Harmony Makes $100M Hack Reimbursement Proposal

  • Instead of using treasury funds, Harmony has proposed to make a 100% reimbursement by minting 4.97 billion ONE tokens, or a 50% one with 2.48 billion tokens.
  • Both proposals were made based on the current price of the ONE token, meaning users will receive the same amount of tokens regardless of future price changes.
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The Harmony blockchain is still looking for ways to cover user losses from its June hack, and one way could be the minting of up to 4.97 billion ONE tokens, the team behind the project said in a reimbursement proposal on 27 July.

According to the proposal, the platform is unable to offer a solution that would result in immediate user reimbursement, and so it had decided to give its users two option to choose from. The first will see Harmon mint 4.97 billion ONE tokens over three years — which is an estimated 100% reimbursement — while the second offers only 50% reimbursement through the minting of 2.48 billion tokens over the same period. The team behind the project said in the blog post:

“The Harmony team feels it is important for the overall strength of the ecosystem that harms to impacted wallets are mitigated in a manner that is feasible and most viable for the project. Our community is a critical component to Harmony’s success, and the team appreciates your patience and understanding as we continue to work on this path forward together.”

Both proposals will be up for community vote starting 1 August, with the team noting both were based on the current ONE price of $0.02, meaning users will receive the same amount of tokens each month regardless of the price of ONE. The platform noted that 65,000 wallets across 14 different assets were impacted by the hack.

Harmony also explained that it chose not to use its treasury funds for the reimbursement plans as it was against the “interest of the longevity and wellbeing of the project”. The two proposals were met with a significant amount of backlash from the Harmony community, many of which noted that such a large issuance of tokens could be dangerous, and compared it to the recovery method used by the Terra eco-system.

Back in June, the Harmony blockchain fell victim to a hack that saw around $100 million being drained from the network through its Horizon bridge. Shortly after the incident the team behind the project contacted the relevant authorities, and even offered the hacker a $1 million bounty in return of the funds, but its efforts were not rewarded.

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