Humanode ($HMND): decentralized biometric Human node
The blockchain industry is constantly growing and evolving. More and more new and innovative projects are emerging this year. Today we introduce Humanode (HMND), a Layer 1 that fuses artificial intelligence, decentralization, and biometric data with the goal of creating a democratic and transparent blockchain, trying to solve problems related to the concepts of PoS (Proof Of Stake) and PoW (Proof Of Work).
What is Humanode ?
Humanode (HMND) is a substrate based standalone Layer 1 where sybil-resistance is provided through private decentralized biometric verification of human existence and uniqueness instead of PoW and PoS. The key is that a validator Human node can only deploy one node and that all nodes are equal in terms of validation and voting power, or how we usually put it "1 human = 1 node = 1 vote.
What makes it unique ?
The uniqueness and liveness of humans behind nodes is checked by an AI which determines whether a person is unique and whether he is alive through a multitude of facial recognition modules. The biometric processing is conducted in a private and decentralized way so that there is no Personal Identifiable Information or biometric data that can be reverted back into its original state.
What is the main goal ?
The main goal of Humanode is to create a truly distributed, democratic and sybil-resistant blockchain Layer 1 owned by millions of human nodes in an equal share.
As described within their whitepaper, Humanode offers an alternative solution to PoS and Pow issues.
"... Issuance and commission in PoW blockchains
In PoW blockchains, the protocol acts as the emitting entity. Most PoW coins have set the emission and max supply. For example, Bitcoin (
BTCUSD
) has a max supply of 21 million coins. At the time of the creation of this paper, its circulating supply is 18.8 million. With emission set in every block and the halving that happens every four years, it will take approximately 120 years to mint everything. Emission is received by miners not in the form of a loan, but directly. However, only miners receive it. Ordinary users and even financial entities that hold large chunks of Bitcoin get nothing. Miners either decide to hold onto the emitted money or sell it on the market. This system does not sell debt to the agents at its bottom, but devaluation of non-miner agents’ assets, even if ridiculously small, still happens, as the emission is received only by miners. Another thing is that supply is not balanced with value creation, meaning that the limited supply does not line up with the growth of value in the system. That makes it deflationary, which on a nation-sized scale makes economies unhealthy and can even lead to a crisis."
" ... Issuance and commission in PoS blockchains
As in PoW, in PoS the protocol acts as the issuance entity. In most cases, PoS have some kind of a governing entity that decides upon emission; it can be either pre-set as in Bitcoin or it can be flexible with many different methods of realization. Commonly there is a DAO that sets the emission. As in PoW, validators receive issuance directly from the protocol, but in delegated PoS, they also redistribute it across their Delegators. Protocol users get nothing from emission and DAO can set emission at any level. Sometimes devaluation is very strong because validators accumulate minted tokens and sell them on the market to cover expenses and for profit—at the same time, their networks are not as big as Bitcoin, which counterweighs the devaluation effect."
" ... Fath on Humanode
The emission of tokens in Fath behaves differently from the systems mentioned above. One of the hypotheses that are the basis of Fath is that it is possible to mitigate the long-term effects of devaluation by the proportional distribution of emission. Emission is delivered to every single member of the network directly from the protocol, regardless of whether a person is a validator or not. The amount of emission is defined by the Fath protocol algorithm, which calculates the difference between real value creation (Gross Network Product; GNetP) in two different time periods. If GNetP in the second period is different from GNetP in the first then the algorithm calculates the difference and changes the monetary supply by the same percentage.
We consider the HMND token first of all to be a transaction-processing as well as a biometric network, which is why GNetP in the first implementation of Fath will be calculated based on the fees spent by participants of the network. If the amount of commission received by human nodes in the second period is different from the first, then the algorithm applies the same difference in percentage to supply and rebalances every single wallet that exists.
Two types of rebalances occur, inFath and outFath:
Tokenomics
The total supply of HMND token is capped. The HMND token has a max supply fixed at 400,000,000 tokens. At the time of writing this analysis, there are 31,905,741 HMND tokens in circulation, less than 10% of the total supply. The project was officially listed to the public in April 2023 on KuCoin with a launch price set at $0.2589.
Minting process
New HMND tokens are minted through a mechanism called the Fath hypothesis. The main idea behind the Fath hypothesis is a full-reserve system that calculates the amount of goods and services sold in equal periods of time. If the value created in the new period is greater than the value in the previous one by 1%, the Fath protocol issues 1% of the supply and delivers it to every single wallet in the network, depending on the account balance (savings). If the wallet holds 1% of the supply during the emission, it gets 1% of the minted tokens directly from the protocol. Any person in the world, no matter where they are from or who they are, can become a human node, as long as that person has access to devices that can conduct biometric processing (for example, a smartphone with a camera and biometric processing applications for recognition) or other verified hardware. The system delivers the equality of every single human node by deriving only one node from one biometric identity and mitigates any disproportion of power due to reward equality of individuals. As the system implements the Fath hypothesis, which negates the effect of devaluation on agents of the system, this narrows gaps between the users of the network as the emitted value is distributed proportionally to every participant.
Key Features
Humanode seems offering a better solution to PoW and PoS consensus mechanisms by incentivizing network nodes in a more democratic way. The project is certainly ambitious and innovative, so we think is right to explore it. Will be interesting to see how this new blockchain project will grow in the crypto space. Currently the market capitalization for this project is about 10 million. We can assume that with growth in the entire crypto sector and future adoption, this asset can reach a market cap of 50-100 million within 3 years. If the team deliver on its promises, HMND could increase the price by 5x to 10x the current value. The price valuation could be boosted by the scarcity of tokens in circulation.
Write what you think about this project, and what strategies you have used to integrate this crypto asset within your investment portfolio.
What is Humanode ?
Humanode (HMND) is a substrate based standalone Layer 1 where sybil-resistance is provided through private decentralized biometric verification of human existence and uniqueness instead of PoW and PoS. The key is that a validator Human node can only deploy one node and that all nodes are equal in terms of validation and voting power, or how we usually put it "1 human = 1 node = 1 vote.
What makes it unique ?
The uniqueness and liveness of humans behind nodes is checked by an AI which determines whether a person is unique and whether he is alive through a multitude of facial recognition modules. The biometric processing is conducted in a private and decentralized way so that there is no Personal Identifiable Information or biometric data that can be reverted back into its original state.
What is the main goal ?
The main goal of Humanode is to create a truly distributed, democratic and sybil-resistant blockchain Layer 1 owned by millions of human nodes in an equal share.
As described within their whitepaper, Humanode offers an alternative solution to PoS and Pow issues.
"... Issuance and commission in PoW blockchains
In PoW blockchains, the protocol acts as the emitting entity. Most PoW coins have set the emission and max supply. For example, Bitcoin (
BTCUSD
) has a max supply of 21 million coins. At the time of the creation of this paper, its circulating supply is 18.8 million. With emission set in every block and the halving that happens every four years, it will take approximately 120 years to mint everything. Emission is received by miners not in the form of a loan, but directly. However, only miners receive it. Ordinary users and even financial entities that hold large chunks of Bitcoin get nothing. Miners either decide to hold onto the emitted money or sell it on the market. This system does not sell debt to the agents at its bottom, but devaluation of non-miner agents’ assets, even if ridiculously small, still happens, as the emission is received only by miners. Another thing is that supply is not balanced with value creation, meaning that the limited supply does not line up with the growth of value in the system. That makes it deflationary, which on a nation-sized scale makes economies unhealthy and can even lead to a crisis." " ... Issuance and commission in PoS blockchains
As in PoW, in PoS the protocol acts as the issuance entity. In most cases, PoS have some kind of a governing entity that decides upon emission; it can be either pre-set as in Bitcoin or it can be flexible with many different methods of realization. Commonly there is a DAO that sets the emission. As in PoW, validators receive issuance directly from the protocol, but in delegated PoS, they also redistribute it across their Delegators. Protocol users get nothing from emission and DAO can set emission at any level. Sometimes devaluation is very strong because validators accumulate minted tokens and sell them on the market to cover expenses and for profit—at the same time, their networks are not as big as Bitcoin, which counterweighs the devaluation effect."
The emission of tokens in Fath behaves differently from the systems mentioned above. One of the hypotheses that are the basis of Fath is that it is possible to mitigate the long-term effects of devaluation by the proportional distribution of emission. Emission is delivered to every single member of the network directly from the protocol, regardless of whether a person is a validator or not. The amount of emission is defined by the Fath protocol algorithm, which calculates the difference between real value creation (Gross Network Product; GNetP) in two different time periods. If GNetP in the second period is different from GNetP in the first then the algorithm calculates the difference and changes the monetary supply by the same percentage.
We consider the HMND token first of all to be a transaction-processing as well as a biometric network, which is why GNetP in the first implementation of Fath will be calculated based on the fees spent by participants of the network. If the amount of commission received by human nodes in the second period is different from the first, then the algorithm applies the same difference in percentage to supply and rebalances every single wallet that exists.
Two types of rebalances occur, inFath and outFath:
- If the amount of commission paid out in the second period of time exceeds the commission paid out in the first period, then inFath occurs and emission is distributed across every wallet proportionally
- If the amount of commission paid out in the second period is smaller than in the first, then outFath occurs and the protocol proportionally burns excessive supply throughout every single wallet as well"
Tokenomics
The total supply of HMND token is capped. The HMND token has a max supply fixed at 400,000,000 tokens. At the time of writing this analysis, there are 31,905,741 HMND tokens in circulation, less than 10% of the total supply. The project was officially listed to the public in April 2023 on KuCoin with a launch price set at $0.2589.
Minting process
New HMND tokens are minted through a mechanism called the Fath hypothesis. The main idea behind the Fath hypothesis is a full-reserve system that calculates the amount of goods and services sold in equal periods of time. If the value created in the new period is greater than the value in the previous one by 1%, the Fath protocol issues 1% of the supply and delivers it to every single wallet in the network, depending on the account balance (savings). If the wallet holds 1% of the supply during the emission, it gets 1% of the minted tokens directly from the protocol. Any person in the world, no matter where they are from or who they are, can become a human node, as long as that person has access to devices that can conduct biometric processing (for example, a smartphone with a camera and biometric processing applications for recognition) or other verified hardware. The system delivers the equality of every single human node by deriving only one node from one biometric identity and mitigates any disproportion of power due to reward equality of individuals. As the system implements the Fath hypothesis, which negates the effect of devaluation on agents of the system, this narrows gaps between the users of the network as the emitted value is distributed proportionally to every participant.
Key Features
- Layer 1 focusing on AI and biometric data
- Fath Hypothesis Mechanism: an alternative consensus mechanism offered as an innovative solution to classic consensus models.
- Open source
- Ethereum EVM Compatible
- Capped supply
Humanode seems offering a better solution to PoW and PoS consensus mechanisms by incentivizing network nodes in a more democratic way. The project is certainly ambitious and innovative, so we think is right to explore it. Will be interesting to see how this new blockchain project will grow in the crypto space. Currently the market capitalization for this project is about 10 million. We can assume that with growth in the entire crypto sector and future adoption, this asset can reach a market cap of 50-100 million within 3 years. If the team deliver on its promises, HMND could increase the price by 5x to 10x the current value. The price valuation could be boosted by the scarcity of tokens in circulation.
Write what you think about this project, and what strategies you have used to integrate this crypto asset within your investment portfolio.