Decentralization is one of the key attributes of the blockchain. In terms of all the underlying technologies, both permissionless and openness can be achieved in web2 world to some extent. However, decentralization is the definitive differentiator of web3 from the web2 world.

*Written by Leo Chen. (To be) Approved by Rongjian Lan, Giv Parvaneh and Jack Chan.

Decentralization means there is no single point of failure, there is no centralized authority of the access of the blockchain, and there is no single organization to control or manage the entire ecosystem. It is exemplified by the decentralized protocol, permissionless access, and DAOs that govern the blockchain ecosystem.

Bitcoin as the 1st blockchain invented by the pseudonymous Satoshi Nakamoto. It reached the highest level of decentralization by more and more miners and token holders. With the leave of Satoshi, there is no creator of the network anymore.

Ethereum, as the most popular smart contract platform, has exhibited strong decentralization and autonomous governance by the Ethereum foundation, permissionless dApps, service providers, numerous DAOs, and even the chaotic development roadmap. Like a Bazaar, the high level of decentralization and autonomous organization provide Ethereum ecosystem the power to thrive, in a chaotic and unorganized way.

Decentralization is not the solution of everything, but it is a natural reflection of the entire human society in a modern era. It is the essential vitality of the ecosystem.

Harmony, as a scalable layer one blockchain protocol, was initially developed by the project team with the support by the Harmony foundation. The project team played a centralized role initially to develop the protocol, develop the infrastructure and service. Eventually, the project team shall fade into the community, and fully decentralize the entire ecosystem.

Since the beginning of Harmony protocol, we have aimed to be on the idealistic and radically fair decentralized protocol. Even though we have touted high performance, low latency as the platform feature, we have never stopped the path to the fully decentralized platform. Our mainnet v1 was launched in 2019 with more than 50 foundation node runners to bootstrap the network. With the release of mainnet v2, we become a fully open, and permissionless platform at the network level. Anyone can apply to be a validator, and anyone can delegate the tokens to any validators. Our staking model, EPOS, was designed to encourage and incentive small validators to join the consensus. We have established a mature validator community and validator DAO since 2021. Many DAOs have been setup and growing in the ecosystem. Some of them have gained confidence from the community and continuously perform well, including developer DAO, ambassador DAO, community DAO, ZK DAO, and so on. As an ecosystem, Harmony has grown from a burgeoning platform to a more mature, and diversified ecosystem.

In this document, we not only reviewed the status quo of the decentralization in Harmony, we also layout the most important three pillars of the decentralization for the ecosystem and set the roadmap to reach the endgame of full decentralization.

There are three key pillars of the decentralization. Each pillar impacts different aspect of the ecosystem, from the protocol design and implementation, to the service infrastructure and applications, to the staking model and governance structure. Each pillar plays a different role in the entire ecosystem.

The network protocol is the foundation of the blockchain ecosystem. Decentralization at the network protocol level implies permissionless network access, open participation of the validators/miners, randomness of the block proposers, fair voting and incentive process. While we need to find the balance to ensure the security, decentralization, and performance, Harmony designed the FBFT consensus algorithm with the implementation of the view change algorithm.

The end goals of the protocol decentralization include:

The service and applications are the infrastructure of the blockchain ecosystem. Common services including blockchain explorer, staking dashboard, rpc endpoints, monitoring dashboard, and so on. A few essential applications were built by the Harmony team as well including the Horizon bridge, 1BTC bridge, multisig wallets, and so on. All those services and applications need to externalized. Ideally, additional DAOs were formed to support the maintenance and continuous development of them. Each DAO would issue DAO tokens in order for them to be long term sustainable. Giv is creating a document to describe the path to decentralization of the products built by the Harmony team.

The decentralization and externalization requires long term sustainability. For each of the critical services, Harmony foundation would be the initial supporter. However, the DAOs or the external team should have a roadmap to create a token economy or business plan in order to sustain in the long run.

One key action we shall take in Harmony is to work with venture capitals to invest into the service team or DAOs. This is even more important than the technical handover of the service/applications.

RPC Infrastructure serves all users of the blockchain. Harmony is developing an elastic RPC architecture to serve dynamic loads of the RPC requests. The elastic RPC will be open sourced to benefit all the other EVM compatible blockchains. The elastic RPC architecture utilizes the same web service technology as used in large scale web2 companies like Google/Meta. It provides a cost-effective way of serving dynamic request patterns. The design doc is available in this link.

Another way to think about it is to engage with existing service companies such as Infura, Pokt network, to bootstrap the support of the Harmony network using their existing product. However, the long term success is still to be defined by the economically sustainability of those services.

A decentralized ecosystem needs the decentralized governance model. Harmony foundation keen on decentralizing the development and operation of the blockchain. We have adopted the open development model by opening all the engineering repos, all business documents and channels are available online as well in https://open.harmony.one

Open governance will be implemented via DAO organization. 80+ DAOs have been formed in Harmony with different purposes including developer, community, social impact, validators etc. One of the first DAO formed in Harmony is the validator DAO. It had been running for over a year. Many proposals have been proposed and implemented. The conversation and discussion are all open in the forum (https://talk.harmony.one/c/governance/validator/34)

Open development also paved the way for decentralization. Open source projects such like Linux Kernel or Ethereum showcased the power of open development. Everyone is able to submit the changes and codes to fix bugs or develop new features. Harmony blockchain had been open sourced since the very beginning at 2018. It has 252 public repositories.

From the governance perspective, Harmony foundation will be drive the development and adoption of the harmony protocol. An ideal structure to ensure a long term success of harmony may require a fully decentralized organization as well. A proposal of the decentralized organizations is like the following.