Recovery One - Community governance for depegged tokens

As I understand it, and even more so today with Tranquil entering the game, this whole proposal is a vast casino gamble, where the dealers are tipped before they even know if at least one of the players has won.

In my world, it is the players who collect the free casino vouchers to make the game a success for everyone: the players, the dealers and the casino.

Good luck with that prank.

With / If:

  1. No personal contribution and very significant financial efforts from @stse and @lij
  2. Contribution from Harmony’s treasury < 50%
  3. Parity < 80%
  4. a ONE reference price > 1.5 cents
  5. a duration > 2 years
  6. a staking rewards APR for rONE < 20%

Run your excel sheets but as it stands, it is still a big No.

Sorry guys but everything else is literature and children’s tales.


It was always a Tranquil bailout, they just didn’t admit it until now. Tranquil is on the team of this. Minus well call it the Tranquil proposal. And how does it feel to be a victim of the hack who would already have received a month of ONE payments from Stephens proposal at a 20% gain today? That means your parity value would have rallied with big upside but instead we will wait for @Pioneer to figure out whatever other project he can get a grant for.


Tranquil is not on the R1 Committee, they offer us advice on tokenomics and are also highly respected industry leading experts and who are a native lending protocol on Harmony. They also created a GameFi project that engages users and which has the capacity to retain and grow TVL. We’re paying attention to metrics and strategy with every single penny, and we’re also vigilant on creating payment milestones for this grant ask in order to ensure that the Tranquil team is financially in-line with the recovery mission, hence their grant asks for a large portion in rONE token. If the recovery plan succeeds, they succeed, same as the community. We’re doing what we can to propose the most dynamic solution to date, and we continue to fine tune and ask for more from the Harmony Foundation.

On grants, you should look into my stance on the grant program’s history. I have been exceedingly vocal about it on the forum and I have painstakingly offered solutions to a more sustainable grant program moving forward. Heck, I even made a YouTube video elaborating on my ideas.

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A monkey throwing darts at a dart board could do better than Harmony grants so you won’t find any argument for me there.

It just seems like this massive strategy to pour millions into new grants as part of the recovery process was really the agenda set at the outset. I have my doubts on that strategy but am not going to keep repeating myself.

I thought this was the best part of the Tranquil grant ask. But see above for my concerns about this new grant program that targets utility - its a slippery slope that is an extremely high priced gamble and offers really no different risk profile than ONE doing well - which if it does, Stephen’s first proposal would capture all the same upside in ONE price except they get the money now. Have you done a present value calculation to compare the two because I will do so when I see your final proposition. Time value of money. Money now is worth more than money in 3 years discounted by reasonable interest rates they can earn on ONE staking v. incentivized rONE staking.

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I see where you’re coming from, but I do encourage you to take a look at my angle on grants (which came waaay before the hack). It might shed some light for you as to who I am and what I do and do not support on Harmony.

I think that there is a misconception here, Stephen’s original proposal did not pay the users immediately, it paid them over the course of three years:

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Well said.

Continuing the discussion from Reimbursement Proposal [Horizon Incident]:

Consider a user from Stephen’s proposal who lost $1,000 in the hack. They will receive 50,000 ONE over 3 years, ~1,300 ONE monthly as part of Stephen’s proposal of 100% reimbursement. If ONE doubles to $0.04, the user captures all the upside. They then got $2,000 worth of ONE if they held the whole time + whatever staking rewards from staking that ONE in any dex, pool, lending, etc. ONE is incentivized everywhere already. Why do we need to incentivize rONE. Under this proposal, if ONE is $0.04, that’s 200% parity value if ONE rises.

Every day you continue on this path, if ONE goes up, they are losing out on that upside unless it was still honored at the $0.02 originally proposed. That same users 50,000 ONE at the price of $0.022 would be up 10% so this months distribution to them was at 110% the parity value they lost.

Can you please explain how rONE is different? Walk us through how that same user who lost $1,000 would fare under rONE. My view is they will only be able to get $0.22 if they rage quit (an 78% loss). Hopefully this price holds up. Of course it could be higher if rONE rallies higher. Or they can stake rONE on Tranquil or other granted projects and hopefully make ends meet. Would it really even be possible to incentivize this more than ONE itself? Or they can exchange it at the end for 1:1 ONE. Is that an incorrect understanding of the proposals?


Glad that you asked,

There are quite a few differences in rONE versus the original proposal to distribute ONE over the 3-year period, which I will do my best to outline here.

In the original proposal, users are able to receive monthly installments on their total debt ‘owed’, giving them access to 1/36th of it’s total value (locked in a rate of $0.02 for the entire duration). This is the entire extent of that proposal. Simple.

However, the issue is not simply paying down on these balances- the original proposal ignores the unbacked assets entirely. With these fractional monthly payments, what would happen to the unbacked assets left on chain? And Defi? The proposal also offered to make payments towards two key lenders, Tranquil and AAVE (but again, what about the others, ie Curve, Celer, and Huobi, which are down 7 figures as well in total). The original proposal fails to acknowledge the burden of the unbacked assets and leaves that up to the users. rONE token, on the other hand, is minted through the exchange of unbacked assets. rONE is a vessel to remove them from the chain (via burning during mint), thereby lowering their supply and boosting their parity over time. The initial exit liquidity is expected to raise their parity level to about 30%, which highlights my next point- R1 proposal is multifaceted, not only are we attempting to provide substantial liquidity for the rONE holders (66% parity at completion + 15% staking rewards + market exposure at all times is expected to be greater than 100% of the lost value for each user) we are also dealing with the unbacked assets in a highly productive way. The more unbacked assets that are burned through our mechanism, the closer their value gets to 100% parity. Therefore, rONE incentivizes free market mechanics, ie arbitrage, on the unbacked assets while also providing liquidity and earning mechanics for its holders.

The original proposal asks for a much higher degree of inflation, which has an enormous affect on the entire ecosystem and all $ONE holders. In order to boast a 100% distribution to affected wallets, the original proposal would print nearly 5B tokens (4.97B) (as opposed to R1 proposal to mint half that figure). This alone is MASSIVE. Anything that we can strategically do to avoid minting new tokens is a huge guiding force to this effort.

To further compliment rONE, we have partnered with Tranquil to incorporate use case via a Tranquil V2 lending protocol, which showcases rONE as the keynote lending/ borrowing asset, and eventually to create a token launchpad that bolsters new token minting while reducing the rONE circulating supply- further establishing lasting value to the token. Last, Tranquil will include use case for rONE in the multichain game, DeFira, which is unique to rONE and that gives it a fresh degree of exposure to gamefi patrons.

On the math side of this, I can create a projection schedule, but it is something like this:

Original Proposal
Today, I give you 1/36th of your total debt owed. Using your example, you would receive about $28 worth of ONE, which has a locked value for redemption of $0.02, so 1,400 ONE. That payment is in your possession and has market exposure.

R1 Proposal
Today, I give you the rONE equivalent of 33% of the value of the balance, with a locked value for ONE at a rate of $0.0264 (this is the snapshot from the hour of the hack iirc). That is about 8-10k rONE tokens. Regardless of rONE’s value in defi, it can always be exchanged via the mechanism for an amount of ONE that increases to the eventual 66% parity at the end of 3-years. Right off the bat, you have both market price action exposure as well as 15% APR (which you can claim), and we’re creating defi options to supplement this, meaning that it can be collateralized and used during this recovery process.

Again, I will try to flesh this out with the help of a true mathematician, such as @Elanu and get back to you with a schedule on what earnings look like over time, comparing the two models.


Well it also gives 86M to DeFi partners. Tranquil is going to have to reset the lending market anyways, they can just do so without rONE in it so USDS, ONE, and others. So they would have gotten their full supplier balance.

Consider a year of this for the $1,000 loss user.

  • Month 1: 1,388 ONE at $0.02
  • Month 2: 1,388 ONE at $0.02

And so on.

If this user burns all of their depegged assets, they will receive $300 worth of rONE on Day 1? They will not receive monthly ONE payments, correct? Just staking rewards and locked ONE which unlocks at the end of 3 years if they burn the rONE?

This is claimed in ONE or other platforms incentivizing staking?

A simple comparison of a user who lost $1,000 under each would clear a lot of the fog on this.

At least, with Stephen’s original proposal (the way you referred it, instead of using Harmony team’s original proposal), I am 5% (plus any amount for grants as you proposed or to propose in the future associated with your R1 proposal) ahead of your R1 proposal. As you have countered that 5% is not $5M, it could be not less than $1M, correct? so, ONE holders is to pay at least $1M + treasury fund for grants? The proposal here gets more lucrative to any business people at the cost of ONE holders. Thank you.

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Yep, addressed the Defi partners in the original proposal above:

Correct, we are pushing for an initial 30% parity (rather than the previous 22%), but introducing a new clause to make the math stand- a ONE rate locked at the time of hack value ($0.0264). User receives this balance Day 1 with no additional monthly payments besides the 15% APR, claimed in ONE. rONE can actually be claimed at the penalty rate (which is linear based on block time progression over 3-years) anytime that there is ONE available to redeem for. Our proposal suggests that ONE be deposited into the R1 governance contract for redemptions on a monthly basis, which smooths out the inflation of newly minted ONE over the course of the 3-years. The APR rewards are not locked.

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Sure, but in actuality ONE holders pay for any expenditure of ONE, given your logic.

5% can be any figure, it is determined by price action on ONE. But as you can see, we’re already openly requesting to allocate a massive amount of those 5% resources to projects (such as Tranquil) that we believe can establish rONE in defi on Harmony as well as trust, as their team is known for exceptional products and are viewed as a trustworthy 3rd party.

User burns $1,000 of 1USDC to mint rONE.

  • Receives $300 in rONE at the prevailing market price?

  • Receives 25,227 in locked ONE unlocked in 3 years lump sum ($660 at $0.0264) - representing 66% of lost value.

Takes their $300 in rONE:

  • Can swap for ONE at whatever the liquidity pool price is (this price is based on a liquidity pool that can go lower or higher as I’ve outlined).

  • Can stake for 15% APR (paid in rONE) on this $300 (value subject to fluctuation).

  • Stakes or lends in Tranquil with it (paid in their incentives).

  • Stake with other grants/projects.

  • Claim an additional amount of rONE to swap or stake with as time progresses under a penalty unlocking model.

Seem like its more or less accurate for Day 1?


Some corrections, but generally correct:

User receives 66% final parity after 3-years- so $666 as ONE (25,227 ).

User can always swap out of rONE in the defi market as you said, or for the equivalent value based on the block time penalty model

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Community Collaboration

The pre-Recovery One efforts began back in July ‘22. Since then, wide ranging discussions including community members, validator, ecosystem developers, ecosystem partners, outside counsel, and financial industry advisors have been constant. On 8/16/2022, those discussions opened to the entire ecosystem to collaborate and foster new ideas and many of those suggestions immediately impacted Recovery One’s initial solution.

Below is a list of community ideas, suggestions, and proposals and the ways they have influenced all versions (including the latest version) of the community plan.

-Proposal 15, the early exit of rONE, capped per wallet to incentivize small community holders. Snapshot date of 6/23/2022 to effectively serve the majority. Increased early exit redemption rate to (50% parity). The raised partial redemption rate to 33% after 3 months from the initial mint date. Proposal sections, “The Recovery Token Mechanics" & “How To Redeem rONE”.
-Proposal 8, commitment to sell BAYC and use sales for ecosystem growth, proposal section “Commitments to the Community”.
-Proposal 4, collaborating with Defi partners to restart Defi using rONE to swap depegged assets for the backed rONE tokens, proposal section, “The Recovery Token Mechanics”, “How To Redeem rONE”, “rONE Use Cases & Utility” and partnerships post talk forum.
-Proposal 7, commitment to releasing a State of Treasury summary and maintaining a transparent and secure treasury, proposal section “Commitments to the Community”.
-Proposal 3, 12 & 13, the swapping mechanics for depegged tokens into rONE and the idea around staking rewards, proposal section “The Recovery Token Mechanics”, and “How To Redeem rONE”
-Proposal 16, inspired the concept of R1 LaunchPad (built by Defi partners) to support ecosystem growth and long-term community support, proposal section “rONE Use Cases & Utility”, and partnerships post talk forum.
-Proposal 1, creating liquidity pools for rONE to maintain price stability and provide value with help from Defi partners, proposal section “rONE Use Cases & Utility” and “Why rONE?”.
Proposal 10, a new token (rONE) that backs depegged assets with an asset of value, the ONE token, proposal section “The Recovery Token” and “The Recovery Token Mechanics”.
-Proposal 5, steering committee members assist in marketing noble causes (efforts to buy back and burn bridged tokens) via past, present, and future action steering members.
-Proposal 9, Recovery One grant program can be used to help with special cases and emergency situations, proposal section “rONE Use Cases & Utility” and “Why rONE?”.

Some of the community ideas, suggestions, and proposals are being incorporated into Harmony’s larger recovery strategy and will work together with the Recovery One community proposal.

Look for more information in the coming weeks about these integrations.

We want to send a special thank you to everyone who contributed and for the continued engagement and the strong and passionate ongoing discussions.


You’ve been quite vocal @MaewouOne with so many reasons to bat proposals down. I’ve yet to hear a viable solution from you. Please suggest some?

The treasury is already less than $50M. To address the mismanagement of the fund, please start a new thread and escalate there all you want, I’d like to help the folks watching this thread focus on a solution, suggest ideas and make that pitch. Saying “No” day after day, and complaining about @stse’s leadership and @lij’s lack of fund management should be taken offline to another thread, maybe even on Reddit.

No hard feelings @MaewouOne, my comment goes for everyone who wants to vent here, but doesn’t offer a solution. Feel free to vent on other social media channels or a different thread. Love to hear more from folks focusing on finding a solution, suggesting ideas, use constructive feedback and come together collectively.

The solution won’t be perfect, there’s gonna be risk, it’s not foolproof, and we’re leveraging creative ways to recover $100M in lost funds here.


We cant offer any solution, cause the teamlead decided they will use basicly 0 of your resources for it, no loans, no vc funding and little to nothing of the treasury.

So now the community is supposed to do your job and find ways to create 100 million dollars out of thin air?

Btw. what solution is @stse working on atm?

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For example, @mindstyle was constructive here in quoting these

Quick answers

  1. True, Horizon was step #1 towards the Trustless ETH Bridge which was nearing launch before the hack; if that were to launch, it’ll be like the Trustless BTC Bridge run by validators,
  2. @stse and @lij are still supporting this from the Treasury perspective and asking questions behind the scenes being concerned founders of the chain, and we all hope to resolve this really complex issue. The monopoly analogy is fun to hear but the reality is still really harsh.
  3. Yes, the treasury is being put to work to kickstart the recovery (around $2.4M worth of ONEs at $0.02?) for the first 6-months, and replenish bad debt in non-Horizon bridge-related partners (several million more, will edit here when I find the numbers),
  4. So far, no VCs have stepped up to help. My guess is besides qualitative factors, mathematically there’s nothing to exchange for their money – no equity from an Incorporation, all are in Treasuries, which is less than half of the hack… so, there’s no medium of exchange? @stse can comment here

Thank you for the transparency. Can you please update the thread with whether or not any treasury allocation was going to be applied to Stephen’s proposal. It appears all of the ONE used to reimburse under that proposal was coming from the minted supply and not the treasury but under the R1 plan, much more from the treasury was being utilized upfront for grants, liquidity and governance. Given we are nailing down the bullet points of each proposal, using this ~$3M towards a higher parity with still only 2.5B minted would considerably improve Stephen’s proposal and bring it closer to a 66% parity as would be the case here upon the 3 year expiration.

@stse and @lij can use the entire $40M-$50M, maybe a bit more from other assets, but that’s still under $100M. Everyone will cash out and walk. The Harmony team can basically shut down and we’ll be a chain which could be fully driven by the community from that point on. My hunch is that it’ll lead to a “slow death” chain from there onwards.

So far, it’s a few million USD worth of ONEs to be deployed from the Treasury to kickoff rONE and plus several more million to recover bad debts on several bridges offered by DeFi platforms like AAVE and Tranquil.

@babakajone :pray: yes, it’s a mix of Treasury funds and 2.4B ONEs minted over 3 years (total supply is 12.54B right now) … yes an improvement over the initial proposal from @stse, but still has its risks and imperfections.

There are already talks about proposals in addition to rONE that is meant to increase the chances of success for this recovery, utilizing rONE’s mechanisms put in place


Ok to deal with the managerial failures of your bosses in another thread.

Regarding the proposals we should make, I confirm you:

  1. as other members of the Harmony community have reminded (better than me, English not being my native language), the means of reimbursement of my stable coins, unfortunately hosted on the Harmony chain, are not my responsibility but yours. We have transferred millions of net TVL to your chain that should not be subject to any volatility, let alone theft, due to your negligence.

  2. contrary to what your post implies, we are more than willing to support the efforts of the R1 committee and their proposal, but on different financial terms than those imposed (parity, ONE price, redemption, schedule, APR) that have been reiterated many times. Refer to my multiple posts if needed.

Finally, sorry to have to remind you, but we are not friends. We are here as investors who believed, in your model and your capabilities, but who now find themselves cheated and to whom Harmony is addressing in a somewhat light and irresponsible way, when confronted with a 100 million dollar (100,000,000) sinkhole.

Thank you