Harmony will create over 2 billion ONE tokens to repay $100 million in hacking losses
The Harmony blockchain network has presented a fresh proposal in which platform developers would distribute ONE token to recompense victims of the Horizon bridge attack in June.
In a release on July 26, Harmony claimed that the refund proposal is a part of the platform’s strategy to repay affected wallets practically and realistically.
Harmony said that damages to affected wallets must be reduced in a way that is both practicable and optimal for the project to preserve the ecosystem’s general health.
The two plans to recompense compromised wallets are: Notably, the creators presented two choices, with the first anticipating a full refund with the minting of 4.97 billion ONE, or 138 million monthly tokens for three years.
Aside from this, the developers are considering rolling out an estimated 50% reimbursement, which would result in the minting of 2.48 billion ONE, or 69 million tokens every month for three years. The plan is set to be voted on between August 1 and August 15.
Despite worries about the increasing quantity of ONE token, both suggestions were based on the asset’s current value of $0.2. In this instance, the compensation amount is expected to stay the same even if the value of ONE continues to decline, given that the current level represents a 95 percent decline from the all-time high of $0.37.
Before the attack, the Horizon bridge allowed users and investors to trade cryptocurrencies on the Ethereum, Binance Smart Chain (BSC), and Harmony blockchains.
The breach, reportedly carried out by the North Korean organisation Lazarus, resulted in the loss of around $99,340,030 worth of cryptocurrency, affecting over 65,000 wallets and 14 distinct asset kinds.
Impact on uncollectible loans
In addition, Harmony reported that the stolen cash led to considerable harm to many decentralised finance (DeFi) systems due to uncollectible loans.
The platform indicated that traders took advantage of arbitrage opportunities to borrow ONE against de-pegged stables without intending to return the borrowed cash. The scenario resulted in insufficient money. Harmony feels that resolving the problem is crucial for gaining the confidence and support of DeFi members.