Harmony seeks to reimburse $100M hack victims with ONE tokens

on Jul 27, 2022
  • Harmony developers announced the proposal on Wednesday and seek minting of new ONE tokens.
  • The blockchain would need a hard fork to proceed with the plan.
  • The community will vote on it between 1st and 15th August 2022.

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The Harmony (ONE) team has announced a proposal that seeks to have victims of the Horizon bridge hack reimbursed using the blockchain network’s native token ONE.

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The reimbursement plan, the team said, is part of the Harmony team’s efforts to refund the $100 million hack victims. It is one of the ways the developers believe can help strengthen the community of users going forward.

The $100 million Horizon bridge hack

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The Horizon bridge hack in June, traced to the notorious North Korea-backed Lazarus Group, saw $99,340,030 worth of crypto assets stolen. 

According to Harmony, the breach on the proprietary bridge affected roughly 65,000 wallets, with stolen funds cutting across 14 different digital asset types. The proposal involves a route towards potential reimbursement for victims.

Reimbursement will be in the form of ONE tokens and span a three-year period. It’s important to note that the current state of Harmony’s treasury has limited our ability to provide any solution which involves immediate reimbursement.

What’s the reimbursement plan?

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Per the Harmony team, a hard fork will be required if the community adopts the proposal, with this step required in order to “increase the supply of ONE tokens.”

Currently, the maximum supply of ONE is set at 13,156,044,839. If the community adopts the proposal, the newly minted tokens will be distributed over a three-year period, with claimant wallets set to receive tokens on a monthly basis.

The proposal also floats two reimbursement options – either a 100% or 50% reimbursement.

For the first one, the team estimates 4.97 billion ONE tokens will be minted and distributed over three years at a monthly emission of 138 million tokens. This equates to $2.76 million per month based on the price of $0.020 per ONE token.

Option two has an estimated 50% reimbursement plan, putting the amount of minted tokens at 2.48 billion. Over a three-year monthly emission plan, this will see 69 million ONE (roughly $1.38 million at the price of $0.020) issued to claimant wallets.

DeFi protocols to receive 86 million ONE

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The Horizon bridge heist is also impacting DeFi lending protocols in the Harmony ecosystem, the developer team explained.

This, the team says, is due to the “accruing of uncollectible loans,” something that could spiral into a more impactful outcome for the ecosystem if left unresolved. It includes some lenders withdrawing their support for Harmony.

To help address this, the developers suggest the minting of an additional 86 million ONE tokens to be allocated to impacted DeFi protocols. These tokens will also be claimed over three years.

The proposal will open for voting on 1 August and close on 15 August 2022.


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