Recovery One - Community governance for depegged tokens

Is there any benefit to having Harmony’s treasury use some of its funds to buy unpegged 1tokens as part of R1 recovery plan?

Harmony has publicly stated that they are committed to providing technical and financial support to a recovery plan. At the current market rate, Harmony’s treasury has $82.5 million in ONE (not differentiating between locked, unlocked, staked, etc.). Is it possible that Harmony could allocate $5-10 million (or more?) for the recovery?

Right now, for example, 1ETH is $283 and ETH is $1993, an ~85% discount. If Harmony bought a large sum of 1ETH, would that improve the peg? The eventual burning of that 1ETH would ideally improve the peg (this is a key tenet of R1’s strategy, correct?). Would it also allow Harmony to realize a strong 3-year ROI on that investment?

Perhaps there are market factors at play where Harmony wouldn’t see any profit from this investment. And perhaps Harmony may even lose money in this investment. I don’t know how many alternative options there are for Harmony to provide financial support to the recovery/repeg effort (more than I can think of, I’m sure). But it seems like this is a better option than simply buying unpegged 1tokens and burning them at a 100% loss.

I also don’t know how this would affect liquidity on DEXes.

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Actually something kind of similar to this is one of the ideas was working on recently. A bit different than just buying outright, but it would be more of a supplement to some other main strategy. I’ll give a brief summary now I guess since something like this came up. But as far as anything like a proposal at best it would be like third in my priorities, maybe lower. There are at least a couple of other very pressing issues that will probably need to be addressed first that I want to bring up, pretty simple stuff already being discussed here and elsewhere that needs to be sorted sooner rather than later, else a good chunk of the community might end up getting left behind in a sense.

As far as what we’re talking about here I would say first I don’t think the Harmony team intends to be in a position here where someone gets sent a bunch of ONE from the treasury to an EOA and starts buying up assets in this manner. But that’s just an assumption of mine and maybe that’s wrong.

I think they will have to allocate more than $5-10 million over time in dollar value, if things go well that could be much less ONE than it is right now. But the time period here is key. It might take a while and depends on many factors. Also I’m super confident Harmony will not lose with this investment in dollar terms, no matter how much dollar value in ONE it takes, as long as the world economy doesn’t implode or something it should end up being one of the most effective returns on ONE expenditure they ever make, short of maybe some particularly productive employees or something. Or maybe if DFK got one of those 50k ONE grants early on(not sure if they did or not) it would be hard to beat that, but I digress…

As far as my idea goes and how it relates to what you suggest here. I think openly buying the assets on the market at whatever the rate is and burning them is one of the options to look at, but needs to compare to the capital efficiency of other strategies available. Suppose it turns out that it is a good one, I would guess if it was it would end up being a small percentage of the overall strategy just because especially with the low liquidity as you mentioned, you can just burn through a lot of ONE really quickly and also lose to slippage. I would say also lose to arbitrage, but since like I mentioned earlier I’m not expecting it would be someone using an EOA, but a non-custodial smart contract that they could load up and then someone or various people can call it when appropriate or whatever for it to act, after which would burn its proceeds, it would be more like a bot which should be able to multicall all the available pairs at the proper ratios to get the best rate so not actually losing to arb bots(think 1inch but less complicated).

So it sounds not bad at all really, especially at these prices and there’s certainly an argument to be made I think. But suppose one of the deployed strategies here ends up being some straight forward contract that gets loaded with ONE by the team every week and then exchanges time locked ONE for some value of the assets and burns them, but ONE is vested and paid from some staked ONE and the network transaction fees or something like that. And say this becomes the new rONE governance token too and could have various other perks too, so worth more than just the face value. All the extra value starts making it harder to compete with in terms of value generated per expended ONE. But it might work out to be some kind of balance too.

Buying and burning is definitely an effective way to help restore the peg though. So similar to your idea, one of the things I was going to propose is basically like that but more scaled down and passive. It should be a non-custodial contract similar to the one I mentioned above but a bit simpler as it generally wouldn’t have to worry about arbitrage. As most of what it would do I assume is take advantage of the low liquidity environment by picking up and burning the assets at some discount rate by percentage(with a hard explicit cap it can buy at and I don’t think it the amount of ONE in it at once would be too crazy, just reload if it’s productively burning at a cheaper rate) that the recovery decides is a price they’re willing to pay because it’s cheaper and more capital effective than the main strategy. And most of the time it might pick up outlier dumps or something that often happen now with the low liquidity. Maybe it could be interacted with directly too. If someone doesn’t want the other main offer because say they don’t want a time lock or some other reason like due to slippage on the dexes, and it happens to have enough ONE loaded it to complete at an acceptable rate for them, then a bunch of assets get burned at a lower cost and the counterparty gets their liquid ONE. No Chainlink of course for these assets so it’d probably have to use the old Uniswap TWAP or whatever, which normally would be a big concern with flash loan attacks and such, but with a hard coded maximum price and a limited amount of ONE I don’t immediately see an issue, but I definitely could be missing something…I hadn’t really fully fleshed it out and didn’t expect to post it yet but since the topic came up anyway…edit: also of course especially if it had the ability to buy from a user directly reenterancy and such needs to be avoided and all other standard concerns.

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The Recovery One team will join Harmony for the Bridge Recovery, Roadmap, and Adoption event on Tuesday.

We’ll be providing updates on the community proposal process and answering questions. Please submit questions to @HarmonyVillains @cryptoQuoc @matthewtbarrett


Hi all!

In preparation for the Twitter Space happening today at 5pm UTC, we would like to share our google form, which can be used to submit proposal ideas to Recovery ONE! We will use this intake form as a means to comb through suggestions and onboard more community engagement with the current proposal framework. Ideally we will have the final proposal ironed out and ready to share soon. We will use the next week to collaborate with community members in order to ensure that we have the most impactful proposal to date!

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Hello, I had 7189.7499 ONE Coins transferred from my Harmony Chrome Extension Wallet W/O my permission. (2,812 ONE is currently staked with CheekyONE Pool, of which I was told to track it daily to ensure they remain staked so they won’t be stolen). I filed an investigation report around 04.05.22 (as instructed by Chris at Cheeky Crypto) regarding the 7189.7499 ONE funds that were stolen, but I did not receive even an acknowledgement via email or otherwise that Harmony received the report. Why is that? I am told by the Cheeky Crypto/Discord team that HarmonyONE would contact me, but I did not heard anything. Will the Harmony Protocol contact me regarding the unlawful transfer of my ONE Coins? Is HarmonyONE open to replacing the coins if they are not recovered? FYI, I attempted to use the Nano S with the Chrome Extension, but I could never get it work. MetaMask was not an option for storing my coins. I attempted to locate instructions as to how to store the ONE funds on the Ledger Nano S, but there were no instructions anywhere and so I placed the funds in the HARMONY ONE CHROME EXTENSION WALLET, until they were stolen and Harmony stopped supporting the wallet. Had MetaMask been available, I would have used it with my Nano X, but to my knowledge, it was not available until the Chrome Extension Wallet was hacked. I have purchased more ONE Coins to replace some of the stolen ONEs. I can’t afford the risks. I looking look forward to hearing from someone soon. The address from which the funds were stolen: one1mqqahed8zkgzxkej9lpmqremgwvtk9g8k79zxk - Alexys


Ok, first off, I will confess I have NOT read 100% of posts here/Twitter/etc. (actually I am kinda short on free spare time atm) … but as I read this thread I got an idea, not sure of whether this was posted already. How about:

Let us stake the depegged assets.
They would yield ONE like as if you would stake ONE - (to avoid capital outflow from ONE to depegged assets, let’s say, depegged assets would be treated as being worth only 80%-90% of ONE … so if ONE was worth 0,03$ and one would stake 1000 depegged USDT, they would receive the same yield as someone staking 30k ONE (or 26667 ONE if you’d take the 80% approach).

When unstaking those depegged assets you would get back your depegged assets. (so no conversion ever between ONE and depegged assets, also 0 additional ONE inflation - however, ONE staking yield would be lower, as it would be shared with people staking depegged assets. Current market cap sits at around 350million, stolen assets at 100million … so staking rewards would be cut considerably, however it would also open up a lot of interesting oportunities: at what point people would prefer to hold depegged assets (that yield less than native ONE), but have the potential to increase worth - as the conversion factor between the depegged assets and ONE would change according to the supposedly underlying asset (using oracles)

Some more thoughts on this:
I do not see an actual repeg happening - simply: There is not even close to enough money in treasury and no business angels want to jump in. So forget repegs, not gonna happen. Also: LUNA style hard-fork and relaunch are not possible since the hack occured on Ethereum, not Harmony, so not possible to rollback.

Huge inflation (by increasing staking yield or simply creating ONE out of thin air), would be extremely bad for Harmony. That would destroy trust even further and even without that devalue ONE simply because of the increased supply.

Some voting rights do not compensate people for their losses. I guess few people stake ONE for voting rights, most want yield. So, I think the above idea (or something going in the same rough direction) would be the only viable approach

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I highly doubt anything involving inflation beyond the current rate will be on the table after such a thorough rejection be the community before. So I don’t think you have much to worry about there.

Directing part of staking rewards is one of the options that should be considered and assessed, I agree. But that’s really just one of an incredible amount of options. Especially if this group is strictly focusing on restoring the peg. And should the community approve, then they can take more aggressive and productive actions then might be politically viable if it were the team doing something like this on their own. Still, everything hinges on the team following through as well on their end of course.

If this is going to be something to effect of the long term roadmap of decentralization sped up and 2026 is here faster than the team or anyone else thought it would come, then any kind of well rounded recovery is also going to have to have people from the community focusing on acquiring, reengaging, and retaining users. Not sure if that’s what the team has in mind now or not. Somewhat got that impression from Stephen’s AMA, but not certain.

As far as the repeg goes and what’s possible. Seems many people in the community take a look at the problem and start with the original large number like you mentioned: $100 million, and then the treasury and conclude that it’s not going to be possible. I think that’s reasonable if you’re considering it something like an immediate debt to pay. But even ignoring future growth potential(since nothing is guaranteed) when you think about it as just a process of repegging and what the actual current state of the market is, there is a lot more going in favor of repegging then you might think.

To start with clearly the market doesn’t value the assets anywhere near the native values. So I could buy 1 1ETH right now for around $260/9300 ONE and send it to the burn address, and as much it would it would be a drop in the ocean, right now it shows progress can be made at a fraction of the value of the native assets. Of course the lack of liquidity and the ‘true’ book behind everything which is constantly changing with new information and such makes it really quite complicated. And both these things are probably true: there are probably larger holders who lack the liquidity to exit and would take a reasonable OTC deal here from some hypothetical contract that would burn the assets after at lower than the current rate on dexes, but higher than they would get from just getting killed by slippage from the illiquid pairs. On the other hand it’s also true that some people are buying the assets now and will continue to do so later as a speculative play because they either believe they will repeg in the future and want to hold them, or again some hypothetical non-custodial contract from this group is offering them a swap that will then burn the tokens in exchange for something they value higher than the market price of the asset(like say vested ONE over some longer period of time as a simple example not even considering things like governance). In both cases you should be able to burn assets at far below the native rate. At least for a time. So right away the idea that on any immediate time frame anything approximating $100 million would need to be spent to make progress doesn’t seem necessary to me.

Another thing is which is again somewhat speculation on my part is that there’s probably more assets sitting dormant in wallets that might be either lost or forgotten about than you might think. And on that scale, not even just lost keys but some people who might have just completely disengaged and left their LP going and plan to come back in a couple of years. We’d definitely want as many users back in the longer run though, but for some reason a surprising amount of crypto just sort of sits there collecting dust. So there’s not necessarily any immediate need to fully cover everything, but of course that’s the long term goal.

But all these little advantages really add up if you’re just going to aim for a repeg, the effective liabilities are likely less than you’d think when you assign some reasonable probability ranges to different sets of dormant coins. I’m not saying you take this as something to rely on for a repeg, but just consider how much the market value of BTC is based on the market assigning a very low probability that Satoshi isn’t going to wake up and send something perhaps approaching 1 million BTC to exchanges tomorrow. Again it’s not that I think a huge percentage of the assets will never move, or it’s a bunch of Satoshis who will never sell them out of the goodness of their heart. It’s just the worst case scenarios are unlikely and there are hidden advantages like this.

We could end up in a sort of algo-repeg phase, where eventually the assets are pegged and liquid enough on the bridge that combined with some slight prodding and maybe some backing from some kind of ONE reserve contract to allow people to burn assets for the full native value that the UX and market is the same as if it was a fully backed peg. As much as undercollateralization might be a scary word, the current state is zero collateralization. So things like this are probably worth considering for the future, and in this case it would only be a transitory phase anyway. But everything ideally functions the same from the users perspective. Figuring out a way to non-custodially stake most of the native ETH while either filling up the bridge on demand, or at a predictable rate for exits is also a way to stretch out smaller amounts in to possibly creating the same UX as if it was fully backed and just sitting there in the bridge.

We do have a couple of issues that current have not worked in our favor, that is the price of BTC and ETH mostly. Would be worse for that to change in the other direction though and it’s also something that can be addressed. Also I was looking at the affected tokens and for example the 1AAG one has like 84.6 million supply on chain here, but only 6.6 million was stolen. So I don’t know exactly what the implications of that are since I hadn’t thought about it and just happened to think of it now, but for governance at least it’s something worth looking at.

Also with governance one of the affected tokens, FXS has a system where you can lock your FXS into veFXS for up to 4 years(and get 4x the voting power and maybe increased rewards too but I’d have to check again). If people get ONE in some form, things like that can really help smooth out the curve and with the proper incentives actually give those willing to commit like that power to shape the recovery and rewards by taking a longer term view and eye towards future growth.

So I’d say the repeg part is more likely than people think. But also it can be almost ‘too’ good from what I can see without some other initiatives as well. Some work will have to be done on the softer side of things related to user growth and retention and such. Even though just the whole restoration narrative itself does a lot of the work there, getting back and exceeding old user growth again will end up being even more important in the longer run where the resources needed to repeg will probably seem relatively quaint in retrospect.

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We are holders of over $1 million of 1assets. After all the recent defections within the Harmony teams and the extreme behavior and proposal of S. TSE, it is now more than time to organize for the legal suite that we are determined to conduct.
Despite his legal team’s advice, S. TSE will be held accountable for the theft of the $100 million he was responsible for.
DM me on Twitter @MaewouOne (you’ll be asked to provide your 0x… impacted wallet address and personal identification later) in order to join us in the class action lawsuit for negligence and theft.

Notice: you can join our legal proceedings regardless of your citizenship. It is not necessary to be an American citizen.


你好还有联系方式么 ?推特上面找不到 我要诉讼

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Harmony fam you have until Monday 8/22 to submit ideas, solutions, and proposals to the On Wednesday 8/24 @ 5PM EST, the Recovery One team will review proposals in a Public Review via TwitterSpace.

Our Public Review of proposals will follow this checklist:

  1. Does it solve Defi?
  2. Does it solve depeg?
  3. What is the impact?
  4. Is it clear & Understandable?
  5. Can it be incorporated into other plans Or entirely different?
  6. Backers & Who?

Matt hello

Will all proposals be disclosed publicly (both in Spaces and here?) or only those you and your team selected?

They will all be compiled and disclosed unless they are malicious or disrespectful I suppose!

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To take @HoundOne_Validator question a little farther:

Will R1’s own ideas and proposals be discussed as well, or only community submissions?

Many of the community submissions have likely been publicly available and discussed on Talk and other mediums for the past 2 months already. Discussing them again - without discussing R1’s own ideas - could lead to additional community frustration with the recovery process (R1, Harmony, Stephen, etc.).

@Pioneer @mbarret3


Is this now the only proposed solution? Time is money I’m afraid and we need to get koving

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We will be going through all reasonable submission that are not offensive (we haven’t received any offensive ones, but I did see a punching booth mentioned that gave me a chuckle). So far there are 9-10 received, many of which were also posted in various forums posts over the past month, but are worth discussing.

We will also be providing our proposal and examining how it meets certain criteria, and explaining any remaining needs to target going forward. I’m looking forward to examining the community’s proposals together and moving forward with an official proposal, followed by a vote soon. We are all ready to move on and to encourage ecosystem growth.


Yup, we will be providing our proposal! I have a feeling you’ll like the solutions we’ll share on Wednesday! #web3 #process #solution #collaboration #repeg #defi

Proposal: algorithmic stable coin native to harmony.
Airdrop 1 for 1 against the depegged assets if they burn their tokens.
The algo stable coin could work in such a way that after initial mint and distribution a new vesting schedule is set out such that ONE is minted when the stable coin is redeemed and when a new stable is minted ONE is burnt.

This solves - DeFi on harmony and Repeg

Click on the link below for the Public Review of the community submissions and Recovery One’s proposal. Enjoy. We will be going over this PDF today. Please follow along.


How does the plan will fix the uncollectible loans on aave?

In short, you are asking 1assets holders to swap them for a ONE liquid staking token at a parity of 66% of the underlying and to stake them over a period of 3 years… Where is the repeg in this solution? This is clownish!
As it stands, it’s a big NO.
With the following modified conditions, we MIGHT have thought about it:
1/ rONE will be 100% pegged
2/ rONE can buy back 2:1 ONE (50%) within 30 days
3/ Full value in $ONE at the end of 2 YEARS
4/ APR staking must be guaranteed at least 20% per year
5/ Using a ONE token price of $0.01

To divert the holders of $70 million in stablecoins and the remaining $30 million in blue chips from their original motivation by offering them yet another HRC20 shell is really taking us for fools.