Harmony community rejects plan to compensate Horizon hack victims worth $100 million

Harmony founder Stephen Tse said that the team will revisit the proposal to compensate victims of the Horizon cross-chain bridge hack worth $100 million by issuing additional native ONE tokens.

#HarmonyONE founder Stephen Tse provided the community with a response and next steps on the recent proposal.

«From your suggestions and feedback above, we will create additional proposals and opportunities for everyone to engage in the process.»

More 👇https://t.co/GytUpuM4WJ

— Harmony 💙 (@harmonyprotocol) July 28, 2022

Initially, the developers proposed to compensate victims by conducting a hard fork and issuing the required amount of ONE over three years. The plan envisaged two options for additional issuance:

• 2.4 bn ONE — compensation for 50% of the damage;
• 4.97 bn ONE — for 100%.

The team noted that treasury funds are insufficient for compensation and they do not consider using them for this purpose.

“We have decided not to use the treasury of the fund in the interests of the project’s durability and well-being, as compensation from these funds would severely hamper the structure’s ability to sustain Harmony’s growth and its ecosystem,” the proposal states.

The plan drew near-unanimous backlash from users. Most pointed to its inflationary nature, which would dilute the price. Some noted that it would hit large ONE holders the hardest.

The decision not to use treasury funds also drew criticism from users.

“All you need to do now is say something like: ‘After careful consideration and feedback from the $ONE community, we will NOT move forward with the proposal.’ And you should do that as soon as possible,” urged one commenter to the team.

Hey @harmonyprotocol,

All you need to do now is say something like, «after careful consideration and feedback from the $one community, we will NOT move forward with the proposal».

You need to do that ASAP. 🤝

— Paco 💙 (@PacoG2021) July 27, 2022

Voting on the proposal ends on August 3. However, in light of user reaction, just a day after it was put up for discussion, the project’s founder said the team is “getting back to the table” to develop other options.

“Based on your feedback, we will create additional proposals and opportunities for everyone who can participate in this process. I ask you to wait a few days while we work with the team. We will return with new information. I sincerely understand your disappointment with the current proposal. We hope that our next steps will bring more options and clarity for discussion with the community,” Tse wrote.

After the Horizon attack, the Harmony team offered a reward of $1 million for the return of the stolen funds. The size of the reward puzzled users, and a crypto trader going by the alias Degen Spartan called it “an insulting amount”. As a result, the offer was increased to $10 million.

3/ Our FINAL term: Retain $10M and return the remaining stolen amount. In exchange, Harmony will cease its investigation.

— Harmony 💙 (@harmonyprotocol) June 30, 2022

Elliptic believe that the Horizon attack may have been carried out by the North Korea–linked Lazarus group. It is also allegedly involved in the attack on the Ronin cross-chain bridge.

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