Harmony plans to refund either 100% of 4.97 billion new ONE tokens or a 50% reimbursement of 2.48 billion ONE tokens.
The Harmony blockchain project team has suggested that victims of the $100 million Horizon Bridge hack in June receive compensation in the form of up to 4.97 billion of its native currency ONE.
Members of the community have reacted negatively to the idea in huge numbers, with many voicing worries that the asset will experience inflationary pressure and lose value as a result of the large-scale issuing of new tokens.
The Harmony team stated in its proposal posted on July 26 via the project’s community page that the attack affected 65,000 wallets across 14 distinct assets and that they had “worked diligently to explore and establish routes towards reimbursing” victims.
Given “the current state of Harmony’s treasury,” the Harmony team claimed it was unable to provide any solution that results in immediate reimbursement. As a result, it provided two options that involved creating several billion ONE tokens via a hard fork to the Harmony blockchain and giving them to hacking victims.
While the second option projects a 50% compensation with 2.48 billion new ONE tokens over a three-year period, the first option promises to deliver an anticipated 100% reimbursement via 4.97 billion brand-new ONE tokens.
The team is seeking community opinion before moving forward, but first reactions already seem to be extremely unfavorable, with the majority of tweets or comments on the community page expressing serious reservations about the concepts.
The Terra eco-system used a similar strategy for rehabilitation after its $40 billion meltdown in May, the community has also highlighted.
“This is absolutely garbage, scrap the whole proposal and go back to the drawing board Team!” while CJL noted “let me get this straight: no word for weeks […] and the proposal you come back with is a LUNA-style hard fork and a 3-year vest?” remarked user BSKA on the community website.
This idea, according to community member shwaver, will ultimately drive creators away from the Harmony eco-system:
“You’ve done this completely backwards. In order to afford repayment, you need to first reestablish a stable ecosystem e.g. repeg or alternative so projects have a reason to build here, people have a reason to make long-term investments, etc.”
“This purely inflationary solution does the opposite–creating a financial incentive to sell all ONE now and build elsewhere–while also punting on the repeg,” they added.
In June, the Harmony layer-1 blockchain’s Horizon Bridge was used to steal $100 million.
The team attempted to offer a $1 million reward to the hacker who used the bridge to steal the money later in the month, but the plan appeared to fail.
According to Coinmarketcap, the ONE token from Harmony has a total quantity of 13.5 billion tokens and is now trading at $0.02 per token.