Harmony Proposes Minting 4.97 Billion ONE Tokens to Compensate Hack Victims

The Harmony blockchain team has recently proposed to mint up to 4.97 billion of its native token, ONE, in a bid to compensate victims who were affected by the significant $100 million hack of its Horizon Bridge in June.

Announced via the project’s community page, the proposal has sparked considerable backlash among community members. Critics have raised concerns that such a large issuance of new tokens would increase inflationary pressure on the asset and subsequently depress its value.

“This proposal is disappointing. There is no other options. Seems to be either minting more tokens or minting more tokens. If we disagree, there will be no disbursement as per your proposal.”
— night (@night7576)

According to the Harmony team, a total of 65,000 wallets across 14 different assets were impacted by the hack. They acknowledged the difficulty in providing immediate reimbursement and stated that it would explore potential paths for compensating victims.

The two proposed options involve a hard fork of the Harmony blockchain to mint the new ONE tokens, with the first option aiming to provide an estimated 100% reimbursement through 4.97 billion new tokens, and the second option suggesting a 50% reimbursement with 2.48 billion tokens over a three-year period.

Despite the intentions behind the proposal, community sentiment has overwhelmingly skewed negative, with many voicing strong disapproval of the minting strategy.

“I will vote no on this 100%. Its not the answer. Use part of the treasury to refund the providers and get everything is good standing and move forward. The investors and community shouldn’t have to pay for it.”
— mcone.one (@mconecrypto)

Several users have compared this strategy to that of the failed Terra ecosystem, which also attempted a similar recovery method following its collapse. Community member BSKA remarked,
“*This is absolutely garbage, scrap the whole proposal and go back to the drawing board Team!”

Another user, CJL, noted the delayed response from the Harmony team:
“*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?”

Criticism of the strategy hints at a potential exodus of developers from the Harmony ecosystem. User shwaver stated,
“*You’ve done this completely backwards. In order to afford repayment, you need to first reestablish a stable ecosystem; projects have a reason to build here, people have a reason to make long-term investments, etc.”

Currently, Harmony’s ONE token is valued at approximately $0.02, with a total supply of 13.5 billion tokens, according to CoinMarketCap. It remains to be seen how the community will react as the proposal is deliberated further.