Distinguished members of the Harmony family, my fellow travelers, I would like to start by saying “Merhaba” to all of you again. Today I decided to write on the development of the DEFI economy, which we often hear when talking about the mission or goal of the Harmony Blockchain Network. I want it to be a reference source, a kind of manual article, for those who, like me, have just known or want to get to know the Harmony project. I’m one of those who noticed the Harmony project too late. However, the wind of the project is blowing quite strongly. I came from the path of this wind. To understand the Harmony project, I joined telegram channels, started following its social media, and began researching what is undoubtedly the most comprehensive source medium articles. In the last few months, it has come to my attention that the team has focused on the DEFI economy, especially in various meetings, AMAs, and videos. Based on this, I concentrated my investigations on the DEFI.
What is DEFI?
DEFI is an acronym created from the words decentralized finance. A well-known proverb in Cryptocurrency circles says, “Not your keys, not your bitcoins.” The sentence sums up the problem in full. The main problem we all worry about as people who use digital money is that you don’t have the initiative to manage your digital assets in centralized exchanges because you don’t have the Private key to your digital money. Central to how secure your digital money is up to the work ethic of stockbrokers. You have heard many times that people’s digital money has been stolen, especially in exchanges that have been hacked by their former employees and have suffered millions of dollars in losses. I think the Central stock market concept itself is counterproductive to the spirit of blockchain. Blockchain value transfer is peer-to-peer value transfer. And it does not require an intermediary institution in transactions. However, it is necessary to ask how much difference the Central stock markets have from the intermediary banks in the financial world. Admittedly, it’s not that simple. Every new institution is the result of a need. Centralized exchanges are also the work of demand in the cryptocurrency market. The liquidity problem, the lack of technical software language of the users, the role of Centralized exchanges in the formation of trading value for exchange is undeniable. But the benefits, as well as the harms, are indisputable. In this case, it is also clear that it needs to be done — the development of Decentralized Finance and Dex exchanges.
DECENTRALIZED FINANCE (DEFI) AND HARMONY ONE:
To understand the Harmony core team’s approach to decentralized finance, let’s first look at the perspective that motivates the team. I can tell you that the most important source for your tips is the extended text of Stephen Tse’s keynote speech at Shanghai Blockchain Week.
Stephen Tse is taking people’s attention away from the “blockchain trilemma” problem and turning it to a new concept. Guadrilemma! Decentralization in Blockchain networks adds privacy to security and scalability problems. “I’d argue this pyramid will be one of the most important problems for our generation to solve in the coming decades: to understand what privacy means in terms of human rights, product design, and the digital economy. And, to build an open platform without sacrificing performance, without delegation to a central entity, and with provable security”.
Harmony’s basic motto became clear” to scale trust for billion of people and create a radical fair economy” before the introduction of this slogan, TGI Dreams met every week for two and a half years with the harmony community, which they call TGI Dreams. If you examine the members of the team that came together during the process of the Harmony core team, you will encounter a group of engineers, researchers, and scientists who have worked in large companies of a brilliant, international nature.
I strongly recommend that you read the full text of the article I mentioned above. In the process that follows this opening speech in which Harmony’s point of view is made public, I will present to you, in my opinion, essential events and written sources in as historical order as possible.
The Historical Process of Harmony DEFI economy:
1.The first to be examined in this process is the article “Introducing Harmony’s state of DEFI — part I: Ecosystem and Toolset” by the official authors of Harmony: Nikolaos Kostopoulos. In the paper published on September 28, we see that sub-headings for DEFI have started to be determined. Kostopoulos outlines DEFI goals as follows: “The key pillars of DEFI today are surrounded around investing, payments, borrowing, and lending — while Harmony is looking to unlock new domains that are currently overlooked by the major DEFI ecosystem including but not limited to insurance, benchmarking tools, inheritance, subscriptions, governance, clearing, commodities, and data monetization DAOs.
The toolset of DEFI ecosystem:
a- A robust blockchain network that is fast, reliable, and operates at a low transaction fee, which is crucial in financial transactions, especially in cross-country trade.
b- A non-speculative stablecoin in monetary payments, or digital values with high liquidity.
c- Smart contracts that decentralized applications (DApp) can use.
2. The tips we received in this article were discussed on the community Telegram channel with Harmony’s business developer Li Jiang at the AMA called Exploration of Open Finance, which was held on October 8.
“It is possible to summarize the essential topics in this AMA where the concept of Open Finance is discussed as follows “:
- Today the financial world is controlled by several large businesses. At Harmony, we want to establish the right of people to access loans, cross-border transactions, in short, financial transactions directly. Therefore, as an official partner, I would like to announce our cooperation with Carbon. With Carbon, transactions using Harmony DApps credit cards will become fast and easy.
- Another essential feature of our cooperation with Carbon is that we will cooperate in creating an FDIC-insured stablecoin.
- Other than stablecoins, it might be considered to develop non-fungible (NFG)token, i.e., ERC-721 Tokens, which we can discuss later. Using EVM in Harmony Network provides the infrastructure needed for ERC-721.
3. While research on Stablecoin and Non-Fungible tokens is ongoing, Kostopoulos’ article on October 21 draws our attention to the issue of liquidity. The article explains the results of Cryptobriefing’s HummingBot report and points out that the coins with the strongest liquidity are stablecoins.
4. They join the discussion on the creation of Stablecoin with a video they posted on Twitter on the Harmony one core team on November 7. Because there is a need for a non-speculative asset to be integrated into the existing system to use decentralized networks in financial transactions. The need to produce stablecoin for DEFI is clear.
5. And finally, on November 8, Nikolaos Kostopoulos’ excellent article, the key features of the Defi ecosystem, are shared with the blockchain world. In this article, Kostopoulos presents a summary of the research work carried out by Harmony collaborator Nicolas Burtey and draws on the road to the Harmony team’s efforts for the DEFI economy in the coming period.
In this paper, I tried to find various clues to a project process dedicated to rebuilding the financial framework of today’s world. We need to be conscious of how important Blockchain technology is to live in a freer society and a fairer economic order. Everything is for people.
“Harmony for One and All”
Harmony Community ID: ipek