HIP-30 Update
HIP-30 aims to drive network efficiency and transaction finality, expedite recovery and application development, and create the framework for sustainable growth and broader governance participation.
This update integrates community feedback, setting a trajectory to improve network utilization further. Additionally, this proposal advances our ambitious objective of achieving 1-second finality, accelerates the resolution of depegged assets, and establishes a foundation for community-driven use cases and ecosystem expansion.
This effort marks the beginning of a new and improved era of Harmony, promoting sustainable growth and greater network effectiveness. We continue to value everyone’s ongoing support and input as we collaboratively navigate this path.
Why HIP-30: Drive Network Efficiency and Application Utility
Our vision for network utilization revolves around two key aspects: efficiency and practical use.
Technological improvements that streamline operations and boost network performance, as demonstrated in our proposal’s ambitious goal of achieving 1-second finality, bring with them unparalleled efficiency.
Network utilization is equally about putting our network to practical use through carefully selected use cases. This is where the community plays a vital role. To facilitate this process, the governance structures within the Emission DAO, developed in collaboration with the community during the first year after the network upgrade, will ensure that emission funds are directed toward the selection and development of these use cases.
By implementing HIP-30, we optimize for both efficiency and application, resulting in a technologically advanced, community-driven network.
Details of HIP-30
HIP30-1: Splitting the annual token emissions between staking and ecosystem development. Keeping the token emission for staking proportional to the number of nodes on the network.
HIP30-2: Reducing the number of shards from 4 to 2.
HIP30-3: Decreasing the total number of nodes from 250 to 200 for Shard 1 for faster finality and actively developing towards 1-second finality.
HIP30-4: Limiting each node to 1 BLS key. Upon reviewing feedback and community input we have decided to omit HIP30-4 from the proposal.
HIP30-1: Splitting the annual token emissions between staking and ecosystem development.
The proposed emission split is proportional to the number of nodes on the network. The current 441.5 million ONEs emission is allocated for 1000 nodes. With the proposed 450 total nodes, it would equate to 45% of 1000 nodes, and thus the proposed emissions to staking would be 45% of the 441.5 million, which is 198.675m ONEs.
Timeline:
- HIP-30 Snapshot Vote
- HIP-30 Pass
- HIP-30 Hard Fork Implementation with Updated Emissions
- Start of 242.825m ONE Allocation Towards Recovery
- Development of Governance Structures With Community
- Development of Emission DAO
- End of first 242.825m ONE Allocation
- Emission DAO Guides Future Emission Allocations
Initial Allocation: All of the ecosystem split (242.825M ONE) will go towards recovery. These funds will be distributed in the form of burning and redemption of de-pegged assets. The burning and redemption of depegged assets will operate in a manner similar to what is currently being done with recovery partners. The specifics of how the ecosystem split will be utilized towards these efforts are detailed below.
Modulo has utilized a sliding scale variable return rate to push for the highest burn efficiency. Recovery1 is working on reducing bot interactions and focusing on pre-hack wallets with a whitelist of pre-hack addresses. Tranquil continues with its market buy and burn method. They will continue to take feedback to best serve the community. At our current recovery contributions, we estimate that substantially all depegged assets could be removed in around 91 months.
Outcome: With the proposed emission split of HIP-30, we estimate that substantially all depegged assets could possibly be removed within 18 months under the current process. Timelines may change depending on any number of factors related to user participation in recovery and general market conditions. Other potential allocation splits such as the 10%-90% allocation from the original post could lead to an even quicker recovery process.
Governance: During the initial allocation, where the ecosystem split will go towards recovery, governance plans will be proposed and created in collaboration with the community to clearly define the process for handling and allocating the ecosystem split in subsequent years. If a proper governance structure is not put in place by the time the first 242.825m ONE has been allocated, future allocation will continue to go towards recovery.
After Initial Completion: Once 242.825M ONE have been allocated towards recovery, the upcoming allocation of funds will be determined with community support per governance structures created during the first allocation. This governing body will be able to allocate percentages of the ecosystem split towards continuing recovery, reward stakers, or provide funding for new proposals.
HIP30-2: Reducing the number of shards from 4 to 2
Consolidating the network from 4 shards to 2 will streamline network operations, enhance efficiency, and still maintain the possibility of cross-shard communication in the future. This change will result in lower network latency and reduced communication overhead, translating to faster transaction processing.
We are currently underutilizing our network shards. The reduction from 4 shards to 2 will result in a more efficient network. The transition will decrease the amount of external slots from 900 → 405, and internal from 100 → 45. Thus, bringing the total slots available down from 1000 → 450. In order to maintain the same emission structure following the shard reduction, the ONE per block will be changed accordingly.
HIP30-3: Decreasing the total number of nodes from 250 to 200 for Shard 1 for faster finality and actively developing towards 1-second finality.
Reducing the number of nodes will bring unprecedented optimization to the network as a result of the previously mentioned decrease in the number of required message exchanges and limiting communication overhead. With 200 nodes in Shard 1, we would be able to work on faster finality towards 1-second finality.
The approach towards achieving 1-second finality involves decreasing the consensus latency by reducing the number of communication rounds between nodes in the shard. By doing so, the network can process and confirm transactions faster, improving overall network performance and user experience.
Shard 0: 250 nodes, 2-second finality.
Shard 1: 200 nodes, accelerating development towards 1-second finality.
The discrepancy in the number of nodes between Shard 0 and Shard 1 is part of the ongoing active development. Shard 0 maintains the current infrastructure while the adjustments are trialed and optimized on Shard 1. The reduced node count on Shard 1 allows the team to experiment with faster finality without impacting the whole network’s stability.
The number of slots and keys per shard will follow the current 6% key limit per shard. Assuming an even split of internal nodes, the Shard 0 limit would remain the same, 225 and 13, respectively. The Shard 1 limit would be reduced to 180 and 10. The reduction of shards, therefore, reduces the max key per validator from 52 → 23. More rewards will be allocated across Shard 0 to ensure an efficiency balance.
Achieving 1-second finality could bring significant benefits, including supporting higher transaction volumes, faster smart contract execution, and an overall smoother user experience. These improvements could increase Harmony’s competitiveness, especially for decentralized finance and other high-volume applications.
Conclusion
HIP-30 is proposed to bolster network efficiency, expedite transaction finality, quicken recovery, and foster long-term community-driven ecosystem development. The ultimate objective is to build the foundation for a network that is highly utilized with the efficient allocation of funds to achieve sustainable development and growth.