I believe the One Piece itself is a silly knot that can only be untied using Gear 5.
I think it might be based on the Valknut of Norse mythology. This also comes from my believe that Luffy will become the eyepatch pirate, resembling Odin, with whom the Valknut has been associated. Luffy did try to take out his own eye (which Odin did) in chapter 1. There is also the depictions of Nika wielding a spear, drawing further similarities to Odin. Plus Odas favorite panel is Luffy dancing with wolves, which are also associated with Odin.
Of course we saw Joyboy bind his Haki into a knot for Emet to use, so it's not unlikely he used a knot for the One Piece as well.
Further more we have a japanese version of One Piece, "the great hito-tsunagi treasure", possibly being read as "the rope linking all men".
There is also the rope in the One Piece logo itself.
I have a few rough ideas what the unraveling of the knot does and I'd love to hear some more.
Since the Valknut is associated with the dead it could be a connection to that?
There also is ofc the option of it being enough haki to destroy the red line, making it fall on Fishman Island and fulfilling the prophecy of Luffy destroying it. Or does it nuke the remains of the ancient kingdom, brining the sea levels back down?
Maybe Joyboys haki connects everyone to how Luffy is feeling when he unravels it, giving them the satisfaction of having their dream fulfilled and inspiring them to seek their own.