Apple, Amazon Alums Behind Sharding Startup Raise $18 Million

Harmony, a "deep sharding" startup that hopes to one day help you turn your data into income, has raised $18 million in a token presale.

AccessTimeIconApr 2, 2019 at 12:30 p.m. UTC
Updated Sep 13, 2021 at 9:02 a.m. UTC

Bucking the 2019 trend of fundraising on equity, one startup has completed a substantial token presale.

announced Tuesday that it raised $18 million from an array of investors that includes Hong Kong's Lemniscap VC, Australia's BCA Fund, Singapore's UniValues Associates and Silicon Valley's Consensus Capital, among others.

Co-founder Nick White told CoinDesk that selling tokens was the only path that made sense, because "our long-term vision is to create a decentralized protocol."

The Harmony blockchain will launch with a pre-mine of 12.6 billion tokens. Investors have purchased slightly more than 2.8 billion of these tokens in this sale. The startup is considering ways of using some of the remaining pre-mined tokens to incentivize early adopters of the network, including distributions to those who participate as nodes.

Upon launch, proof-of-stake nodes on the network will be compensated with an as-yet-undetermined rate of inflation, which should gradually decrease over time (like bitcoin), though there is no pre-determined maximum supply (unlike bitcoin).

White said that the large number of investors spread around the world should help the blockchain to win adoption. Additionally, many of these investors have backed existing decentralized applications (dapps). "That's where it becomes more interesting," White said.

Chain swapping

The Harmony chain is purpose-built to make porting dapps over from ethereum, in particular, quite easy.

So if a dapp has traction but is running into friction with confirmation times or gas fees on ethereum, teams might find they can give users a superior experience by running their dapps on Harmony.

By having investors who have backed these dapps, Harmony believes it can help persuade companies to port their operations to the new chain.

"Harmony's core architecture and approach are the right ones to scale blockchain protocol (state sharding and peer to peer networking)," Maximilian Thyssen, an angel investor who joined the Harmony round, told CoinDesk in an email. "Innovation in centralized systems is slowed down and bottlenecked by massive incumbents like Google/Facebook."

The goal is much larger than that, though, according to Harmony.

The company wants to get all personal data moved onto a decentralized protocol so that people can start earning money from the data they generate, as a sort of universal basic income. Though White acknowledged that vision is a long way – probably decades – off.

"When we start to attract a meaningful number of users, you kind of create a new data economy," White said. "And that, in the end, is what enables data as an income."

The team includes alums from Web 2.0 giants like Google and Amazon, companies that have made great advantage of people's data on the internet. For example, Harmony's founder and CEO Stephen Tse has spent time at Apple, Microsoft and Google – so the implications of this information-democratizing vision are not lost on Harmony's founders.

White said:

"The companies our team came from, they monopolize all this, and they extract a lot of the value that maybe users should be getting."

Finding community

Obviously, to create universal basic income from data, Harmony needs to get everyone on its blockchain. Adoption is always the heaviest lift.

To that end, the company plans to get every dapp with traction on ethereum onto Harmony almost as soon as the chain launches, White said.

The protocol is built to be compatible with the ethereum virtual machine, and because those smart contracts are open source, White says Harmony is able to make porting "practically frictionless."

"We could take MakerDAO and copy it and play around with it," White said, for example.

This also means Harmony can copy over the developer tools that have been made for ethereum.

Another traditional approach to scaling crypto adoption has been getting tokens into the hands of regular people – typically in the form of an initial coin offering (ICO).

"We've actually been kind of stymied about the regulations around doing public sales," White said. "Being a U.S. company, we are trying to be very compliant."

That said, the company is considering an initial exchange offering (IEO), where a token first appears on an exchange and is sold to supporters there. Harmony is currently in talks with multiple major exchanges about the terms for such a deal.

Deep sharding

Harmony touts incorporating many well-established technologies proven at major tech companies, but the central insight of the protocol is what the company calls "deep sharding."

Sharding is familiar to followers of proof-of-stake technology, most notably as an eventual path to ethereum scaling. However, Harmony puts every kind of calculation onto different shards, which is why it calls it "deep sharding." It creates shards for everything a blockchain does.

"It's about doing all the things you need to do in a blockchain," White said, rattling off examples like verifying, routing, communicating and storing, "and parallelizing each of that into subnetworks."

By optimizing for bandwidth, he said, Harmony is able to increase its throughput in a way that other blockchains have neglected. Another startup, BloXroute Labs, has made a similar argument.

Speaking to Harmony's long-term vision, White said:

"We are building a scalable, high-throughput, low-cost, fast-finality blockchain."

Harmony staffers image courtesy of Harmony


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