Backlash As Harmony Proposes To Strike 4.97 Billion Tokens To Compensate Victims

0
0

The team behind the Harmony blockchain project has proposed to TBEN up to 4.97 billion in its native token ONE to compensate the victims of the $100 million Horizon Bridge hack in June.

The proposal has met with significant backlash from community members, with much attention being given to concerns that such a large issuance of new tokens would create inflationary pressures on the asset and lower its value.

In its July 26 proposal via the project’s community page, the Harmony team noted that 65,000 wallets in 14 different assets were affected by the hack and that they “worked tirelessly to brainstorm and develop ways to repay victims.” “.

ALSO READ  Buying Crypto With Credit Cards Is Now Indirectly Banned In Taiwan

The Harmony team stated that it could not offer a solution that would result in an immediate refund given “the current state of Harmony’s treasury”, so it offered two options where multiple billions of ONE tokens would be hard forked to the Harmony blockchain. be beaten, some given to the victims of the hack.

The first option offered an estimated 100% redemption through 4.97 billion new ONE tokens, while the second option estimates a 50% redemption with 2.48 billion ONE tokens over a three-year period.

The team is waiting for community feedback before moving forward, but initial reactions already seem overwhelmingly negative, with most comments on the community page or on Twitter expressing deep concern about the ideas.

The community has also noted that a similar recovery method was used by the Terra ecosystem after the $40 billion meltdown in May.

ALSO READ  Bitcoin Holds $24K As USD Hits 3-Week Lows In Euro-Zone Inflation Report

On the community page, user BSKA wrote: “This is absolute nonsense, delete the entire proposal and go back to the drawing board team!” while CJL noted “let me make this clear: not a word for weeks” […] and the proposal you come back with is a LUNA style hard fork and a 3 year cardigan?”

Related: Notorious North Korean hacker group identified as suspect in $100M Harmony attack

Community member Shwaver suggested this proposal will eventually drive builders away from the Harmony ecosystem:

“You did this all the way backwards. In order to be able to pay back, you must first restore a stable ecosystem, e.g. repeg or alternative, so that projects have a reason to build here, people have a reason to make long-term investments, etc.

“This purely inflationary solution does the opposite – create a financial incentive to sell all ONE now and build elsewhere – while also pointing out the repeg,” she added.

ALSO READ  Ongoing Solana-based wallet hack has already drained millions

In June, the Horizon Bridge to the Harmony layer-1 blockchain was exploited for $100 million.

Later in the month, the team attempted to offer a $1 million bounty to the hacker who misused the bridge to return the money, though the strategy seemingly backfired.

Harmony’s ONE token costs $0.02 at the time of writing, with a total supply of 13.5 billion tokens, according to Coinmarketcap.