In an attempt to repair the damage of the $100 million Horizon Bridge hack, the Harmony (ONE) blockchain teams have released a governance proposal that includes a hard fork and an increase in the supply of tokens. This solution was met with strong hostility from the community.
Harmony proposes a hard fork to increase the offer of ONE
To try to repair the consequences of the Horizon Bridge hack last June, Harmony (ONE) publishes a proposal including a hard fork to allow the reimbursement of victims.
This governance proposal includes the issuance of new ONEs, thus changing the established rules by increasing the supply.
Distributed tokens would then be locked to be unlocked month after month over a three-year period. This measure would thus avoid generating high volatility on the price.
The consequences of this hack, attributed to the North Korean hacker group Lazarus, have been disastrous for the blockchain. In addition to the 100 million dollars stolen, it has caused a strong imbalance on the decentralized finance applications (DeFi) present on the network.
Indeed, the exploitation of the bridge created arbitrage opportunities on loan and borrowing protocols. Traders then took advantage of the situation, borrowing large amounts of ONEs that would not be repaid, thus blocking liquidity providers in their position. The proposal therefore also aims to create new tokens to free up stuck investors.
A controversial proposal to the community
This proposal for a hard fork and an increase in ONE’s offering has been met with much discontent on the Harmony governance forum. Indeed, while inflation in the economy in general, seems more than ever to be pointed out, this solution does not please everyone. And for good reason, it is equivalent to resorting to the principle of printing money, so often criticized.
Beyond the problem of the inflation of the ONE, to which the Harmony community is hostile, another point makes people react:
“Given that validators are aligned with the growth of the Harmony chain, we hope they will be easily persuaded that the repayment of losses will restore the trust that is key to Harmony’s success. […] If we fail to gain the support of the required number of validators, we will resort to non-reimbursement.”
In the proposal’s discussion thread, some are characterizing this clarification, as to the possibility of non-reimbursement, as a threat. Regardless of the outcome of the upcoming vote, this blockchain may therefore face difficulties in regaining investor confidence after such events.