Harmony + AAVE

Are there any updates whatsoever about this @Pioneer ?

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Hi @Pioneer, can you please confirm that this is a true fact? Aave team does not seem to be aware of any initiatives from Harmony to resolve this problem.

Any evidence of any real action taken to resolve the crisis for the victims who lost all access to the assets?

no hope bro, i also in this situation

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I’m going to be persistent in being present here and asking questions.

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And how are you coping? Do you feel that something is going to happen?

@Pioneer what is the status of this? Is there any solution or talks going on with Aave??

@Tangle I’m wondering why was the Layerzero Bridge opened without blacklist some address?

Issue LINK
Tokens have been bridged out now with Layerzero to Ethereum, the 3 biggest Wallets have bridged everything out. So those who provided LINK to Aave like me good luck!


Issue ONE
People have withdrawn ONE for their unpegged stables and have send it to Binance and other CEX. This whale (portfolio Value $3.3m) is an awesome example. So also those who provided ONE to Aave, good luck!

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I don’t understand what you mean about LINK and why they should have blacklisted any addresses?
LINK was unaffected by the bridge hack and was and still is fully backed.
There’s still a ton of LINK, maybe $400k worth or something on Harmony.

So a lending protocol is based and lend and borrow, someone lend his lend and may someone other put some USDC as collateral and borrow LINK. If you collateral stable get’s unpeged you don’t have the need to pay back your borrow as it’s much more worth and also you can bridge it out without any losse. Expecial when you have to pay negativ APY on it. And this happened to all LINK and to most ONE, that’s why utilization is 100% and no lender can withdraw their assets.

Wallet 1


Wallet 2


Wallet 3


So here you can see the three wallets that are the biggest borrower (99.99% of LINK) and they all have taken their loan on 06/24 and have bridged out when LayerZero Bridge has opened.
Do you think they will ever pay back? If you would blacklist those address infront you could have avoid such situation and don’t let them bridge out.

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Ok, I see what you’re saying if they all borrowed then.

I’m pretty resistant to the idea of blacklists in general, but I do think it could have been a topic we could have discussed and debated before it was too late. It does seem a bit lopsided here if they all borrowed on the 24th and such.

A lot of the fault is with Aave still I believe too. Since really the fact that these people were able to borrow on the 24th when the hack occurred on the 23rd says a lot.

Maybe being able to work something out beforehand would have been good. But the thing is too that I’m not sure how effective blacklisting some addresses on the bridge would have been. Seems like it would be easy to bypass. We’d need to blacklist on the protocol level, which is a particularly serious topic for many reasons.

Anyway, 64 Lender can not withdraw their assets due to 3 individuals. Somehow this needs to be fixed and I thought it will always be also part of recovery ONE but looks like not. @mbarret3 @Pioneer

And you are right the bridge has enough liquidity to bridge out. If Harmony, Recovery ONE and Aave would be interested in solving this it would be already solved. $100k is needed but instead it’s supplied to that burn mechanism so other can benefit from arbitrage instead of solving this :man_shrugging:t3: make a page to swap aHar… → ONE and so recovery ONE could even buy all those Aave assets and earn their own 1039% APY on that and when DeFi is really restored in 2.5 years they could bridge out that stuff and benefit a lot.

I agree that a solution has to be found. Recovery one should propose as well a solution for the impacted users on aave. Aave issue was explicitely mentioned in the very first proposal and then just ignored. What is the purpose of recovery one if not to help users to recover because of the hack? Even deppeged assets owners are in a much better situation. For us, native coins ONE holders, we are just trapped!

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We’ve tried working with the community representatives at AAVE and with the core team, there doesn’t seem to be a middle ground. It is difficult to work with AAVE due to their decentralized nature and the fact that the community hasn’t made a proposal to negotiate on.

As mentioned above, a large amount of money was lost on the AAVE protocol the day after the hack.

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But this amount lost was possible due to the hack. Due to the decentralized way of aave, it takes more time to take decisions, this i agree. So both parties share responsibilities. Harmony assumed part of the responsibility in the very first proposal by proposing to mint ONE tokens for AAVE.
However, we are not here to tell who has the most responsibilities. We are here to ask that the recovery plan takes into consideration the aave situation as initially planned, such as being able to exchange aONE to ONE over the time. At least it would be a first positive steps even if it takes years. And things would move because for now, both parties seems to just ignore the issue. There are real people behind those messages, for which recovering this amount is a huge matter.

Even the LINK are borrowed after the hack this needs to be fixed by both parties.
Did Harmony immediately reached out to Aave?
Did Harmony spoke with Aave before they opened the bridge and let people bridge out there LINK?

It’s not possible to always say it’s their failure and give back the black card. At the end those who suffer from this are the user who provided their liquidity

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Did you create any proposal? From what I see on their forum they want someone to write a proposal - due to their decentralized nature. Or did you speak on the phone with someone?

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Here is the thread where potential solutions are discussed:

Maybe someone representing Harmony could join there to be present?

Don’t know who had contact with a AAVE but looks like both parties are not really interest to solve this. Read the document from recovery one and they recommend a No to Aave. They play old maid but the losers are those who provided liquidity
I wonder why other parties gets $1m reimbursement but Aave should not get it.
May Harmony could sell that BAYC and cover that negative debt but no, no one cares about our investment. They could have worked together and liquidate that Link with the Harmony oracle when price on-chain was even under $1, NO cause no one cares.
Let’s face it our money will stuck forever in there because those two parties don’t find an agreement and say it’s the other side failure and they have to reimburse.

I fully agree with you.

Maybe they had a brief phone call, or maybe they talked whilst having a coffee and bagel, but I haven’t seen any form of the dialogue between two parties.

They both seem to be very good with blaming each other and also highlighting the fact that users knew about all risks. They also seem to be annoyed that victims want something from them.

The fact that we are disfrenchized from any voting process in the governance just highlights the problem.

First, I’ll highlight that I can’t make decisions for either party, nor can I fund any sort of solution that is agreed upon. I have spent hours both in discussion with the BGD team (they provide technical services to the AAVE DAO) as well as reading through the AAVE documents and forums. Here’s a recap:

AAVE wants a deposit. They in some ways acknowledge that about half of this bad debt was accrued post-hack. They cannot guarantee that Harmony will be a partner or supported by their platform in the future, regardless of any funding solutions. They had an internal issue with Harmony being added to their protocol in a state of limbo between versions, which left the Harmony assets uncovered by their treasury set-aside. They are decentralized and have not launched any official and approved by the AAVE community proposal to address the concern. Why? Because the AAVE community recognizes this as a small problem for a few users (compared to the whole). This is not my opinion, this is what I have gathered from reading everything pertaining to the subject on both forums. I am not saying that to downplay the $500k of user funds that was lost (pre-hack), I am saying this because the AAVE community needs to answer the ARC here and approve a proposal for anything to even be considered: ARC: Harmony Recovery - Governance - Aave

Even then, the likelihood of funding the full 1M + that is stuck is low, because of the finger pointing of who’s problem is that additional loss that is due to the hack/ AAVE oracles/ lack of action post-hack (they allege they reacted within 30h). Here’s an example from an active AAVE user on a proposal outline:

Later, they went on to say that they didn’t want to make it an official proposal because::

"The problem with this proposal is that everyone who is not a victim here, does not see any positive points or benefits. I’m having plenty of doubts about this now.

Maybe good approach is to first find more positive aspects of this solution to AAVE stakolders?"

You’re right, no one is spending enough time representing AAVE users. It was a relatively small loss considering the whole, and there are few active and loud voices from the AAVE community. I recommend those few bond together and petition to the larger AAVE community, push a proposal (which gets approved) and pitch it to R1+Harmony. I also suggest that the proposal highlight any potential ongoing value that AAVE might represent for the Harmony ecosystem as a nice sprinkle on top for thought.

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