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

writer

Deepan Datta

Content Writer

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