Jacklegs @stse and @lij already threatened the community with “no reimbursement”.
I’m very much concerned if this proposal dies, then all recovery plans will subsequently die as well. And then, well, Harmony will also be dead if there is no recovery and no defi on-chain.
And yes, I fully understand that the 2 aforementioned jacklegs are doing everything they can to abdicate any responsibility or liability.
I think you presented a very fair take of the situation in the last few posts so I will attempt not to be repetitive and I would give Matt and others the benefit of the doubt to answer my questions already posted here as well.
Alternative Proposal
We need to come to terms with Stephen Tse 1.0 and if they could just absolutely maximize the treasury utilization with 100% of all funds (the inflation, treasury allocation, and anything else that can be included such as a BAYC auction) will go to improve Stephen’s proposal. Everything they can to improve either the repayment time or reduce inflation. 100% to the victims in ONE at the highest possible reimbursement rate with repayment beginning immediately approved by a snapshot vote of ONE holders. It’s the best we’re going to get. And it provisions 86M ONE for AAVE, Tranq, etc.
Hey @Jacksteroo , didnt notice your post before. First of all thanks for being transparent with the treasury, and since youre the only one that actually responds here, ill direct most of it to you, but dont take it personally. Its just that the main 2 people that should do their best to get this fixed arent even responding, which is kind of sad, right @stse @lij ?
Will make it in points so its easier to follow:
There have been a few plans with a synthetic token (or newly created one that represented debt basically), but most of those worked because there were some direct fees being generated, eg LEO and Bitfinex etc. I would still like to see some research done on how others did it and i dont think this proposal is anywhere near as good to even put to a vote.
rONE is just an inflated ONE token, and as long as theres inflation, its not really a (good) solution… transaction fees not getting burned would also mean inflation, which would also be bad, as it will dillute everyone, even those that arent affected by the hack (at least directly) - to note i dont hold a significant amount of ONE anymore so its not like im defending my own portfolio here.
The treasury is still quite significant. You talk about a 3 year runway, let me explain something to you. Our treasury for P-OPS was in 1USDC on Harmony and we got obliterated on that front. So now we all basically work and even fund ourselves from personal funds + sell some rewards that we really dont want to, just to keep going. Does Stse need his high salary for the work he has done? I would say no. Does Li deserve it? I would say no. Why is no one talking about the possibility of pay cuts and leadership not even getting paid? If you believe in the project, make a sacrifice yourselves, for the benefit of Harmony and its community. Thats how a larger part of the treasury would be available for re-pegging the hacked assets.
Like any proper business, VC ties are important. Where are they and why werent they put to use here? There have been many cases where funding was possible, and probably still is. Projects like Polygon did raise more money during the bull market, why didnt Harmony? Why arent you putting more effort into finding someone that would be ready to add to the treasury funds and make victims whole? Not to mention it would restart Defi. The longer you wait, the more dead the chain will be, unless thats what you want? I know you would lose some control in Harmony (especially Stse with his majority, but like i said him losing that is a REALLY good thing). Current market makes this a hard feat, but def not an impossible one.
In the end, no matter what some say, you guys were custodians of the assets in the bridge, it was not trustless, so you are responsible. I would like to see more effort put from the team into this, as it was your lack of security that lead to this.
I would say its high time to get something real going, not some rONE token thats just more inflation that will hurt much more people than just those that lost money in the hack. Thats overall even worse for Harmony in my eyes. And with all this debating and letting community put up proposals is just more time wasted, more projects dead or leaving and more users gone that might never return. Dont forget that the whole ecosystem is basically at a standstill so the speed at which this is going is incredibly bad. Other projects made good reimbursement proposal in much much less time. Its time for stse and li to own up to all their mistakes and start to think about the greater picture, not just themselves and their runway. Sacrifices need to be made.
Hi, thank you for P-opping in and sharing (I couldn’t help the pun).
I would love to hear more about what you know regarding synthetic token strategies that we may be able to implement in this recovery process. AFAIK, the Bitfinex hack (worth $72M) was a significant show in a successful recovery process, where they were able to issue a token (BFX) and buy themselves enough time to seek investment funding for the eventual redemption at a 1:1 ratio. According to my research, this process took 8+ months, but they were able to make their users whole. To show their commitment, they began a slow buyback of the BFX debt token (about 1% from the circulating supply) and literally traded their way towards a more favorable financial situation. Also, the market was entering the bull run of 2017, where BTC went from $900 to $17,000, achieving its record breaking ATH of that time. Albeit they only rode BTC up slightly before having raised enough capital to make this massive recovery possible, I thought that it be appropriate to set the scene for what the financial markets were like at the time! An outstanding story and one very much like our own. It should be noted that this recovery situation is very possible for Harmony, given the time passes and we are also graced with ‘record operating results’, as Bitfinex did at that time! It is not outside of the realm of possibility that Harmony achieves new heights and their treasury be in a more suitable position to make their users whole again through the buyback of rONE. Bitfinex issued their debt token and did their best, and we are doing this in similar fashion, with many defi utilities in place to bolster the usage and desirability of our token. As an aside, the LEO token success story was a years-long journey that relies on the US DOJ and is still technically unresolved until those BTC are in Bitfinex possession and appropriately distributed back to the holders/ victims .
rONE is a placeholder for a future value and it is also a defi utility token, as well as a governance token. Sure, it is inflationary on day 1, and it has an impact on the entirety of ONE. We could instead ask for an IOU token that has nothing to do with ONE and the Harmony Foundation could try their best to buy them later? I’m not sure if that is your suggestion here.
The treasury is around 47M. Our most recent proposal ask is to utilize 5-7% of that in order to bootstrap the recovery process by offering initial exit liquidity to the majority of the affected (smaller) wallets. Additionally, our defi lending partners have varying needs that will be addressed on a case by case basis, and which is likely to require additional capital resources from the treasury (this is only a proposal and is yet to be an official commitment). Otherwise, I agree with your sentiment that strong leaders who believe in their project should be willing to make meaningful sacrifices. I do not know their personal financial business, but I do imagine that they can afford something like this, to at least some degree. Keep beating this drum and maybe we’ll make headway.
The concern about approaching VC at this point is the equity requirements and the expected ROI, which would ultimately lead to further centralization and a debt to the investor that would ultimately be paid by the community. It could go another way, but from experience, most VCs expect ROI and equity. I agree that the time which has passed was costly on the ecosystem- many valuable projects have and continue leave, the ONE token is faltering, and even members of the core team have departed. All that being said, I see a strong community that is dedicated to seeing this story through and I remain here as a member of the R1 team in order to do my part to make a difference, if I may.
Touche
In final regards to the rONE token, please review the most recent documentation and look forward to our latest update, which should come no later than next week (we’re aiming for sooner, but that is dependent on other parties and a smart contract review)!
hey! nice punt hehe, as for what you wrote:
Yeah Bitfinex was also unique as the fees they generated wasnt any kind of inflation but their revenue, so it was easier to construct a reimbursement plan. Unfortunately i cant remember most of the recovery plans, but if you guys have a dedicated team i think some googling and twitter searches would bring some up. For example one is here, albeit a bit different since it isnt a layer 1: https://twitter.com/PancakeBunnyFin
Well, i dont really see any of these as a good way out, or to kickstart defi back up tbh. Its all some promise that something will happen in the future, but it doesnt really solve current depeg issues, so i have my doubts if that would be enough to kickstart defi again.
5-7% is way too little given how much they have and given that they are solely responsible for the loss of funds. It wasnt a smart contract breach, it was their access to the multisig. If @stse and @lij put some actions behind their fluffy words and really believe in Harmony, they should really put up way more.
Well, VCs are a part of basically almost every blockchain project, and they are/were in Harmony too, so i dont see any issue with trying to make a deal with them to save Harmony. Its better someone saves it and earns some money from it, than if the whole chain just slowly dies out (which is what is happening). What worries me is that i dont see anyone on the team capable of actually brokering a proper deal (stse would just rather keep it all to himself, and li isnt really the right kind of person for these kind of talks)
I really appreciate the proposal you guys did, but this is not something that they should completely leave to the community to solve, because right now it just looks like they are finding their own way out of this mess and laying it all on the community. We should hold them accountable, as its the right thing to do. You screw up, you fix it, not lay it all on others.
All in all, i dont believe any proposal other than fully replenish the bridge, would kickstart defi back up in any meaningful way. Also to all potential new users, current users and past users, the fact that the team cant even come up with a decent proposal or work on finding funds, is a red flag. Not that it just looks like the team is incompetent in finding a good solution, they really are it seems, unfortunately.
Also ps: they should really sell those god damn monkeys too
We would be more than happy to hear @stse and @lij plans on how they intend to reverse the current trend in traffic, transactions and revenues (business model?) that could eventually help a/this successful recovery.
I appreciate the work they put into this as well, jump starting the negotiation process, and I think they should be paid for their time and stop working on it quite frankly. We don’t have another 8 days after 3 weeks have passed of them working on this to wait and can and should use ONE for a snapshot vote. They jumped the shark on the smart contracts without ever finalizing a proposal and instead just talking about the situation in their own private messages. We need the decision makers to come here publicly and explain what they are talking about behind closed doors all day long because it could have been rejected before starting work.
We’re talking about tens of millions of dollars, and its time to be transparent. It has clearly become a bigger program for lenders and Tranquil Finance so how much more than 86M ONE are they now being provisioned out of this? If $1.7M is going to them in Stephen’s, that only leaves $700K of the remaining $2.4M for the Recovery One plan which is even less likely to work in supplanting exit liquidity parity or incentivizing rONE staking.
@Pioneer does not speak on behalf of the community. There’s been no election whatsoever, no vote on which proposal will be the “official proposal” and the Recovery One proposal is not the community’s proposal. Its disingenuous to continue to call it community governed when I have never seen the community more opposed to the hard-fork with inflation. If that’s the absolute only way versus no reimbursement at all, this is not an improvement from even Stephen’s basic proposal.
I fail to see how Stephen’s DeFi Partner provision wasn’t the same thing provisioning 86M ONE to reimburse AAVE, Tranquil, etc. which is $1.7M of the inflation supply at $0.02. Why doesn’t that save DeFi without creating a new staking variant? It sounds good but what does it mean? Give them the funds that were over-borrowed which then the collateral probably mostly gets withdrawn. They agree not to close down their Harmony deployment (which begs the question if they are threatening the chain over it?). Why does that save DeFi? 98% of the TVL is going be gone with DeFi Kingdoms and the TVL had been dropping significantly in the bear market anyways. To save DeFi you need happy users, the community to rally behind, and that are going to continue to stake, use dexes, and the chain more broadly. This is not getting there at all. Yes, you need lenders but they were already going to get 86M ONE (~$1.7M).
We have made virtually no progress from Stephen’s original proposal given the lack of details of what Recovery One is even suggesting here. We wasted 3 weeks coming up with 18 community proposals and not a single one is part of this. Now we need another week for them to finish smart contracts and an audit before we’ve even seen the proposal. Apparently, its the same hard-fork 2.5B with the extra bloat that as I’ve repeatedly questioned, lacks a coherent explanation as to 1) what the plan even is and 2) how it will even work. It adds risk and significant expenses which cannot be accounted for in a remotely basic fashion thus far.
Stephen’s original proposal with 15% of the treasury and 1+ BAYC added to it for solidarity, all going to the victims, with the 86M ONE for DeFi, I think would pass a blockchain wide ONE vote before they even finish this revised proposal.
Good morning! Again, thank you for taking the time to voice your opinion and to provide feedback, I know that it’s not your responsibility to do so and I appreciate your time!
I’ve researched other hacks and recovery plans extensively in the past month or so, and many of them involve borrowing. In fact, the majority of ‘successful’ recovery plans simply borrowed or were nearly bought out (ie: Ronin with Binance). In this instance that you shared from Pancake, it appears that they basically took a 10% interest loan (short-term) and used those funds to generate yields and to pay down the debt over time. This is an angle that we have explored and which can be utilized to supplement the longer-term recovery process and I was surprised that there was no community submission which mentioned this approach- again, thank you for bringing it to light. I had an interesting idea which even involved to secure a loan or to utilize existing funds, and then to stake them in a reputable yield farm/ mainnet staking in order to generate a new income stream (I even went so far as to consider staking funds on Findora mainnet at 20% yield, but the risk after their massive pump to the principal is too severe imo!). All in all this is a viable idea which can still happen in addition to rONE.
The main feature that we expect to kickoff defi with is the rapid burning of unbacked assets in exchange for rONE (after a vote), thereby reducing the circulating supply and increasing the on-chain parity of those assets closer to the 30% mark immediately. Additionally, we are working with the Harmony core team in order to ensure that a new bridge partner (L0) is established and that we can trustlessly bring in new assets while restoring the old ones through rONE, arbitrage, and the general incentivization of redemption of unbacked assets in favor of rONE. This can be done through the implementation of collateralization of rONE, and the creation of utility that goes beyond the simple scope of governance tokenomics. We plan to create a robust set of utility options for rONE in conjunction with our partners (such as Tranquil).
I agree that leaders can always do more, but I disagree on how much of the treasury can be ‘utilized’ with respect to the longevity of the Harmony blockchain. I think that we could do better and find strategies that use the treasury in a softer method, ie the one which we discussed in point (1) above. More of the treasury could potentially be used in order to yield farm while limiting the risk tolerance to maintain principal balance, then offering the rewards to the recovery process.
I’m thinking King of the Hill Alleyway scene. Yep. Mhmm.
They have committed to selling the BAYC or handing them over to a community treasury for utilization of other sorts, ie the auction idea or whatever has the best return.
UPDATE: R1 and Tranquil team have come to an agreement which would allow Tranquil to create a new lending market that provides immense utility to rONE token holders. This platform can allow for rONE to be staked, lent, and borrowed with newly created on-chain oracles; we would also provide funding as exit liquidity for existing Tranquil ONE debts. Additionally, the Tranquil team is offering to incorporate rONE into their multichain game, DeFira, allowing for users to interact with unique opportunities which ultimately burn rONE supply. Last, we are discussing a token launchpad and liquid staking option to further emphasive rONE’s future in Harmony and to incentivize the collection and burning of unbacked assets as part of the recovery process. See below for the proposal draft, which has been supplied to the Harmony Foundation and which is currently being reviewed.
Any feedback is greatly appreciated and we hope that this update inspires users to vote in favor of the R1 proposal!
Introduction
In response to the Horizon bridge incident, a group of community members formed to discuss creative solutions. During this process, the discussion expanded to include more stakeholders from the community, validators, ecosystem developers, ecosystem partners, outside counsel, and financial industry advisors. This working group discovered practical solutions that resonated with the core values of the Harmony ecosystem.
Recovery One is the governance foundation representing depegged token holders and the Harmony community. Our mission is the recovery of depegged assets and strengthening of the Harmony ecosystem through community-governed action.
Our solution to strengthening Harmony’s ecosystem is an Ecosystem Liquidity Solution.
Ecosystem Liquidity Solution
Tranquil/Defira.
What Tranquil wants:
A USD 500k grant from Harmony
USD 250k paid in ONE [SEPARATE GRANT]
1. We can structure the payment around several milestones
2. This would be used to cover the short-term development costs
USD 250k paid in rONE [RELEASE FROM 2.5% GOVERNANCE]
This would ensure our incentives are aligned, as this part of the grant would be tied to the success of the overall solution
A 33M ONE deposit [HARMONY] on Tranquil (V1) lending market to provide exit liquidity for the exist ONE supplier
This is essentially what was already proposed in the initial reimbursement proposal
33M ONE is the worst-case scenario, assuming all the existing ONE borrows are bad debt. The actual value will likely be smaller than this. Harmony can withdraw whatever is left after a fixed period (e.g. 1 year).
What Tranquil can provide:
On a very high-level, our proposal is the following:
Thanks for the update.
But what do you do with all users funds stuck on aave? How this proposal will help those users? Initial proposal submitted by Tse proposed a solution for tranquil users AND aave users.
Definitely a step in the right direction in terms of transparency and details.
AAVE users with all assets locked and frozen need real solution.
@Pioneer I do not support R1 proposal at its current form.
@stse and @lij Please do not provide any grants using Harmony’s treasury fund. Thank you.
Please, anyone that does not find the current R1 proposal to be adequate, use this time to enumerate what you believe are the deficiencies of the plan and what you think could be reworked or done better.
If you say use the treasury I am going to move on, as we’ve already addressed that the treasury is only about 47M right now and R1 is not here to cripple the foundation in an effort to provide a mass exodus of exit liquidity in a pointless fashion , considering the long term.
This idea for aave resolution is the minimum that can be done:
Include the awone token in the r1 proposal, similarly as 1assets, aave users will stake their awone token for rOne tokens. There is no reason to favor some cases to others, those issues are all the result of the hack.
Thanks for reading.
It appears that you have ignored certain unfavorable comments in here.
The following are my primary inputs (which I expect they won’t change your R1 proposal):
Thank you.
The Harmony team tried and the original proposal was rejected. R1 is an attempt to initiate a new process of community governance, which incorporates our original idea alongside community feedback.
I agree
R1 proposal includes all affected 1ASSETS, the 5% fee is additional, but as you can see above we have intentions to use large amounts of that towards partnerships in conjunction with asking for further Harmony Foundation treasury allocations to support ecosystem partners directly.
Validators must vote for a hard fork, or at least that is my understanding.
This makes zero sense. I never said lets not use the treasury. I advocate for treasury allocation with respect to the longevity of the project. There is no point in restarting defi on Harmony is we are, in the same action, dooming the chain through excessive usage of the treasury. Along with the initial exit liquidity ask of $3M (update), we are also requesting the treasury support Tranquil with a grant proposal, which is featured above. You’ll see that we are in fact asking for backup from the treasury, and we are doing so strategically in order to ensure a future for Harmony users (to the best of our ability as community members and R1).
@Pioneer are you acting on behalf of Harmony team or Harmony community or Harmony ONE holders?
If you are not representing Harmony team and since you said you incorporate your original idea alongside community feedback and you never said not to use treasury fund, please create another proposal that is the same as the Harmony team’s original zero-fee proposal with a modified term, i.e., 50% of recovery effort is to be funded by treasury fund . Will you?
Then, please present your R1 and the modified-Harmony-team original proposals (and any other proposals, if any) to ONE holders for voting by all ONE holders (not validators) before submitting it to Harmony team.
Thank you.
I appreciate all the work you’re doing. I just have two questions:
What will be done with the trading fees that are collected and sent back to the recovery one foundation?
Is the $1M that tranquil will put in the rONE/ONE pool coming from them or where is it coming from? Sorry I might’ve missed this.