From Twitter: Recovery round 7 for the @harmonyprotocol lasted 15m on the ‘new’ R1 exchange, being drained by bots and an R1 member prematurely.
I feel like R1 has done a great job keeping the community together and communicating how things are going. But I’m starting to question the value of the recovery exchange mechanism. I guess the above twitter thread made me post this.
The market price of 1USD at the time of the last round was around $0.085, and the R1 exchange rate was $0.105, so they’re paying over 20% more than necessary to burn the assets. All that’s happening is either people or bots are buying the assets at $0.085 and then burning them at $0.105.
I don’t really mind the ream getting paid to communicate, because it does add value. But what is the value of the above mechanism?
We’ve got around 3 years of this process left, and I think it’s progressing well overall.
This round in particular the gap between what we’ve paid to burn vs what we have to pay seems too large. Over the course of 3 years like that it might end up costing an extra million or more. Is it worth evaluating that now?
Agreed. This is a known issue that had already been resolved in previous rounds. It’s quite frustrating that the R1 team allowed this issue to once again negatively impact the exchange process
Each member of R1 is paid $1k each funding round to perform and to serve. Round 7 was announced as funded at 12:40pm PST. Matt exchanged depegged assets beforehand with an alt. Check his multisig wallet that funds it:
Multisig wallet: 0x8BD1144C615aa43A0a8A1071E64dD68835cd4c6B
Alt: 0x65c2B6541f4bda83Cf435Fb46195F6f5481a5fA1
Yeah I saw that but I’d like to hear his side of the story before getting my pitchfork out.
I mean did someone text him and say ‘yo, it’s funded now’ then he exchanged before the tweet came out? Or did he exchange first then tweet straight after? If it’s the latter then it’s pretty bad, if it’s the former then it’s still not ideal but it’s more understandable.
Will be pretty easy for him to prove if it’s the former, so I’ll wait and see.
Either way, I think the fact that they’re providing an exchange so far above market rates is what’s creating these problems. It’d be so much simpler and more efficient to just buy and burn like tranquil is.
Recovery round 7 for the @harmonyprotocol lasted 15m on the ‘new’ R1 exchange, being drained by bots and an R1 member prematurely.
lol. so there all recovery payments from harmony are going
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“Did someone text him”? LOL what? The R1 team receives the funds from Harmony. They are the ones who know when it’s funded. You are literally asking, “Did Matt text himself?”
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Even if “someone texted him”, it is still not “understandable” for an R1 member to pre-empt the public announcement of the exchange being funded. That is highly unethical.
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To my knowledge, Matt is the one who does the tweeting from the R1 account. So he literally - personally - exchanged and then tweeted it out.
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Where are @stse @lij @Casey @theo1 - and @mbarret3 - on this issue? THE SILENCE IS DEAFENING!
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Has the R1 team been doing this every round? I can’t even begin to comprehend the b.s. that’s going on. Harmony pays the R1 team - despite having NEVER paid numerous DAO governors - and the R1 team is unethically using the Harmony-funded recovery exchange to profit off the exchange prior to publicly announcing the exchange is even live?!?!
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I’m sure zachxbt will love this!
Well, this one will be fun to watch, prob even funnier than Harmony’s April fools joke.
Yeah you’re probably right on all those points, and come to think of it, if I was the one running the recovery exchange, I’d only be burning at the end of the rounds once there had been a good chance for everyone else who wanted to, if at all.
I just don’t understand why he would pull such a thing when everything is on the Blockchain for all to see.
A Few Recovery Updates:
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R1 is collaborating with Harmony to address Aave’s bad debt. We are seeking insights, solutions, and ideas. Please contribute via the Google form at
http://RecoveryOne.community. Share your solutions for Aave’s debt resolution. We are hoping for a practical solution. (The form closes on April 28th). -
I noticed a post here discussing the test transactions from my main wallet on Recovery.Exchange. The Recovery.Exchange V2 went live this round. We conducted a few tests before funding to ensure everything functioned properly, and one test after we funded the Recovery.Exchange on April 11th. I performed one test to confirm that the exchange was working properly before making the public announcement on R1 twitter. We funded at 3:39, my test at 3:39, and R1 Tweet Announcement at 3:40.
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The R1 exchange rate on Recovery.Exchange V2 is 0.105, Modulo is at 0.108, and Tranquil is purchasing from DEXes at market price.
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R1 is building our verification and contract detection for Part 2 of Round 7.
R1 remains focused on the recovery of depegged 1Assets and the strengthening of the ecosystem.
Lets agree on two ‘tests’ prior to the announcement that the exchange was funded 
That’s in addition to the fact that it was tested an hour prior by Quoc:
The connection to recoveryone.community is not secure
You are seeing this warning because this site does not support HTTPS
(after losing your funds good opportunity to get some credentials stolen too)
We cannot compare Modulo rate and the R1 one, based on the different approach of these systems.
In practice 90% of the exchange on Modulo occur at or bellow current market rate which make it and made it the most efficient burning mechanism so far.
In my opinion R1 should adjust its rate depending on the current market value at funding time, providing a current market rate. If needed and funds are still in the smart contract after 1-2 week we can choose to offer a premium of 1-5% to incentive the burning mechanism.
In that way we are ensuring the maximum amount of recovery for each round. Offering a 10+% premium on each round only lead to a waste of funds (funds available through Harmony is already very limited, and we are not on track for a 4 year recovery plan as announced), and leads to an empty smart contract after a few minutes.
Providing market rate through R1 will drastically remove bot presence and enhance community activity without even needed advance bot detection methods.
I don’t agree at all.
If R1 was going to offer an exchange rate at the current market rate, there would literally be zero need for R1 to even exist:
- Holders could just sell their depegged assets on Dex for the same price.
- The R1 funding could go to Tranquil to continue their buy&burn at market rate.
- Harmony would save several thousand dollars each month no longer paying R1 members who can’t even set up the exchange properly to prevent it from being drained in minutes.
Modulo is for arb.
Tranquil is to help fix its defi.
R1 is for the community, the people, the individuals.
It enables holders to earn a small “profit” each round, through which, over time, they will hopefully have regained most of the 90-95% loss in value they sustained due to Harmony’s bridge exploit.
- Even at market rate, R1 will never be like a DEX because it offer slippage free exchange even for large amount. Which is important for recovery due to low liquidity available through the DEX.
I dont think it’s helping the community to offer a 10% premium and “waste” funds that could be allocate more efficiently. Even at market rate exchange R1 is still profitable for user and community due to slippage free exchange. So it will still incentive the user to swap here and not on DEXs.
I dont necessary claim that R1 need to offer market rate, but lower the premium. I mean if smart contract is empty in a minute it’s obvious that offer and demand is not aligned properly.
Offering a market rate a funding time and increasing premium if funds are still available seems to me the optimal solution to aligned offer and demand and make sure every penny is efficient in the big picture of the recovery.
That only happens because R1 screws up the round. There have been several rounds that weren’t immediate sell outs and actually went smoothly. The several rounds where funds were immediately drained was because R1 was careless/thoughtless.
Again, if your only objective is to burn depegged tokens as cheaply as possible, then R1 is entirely unnecessary. But that does nothing to make whole the holders who lost 95% of the value of their bridged assets due to Harmony’s negligence. It completely negates the initial objective of the recovery which was to return value to the individuals.
We welcome the discussion regarding the exchange rate, we want more of it as it will influences the rate on the recovery.exchange.
We are also looking forward to helping the AAVE community get involved in the recovery process, if not now, then at some point during the process. Here is a link to their forum: ARC: Harmony Recovery - #144 by Tobes - Governance - Aave.
My only objective is the re-peg of depegged assets, and it will come by burning the max amount of assets and slowly raising the global market rate of stablecoins and others.
I think that’s the only realistic way. As we burn more the circulating of depeg asset will drop and the rate will raise. People then can choose at which rate or how long they want to wait until exiting the market.
Don’t imagine that R1 will raise the rate slowly to 1$ without the global market moving with it through arbitrage between recovery partners and DEX. The game here is bigger than just wanting a low premium for community satisfaction, the only path forward is working together into the same direction which is removing the most deppeged assets in circulation and pushing the rate higher.
Again that’s my personal opinion and vision.