Recovery One - Community governance for depegged tokens

Q&A Session

Twitter Space scheduled for Friday, August 12th at 9PM UTC – https://twitter.com/i/spaces/1DXGyDqkongKM (moderated by @StrongMindsHold)

We will also respond to questions from the forum during that call.

What this is: A request for voters to use the Recovery ONE governance token to vote and make proposals that are community backed and voted into action. We have the support of the Harmony Foundation and are ready to rapidly create snapshot votes, audit smart contracts, deploy them, and launch a UI that enables any approved proposals made by our team.

This will be followed by a vote, which will decide whether we proceed to make proposals that are aimed at restoring DeFi on chain and resolving the issue of unbacked assets.

Formation of Recovery One Foundation - community governance for depegged tokens

Our story

Soon after the initial reimbursement proposal was made public, there were tense debates on how Harmony should move forward and reimburse users. Out of that Matthew (community member with finance & sales background) and Quoc (contributor, fmr DeFi founder) met through an introduction from Giv and Jack in an effort to discuss and further develop other ideas. Early collaborator Pioneer (HarmonyVillains validator) joined our team to support our cause and help build support with validators. Since then, we have been discussing actively with members across the Harmony ecosystem such as Harmony Core team, Tranquil, StrongMindsHold, Tim P, JL, Dragon, and many others.

Harmony, at the highest level, has expressed support for a depegged asset recovery through a community governed effort, including the management and disbursement via non custodial contracts. In that effort, we see ourselves as organizers, facilitators, and stewards of the recovery process. The decision & voting is decided via snapshot voting by the community members.

After consultation with legal and many considerations, we decided to formalize the formation of governance to provide affected depegged token holders voting rights, further open our proposals, gather support, place proposals up to vote by our members, and execute on them.

Governance

TBD after an official vote to form Recovery ONE

Mission

The recovery of depegged assets, and the strengthening of the Harmony ecosystem through a community governed action.

Purpose

The structure promotes collaborative action. Committee members 1) create proposals with community input and facilitate discussions and initiate the voting process with its members 2) provide grants to take on problems and build solutions.

Membership

A smart contract enables users to stake their depegged tokens for governance tokens (rONE) and unstake to receive depegged tokens by burning governance tokens.

Structure

1.) Steering Committee (5 members) - responsible for take ideas and turn to proposals, and approve grants

2.) Grantees - contract to build, market, and engage with community

3.) Active members - actively engage by providing proposal feedback, ideas, disseminating to the community and voting.

4.) Non-active members - owns governance token but do not vote

Steering committee

  1. Quoc Le (Chair) / Harmony contributor, ex founder DeFI, and 20 yrs experience in tech.
  2. Matthew Barrett (Co-chair) / Harmony community member, experienced in finance & sales.
  3. Logan / Harmony Villains validator, experienced in OSInt, Business, and Reporting.
  4. [open] / Defi partner
  5. [open] / Harmony core member

Members Voting

Every proposal starts with an idea, which is vetted with a committee member who can be a sponsor. The job of the sponsor is to help you present the plan in a well-formed language, validate the data & assumptions, in order to move it toward proposal. The proposal is discussed with the community and further developed with the committee guidance. Then the proposal is made public for discussion and if no major issues arise, the date of the voting is announced.

The proposal is posted on a snapshot for voting. If more than 75% of the vote are in support of the proposal, the proposal passes.

Contract Specifications

Staking is similar to Defi staking for LP. In this case, your LP is your governance token. Voting is done via snapshot.

Funding

Future funding will be derived from the management fee for the recovery.

What’s next?

  1. Smart contract reviewed by our partners, and audited by xxxx (done by …).
  2. Launch the governance contract on mainnet (immediately after audit complex)
  3. Launch of proposal github project (similar to EIP)
  4. Develop Recovery proposals with community feedback
  5. Public discussion, and move for vote

How to get involved?

We need your help in sharing our effort, and inspire new members, and collaborators to join…

Reach out to any of our committee members below:

Mathew Telegram: Telegram: @mattbarrett

Logan/Pioneer Telegram: @HarmonyPioneer/ Twitter @HarmonyVillains

Quoc Telegram: @cryptoQuoc

Join our Twitter: https://twitter.com/recoveryonefdn

Join our Telegram: Recovery One channel

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Sounds interesting. And there should be some potential to devise some interesting ways via governance to recover value here for the affected 1assets, provided of course that Harmony is willing to fund this via their treasury(which I suspect they are judging by one of Stephen’s recent video messages).

But to be clear here from the start just so we can avoid confusion down the road, the last proposal from the team specifically outlined the assets on the bridges that were affected and stolen, correct? These would be the ones under proposal for reimbursement as both bridges are still full of 1assets that people hold on Harmony that are still fully backed 1:1 on the bridges. But of course since the bridge has been closed they’ve been held under the custody of Harmony while investigations take place and such, which is understandable to a point.

But legally speaking I can’t imagine Harmony as a US based entity could do anything other than redeem people’s unaffected assets for them as soon as their able. They gain nothing by holding on to them in an illiquid bridge, especially while virtually all of the unaffected assets have zero liquidity on Harmony itself putting the people who relied on the liquidity of Harmony’s bridge in a bad spot as well. The idea of passing off control of the unaffected assets to a third party seems pretty absurd and just so I’m being clear I’m not accusing this group or Harmony of doing this, I just would like some clarity here since unless I missed something, it’s not explicit in your post here. Yet the original proposal explicitly outlined and accounted for each specific 1asset affected by the theft. And of course it’s all on chain as well.

A lot of people are stuck with the unaffected assets, but other than the acknowledgement in the original plan of the list of affected assets, I think people have been patiently waiting for a timeline on redemption but haven’t received any information so far. This doesn’t make it any more clear but also complicates your job even more by adding a potentially contentious issue on your plate from the start. So hopefully we can get some clarity here from Harmony regarding that if possible.

Thank you.

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Looking forward to the discussion on Friday on Twitterspaces. Post your questions here as a Reply to the thread. We’ll gather them and discuss it during the Friday call

Twitter Space scheduled by @StrongMindsHold on Friday, August 12th at 9PM UTC – https://twitter.com/i/spaces/1DXGyDqkongKM

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Looking great :+1: so far. :confetti_ball: keep grinding ONE fam …:muscle: :blue_heart::muscle::blue_heart::muscle::blue_heart::muscle:

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Me: currently holding $2,000 in link and ygg, and could not agree more.

I know you guys have bigger issues, but please open the bridge.

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Is it possible to get a figure for available funds to work with from treasury. I remember they offered $10M to recover the hacked funds. Would this be available for us to work with?

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Will @stse and @lij join the space and listen to their community ?

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You are right. Especially the idea of “passing control” to 3rd party developed smart contracts, I’d prefer something more official and less DAOish lmao.

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Harmony core team tried to make anyone else pay for the hack other than themselves. It’s their fault so they should pay up, stephen tse and li jiang should liquidate their portfolios and properties and add it to the recovery fund. 2/5 multisig is criminal negligence.

Wait… so there is no vote on who is on the committee? Do these committee members get paid? And if they do how much?

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Amazing groundwork, thank you. A very promising mechanism for building solutions.

My #1 question is probably the hardest: what legal obligations or sensitivities do we need to keep in mind when deliberating on the chain’s path forward? These could be fiduciary, regulatory, investigatory, civil/criminal liability, etc. Obviously hyper-sensitive but important for us to at least understand the broad contours so we can provide constructive ideas and feedback.

Q2: related to #1 above, what are our options for ordering repayment of depegged assets? For example, could 1ETH and 1WBTC be prioritized to get ahead of the next market cycle that could see those values spike? Obviously a number of problems here esp. with arb, safe harbors, etc.

Q3: what factors or metrics are being tracked by the team or community for rebuilding DeFi and reopening the bridge? USDS/functioning stablecoin is obviously a big one. Is the team open to partnering with projects or other chains to build on this? For example, creating cross-chain liquidity for depegged assets or the Recovery One token that might allow decentralized outside investment in the chain’s recovery / ongoing governance?

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Unfortunately the 10M bounty would have been offered from the stolen funds, and would not have been an additional 10M. Where we stand right now is a very different place, post-hack, and usage of the treasury must be carefully considered for the overall longevity of the project.

That being said, we have an allocation from the Harmony Foundation treasury to support future proposals, and we will continue to work towards gathering the financial support from the core team.

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As much as we all wish to hear from them and for them to show some face, that is not on the agenda. Instead, we are going to outline a different approach that allows the community to get behind supplemental proposals and a new governance model that pertains specifically to the unbacked assets.

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Sounds like a good approach. Thanks for putting this together.

Questions:

  • Who votes if R1 is established?
  • What’s the estimated cost of establishing & running R1 till resolve? (governance, legal, development - hours & fees over 2-3 months)
  • When do you expect the first R1 votes to take place?
  • Why is there no official statement by the core team?
  • Any comments on the timeline would be great (optimistic & pessimistic estimations on when all could be resolved)
  • Any way to include the affected lending platform holders (folks who got their one locked on AAVE, for example)?

As someone who’s directly affected I appreciate getting voting rights. I’m a bit worried that this could really prolong a resolution. I feel like the most important thing is to get DeFi running on harmony again. Let’s hope for the best.

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Believe me, we would all have preferred an amazing plan that is well executed from the core team, but that is not what has happened and instead we are attempting to rally the community and organize in order to give unified voice to our needs and a suitable plan.

This is a tough situation for everyone and it is a massive figure to chip away at. Ideally we can find a way to get as much of the stolen value back into our ecosystem (over time) as possible.

Regarding DAOs, I know all about them and honestly, had the core DAOs been created, supported, and managed properly, they would be absolutely paramount to the organization and execution of community-backed plans during this time. I do not aim to form a DAO due to the lack of support, infrastructure, standards, and bad connotation and specifically support this team as a community project that needs leadership in order to establish itself.

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The Harmony Foundation has failed us, in a way, but right now they are extending a hand to support a community-backed approach at solving this through proposals. Ideally we can come up with agreeable solutions for the whole and the Harmony Foundation can rebuild its treasury and chip in over time. The better off we are as a whole, the more buying power the treasury has to help. We just need a push start and we can get the ball rolling again- or at least that is the idea.

I am not going to defend the previous security practices, but I will say that I encourage the Harmony Foundation to restructure their personnel that were responsible for that security area.

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Hey, nice to see familiar faces chiming in, you always have something valid to add to the conversation.

Right now there are only three of us, as outlined above. We are all doxxed, and there is room for at least five chairs total. The only reason that we are proposing this structure is because without leadership or organization nothing will happen. We are also under the advisement of Tranquil Fi team member.

The matter of payment will come down to a proposal and vote after we can determine whether the community chooses to adopt this governance token/ method. We’ve come together to try and give organized voice and direction to the community feedback and to gather leaders from various backgrounds that can advise on strategic paths forward that are multifaceted and able to be built upon.

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Hi @shwaver,

Nice to have your feedback here, you propose some great questions. I can’t answer question 1, as that is a question better suited for the Harmony Foundation, maybe @Jacksteroo would be so kind as to give us a transparent answer?

Q2: This is a great idea, and I can say that we are very focused on restoring DeFi on chain. The idea has so far been more of a blanket statement that works towards removing unbacked assets from the chain and restoring/ gaining a/ or multiple stable coins. We want to address the unbacked assets without favoritism, and I get that the market cycles encourage otherwise. The issue is that if we lean too heavy towards an asset, as you pointed out, we’re likely going to suffer from extensive arbitration and even foul play (ie front-running, insider trading type scenarios, you name it). That being said, I will jot this down and see if there are any areas that might benefit from a priority of order standpoint. If you have any in mind that are beneficial to restoring DeFi please let me know, as this is a super collaborative framework that only has leaders in order to take action on the voter’s behalf.

Q3: At the start, we raked in ideas from everywhere. We wanted to compile as many paths forward as possible, and to consider the problem from many angles. Many of the solutions came from this forum, Twitter Spaces, Discord conversations, other blockchain hacks as examples, and also the Validator meeting with @Jacksteroo . There were many ideas and the point here is that much of what we will propose came from the community and was adjusted to minimize minting (which was very poorly received), establish a store of value that is sustainable, maximize treasury dollars without crippling the chain, etc.

We are paying close attention to what the math tells us and formulating plans that fit within that structure. Once we have identified those major figures, we try to work them down through introducing supplemental plans or tabling ideas that might improve our timeline once we are in a better place. Some of these projections are very hard to make decisions based off of and would be better left undecided until we know what direction the main proposal takes us. I hope that is not too vague.

The team is absolutely open to partnering and that is also the reason that we have allocated a treasury for Recovery ONE (R1). We can potentially issue grants and provide liquidity in-house, without dependence to the Harmony Foundation. However, we do hope to work hand-in-hand with the core team and to have their full support moving forward.

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Hi, thank you for your questions.

  1. Anyone that stakes their unbacked assets and receives rONE can vote. R1 is technically established, however we are working towards establishing the governance and participation now.

  2. We haven’t projected costs because we are spending our personal time to do all of this, as we have been for the past 1.5 weeks. Also, Team member Quoc is a very capable developer that can handle smart contracts in a swift manner. Costs of smart contract audit range from $700-2000+ with a one week turn around. Plus infrastructure costs of hosting a dapp and building the front end, which again can be done in house. I presume that the Harmony Foundation will cover any and all legal fees, as they have been. Beyond these things, we would later propose either a salary schedule or approved hours and bring that to a vote. The treasury will be in a 5/9 multisig to avoid any collusion and the team members (thus far) are publicly doxxed.

  3. The first R1 votes will take place (dependent on positive community feedback) within two weeks, ideally much sooner. We need the approval towards R1 governance (which is non-committal, it simply allows us to produce a governance structure, token, and smart contracts/ UI) and then we will immediately get started.

  4. I cannot speak for the core team, although I do encourage them to speak. @Jacksteroo has been a monumental help throughout this entire discussion and I hope that he will continue to show his support and give his time. Also, their MarCom lead just left the chain.

  5. Our timeline is very dependent on voting timeframes and contract audits. Beyond that, we have been working around the clock to create documents and meet with different teams in order to come up with solutions and potential partnerships. I would say that by the end of September voting should be finalized, smart contracts audited and deployed, and a dapp launched. That’s conservative and can be accelerated depending on how long the votes are held for.

  6. Affected lenders are being considered and are supplemental to the main proposal. We are working closely with Tranquil Fi, Harmony’s native on-chain lender, towards favorable solutions for R1 and DeFi restoration.

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