Recovery ONE: Burn Phase
As Harmony’s Recovery Plan enters into the new burn phase, R1 remains resolute and committed to the recovery of depegged assets, and the strengthening of the Harmony ecosystem. The latest proposal from the Harmony core team uses treasury funds to target 100% participation and 100% reimbursement of 1Assets over 4 years while maintaining 0 minting. To initiate this strategy Harmony will provide grants to partners that create mechanisms to remove and burn liquid 1Assets from the Harmony ecosystem. The larger multi-year plan implores strategies to build tech, attracting new daily active users, unique wallets, delegates, partners, and the trust of our community.
What is Recovery One’s approach to the new recovery and burn parameters?
To begin, we know many 1Assets are not held in the wallets of the asset holder but rather are in Defi protocols and in DEXs. We also know many 1Assets are not in the affected user’s wallets, having been already redeemed for less than parity as a means to exit. We understand that approximately 50% of 1Assets holders purchased after the bridge incident. Most importantly we realize many individuals that held 1Assets before the incident, still hold and want their full funds reimbursed. We have considered all of these dynamics and we will address each one in time.
Recovery One’s initial action will be to drive liquid 1Assets toward burn mechanisms. Collectively the partners will implement different strategies to remove depegged assets at low cost, thus incentivizing the market to participate in our recovery process. Consequently, this new supply and demand dynamic will drain the liquidity of 1Assets to affect the trajectory and value of these assets over the 4-year time period. These strategies target the long-term 1Asset holders with a 100% reimbursement.
Round 1 - The Recovery Exchange
Recovery One will receive an initial USD 50k / month budget in USDS to assist with the recovery and burn phase. That grant will be put to work through the Recovery Exchange where 1Asset holders can exchange 1Assets to receive USDS. The first token that we will be reimbursing is 1USDC token. The Recovery Exchange will have two exchange rates.
The Recovery Exchange:
- Non-rONE Voter
- 1USDC can be redeemed at a .07 for all users, limited to $1,000.00.
- rONE Voter
- Users who voted with rONE are eligible to redeem 1USDC at $0.10 immediately, limited to $1,000.00.
- The exchange will remain in effect until all $50k of the available funding is utilized or Round 1 ends.
- We will collect data, such as participation, unique wallets, amounts redeemed by wallet, and amount of depegged assets burned to influence our redemption decisions for Round 2.
- Recovery One expects Round 2’s 1Asset exchange rate to be higher via Harmony’s burn parameters and 100% reimbursement target by year 4.
- Recovery One plans to increase the wallet limit to $2,000.00 USDS for Round 2.
Please visit the Recovery Exchange
GitHub Exchange Contract
What is the Recovery Exchange?
It is the updated r1.fuzz.fi destination for present and future Recovery One initiatives.
Why not have a higher parity value for users?
We need to focus on doing more with less early on. We can raise the parity level by clearing low-cost 1Assets that exist on the market by incentivizing redemptions profitably. This will use the free market mechanics to push the parity level up over time while simultaneously reducing the circulating supply, as we burn directly through the Horizon bridge contract.
Why give particular preference to users who voted with rONE?
Recovery One was conceived to represent the community and secure the best deals for the redemption process. We stepped in to aid the recovery process and we provided complete documentation of our intentions regarding how we plan to issue redemptions. Although we can no longer work with newly minted tokens as funding, we have always sought to bring value to the Harmony community- starting with active users who vote for ecosystem change and who voice their needs. We have heard each and every member of the community who took the time to give their opinion on the recovery process. This is our way to show rONE users our commitment and to start the recovery process as best as we can with the amount funded. And we will do better as time progresses.
Disclaimer: Nothing in this post should be taken as financial advice.