The Harmony protocol team announced an update for its community and partners regarding its asset-recovery proposal, intending to preserve Harmony’s blockchain without minting new tokens, following the $100 million Horizon Bridge hack in June.
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Harmony is an effective proof-of-stake (EPoS) sharded network with a cross-chain model that aims to make it the Layer 1 trustless bridge across all chains.
The hack exploited the Horizon Ethereum Bridge — a cross-chain bridge to migrate assets between the Harmony and Ethereum blockchains. The attackers stole BUSD, USDC, ETH, and WBTC assets worth $100 million, before swapping all tokens to ETH and proceeding to launder the funds.
Harmony offered a $1 million bounty to return the stolen funds, to no avail. Harmony’s core team then proposed a hard fork to mint billions of new Harmony ONE tokens as part of a plan to reimburse hack victims.
At the time, the core team argued against spending its foundation treasury, saying the funds were for growth and ecosystem plans. The Harmony community appeared unhappy with this proposal on the governance forum, concerned at the inflationary impact of such a mint. The proposal was subsequently withdrawn.
In the new proposal, announced today via a blog post, the Harmony team said that after listening to Harmony’s validators and community, it shared the goal of “preserving the foundation of the Harmony blockchain with 0% minting,” and now proposed to use the foundation treasury for recovery funds.
“We propose not minting more ONE tokens nor changing our tokenomics with a hard fork of the protocol. Instead, we propose deploying our treasury towards both recovery and development.”
Harmony added that in coming days it would provide a more detailed update outlining the mechanisms to deploy the funds allocated for recovery.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
James is a newsletter writer at The Block and focuses on blockchain ecosystems. Prior to joining The Block, James was a freelance content writer in the crypto industry, covering everything from Layer 1s, Layer 2s, DeFi, DAOs, NFTs and P2E gaming. Follow him on Twitter @humanjets.
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