Recovery One - Community governance for depegged tokens

Community Announcements
103

Thank you for the proposal. As someone who lost 6 figures worth of 1assets, I prefer the original.

a few comments & questions:

  • 1.65Bil ONE minted gradually to a 3-year date and then released
    Gradually minting tokens, that are released all at once creates a massive sell off event at a later date. Releasing gradually would be much healthier for the chain & better for the affected parties. The original sounds more optimal in that regard.

  • This will be amended to reflect current market prices
    Using the assets prices at time of hack would make more sense to me.
    But if you amend the ONE value to the current price, please make sure to do the same with all the other assets as well. ETH is in a much better state than at hack, therefore it’ll require more minting. Also, with current market trajectory you might soon need more ONE to reach 1usdc parity.

  • Early withdrawal (before 3 years) from staked rONE will result in partial
    redemption. (Proportionally to the period requirement period).
    Please clarify on that point. What exactly happens to the rONE when you unstake, and what will it be redeemed for? How are you supposed to participate in other usecases if unstaking causes “redemption”?

  • rONE can be staked for rewards (15% APR) for the next 3 years to
    receive blockchain emission and gas fees.
    If rONE stakers receive blockchain emission & gas fees, how is the reward fixed?
    Why doesn’t it rise/fall with staking participation?
    Can the rewards be claimed & used in ONE immediately?
    The way it’s written it sounds like affected parties earn additional yield of 15% if they stake. It might need some clarification, as some community members don’t understand that staking 3 years is needed to get the equivalent value of the lost 1assets, and you’re forfeiting 1/3 of the value when exchanging to rONE.

  • rONE Use Cases
    Personally, I’m not convinced that these (apart from Voting, which is only really needed once) are realistic & useful. Whatever yield projects reserve for rONE will have to be taken from other assets (ONE). It’s a zero sum game.
    Historically, any ONE yields in tranquil & co (collateral) were way below the proposed staking APR.

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104

I agree with you. It’s easy to come up with ideas and focus just on the quantitative side, maximizing our resources and deploying them effectively while minimizing the time it takes to hit our repeg goal. But ultimately it’s vital that everything we do gets looked at through a lens focused on user and developer reengagement, retention, and growth as well.

That is a very interesting suggestion with the treasury funds and minting back into the treasury. I was originally working under the assumption anyway that the funds would all come from the treasury but slowly over time. Your idea is a sort of middle ground between the two. I still think we’d have to be conservative early on, but having more upfront liquidity in ONE to take advantage of opportunities could be very useful. Even just from a marketing and PR perspective it helps just being allocated towards the effort as show of commitment. Even if it gets returned via minting and vesting(team time preference with vesting might also help some of these concerns raised in various locations about big unlocks in three years and such).

Also very much agree that the majority of it will not need to be spent.

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105

We invite holders of depegged 1assets to simply reject the exchange offer proposed by the RecoveryOne team.

This proposal as it stands is unacceptable for the following reasons:

  • Exchanging depegged stablecoins (which represents 70% of the amount of the hack) or blue chips (BTC + ETH representing nearly 30% of the amount of the hack) for rOne to be locked over a 3 years period to hypothetically recover the initial value of the tokens is a simple swindle and fraud.
  • Harmony and its managers must take full responsibility for the $100M and must propose a solution allowing the holders to recover their funds quickly and to dispose of them as they wish on or off the Harmony blockchain.
    Failing a substantial improvement of the offer under the following conditions:
    1/ rONE should be 100% pegged to 1assets
    2/ rONE can buy back 2:1 ONE (50%) within 30 days and the amount per wallet should not be capped
    3/ Full value in $ONE at the end of 2 YEARS Maximum
    4/ APR staking must be guaranteed at least 20% per year
    5/ Using a ONE token price of $0.01 to reflect price post operation

We invite all 1assets holders to join our group aiming to engage the responsibility of Harmony and its managers to obtain compensation of our damage before the legal and competent authorities.
DM me on Twitter @MaewouOne (or email at harmonylegalsuite@tutanota.com) in order to join us in the Class Action Lawsuit for Negligence and Theft.

You’ll be asked to provide your 0x… impacted wallet address and personal identification later.

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

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106

@reynandoy the Harmony treasury is less than $50M (less than 2B ONEs at $0.02 each). If we deploy the entire treasury to the refund, everyone is going to take this and run, and there’ll be no Harmony funds left to continue developing and growing the chain. It’s a lose-lose effect. We’re looking for win-wins here.

But your game theory is actually quite interesting

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107

@MaewouOne the overall suggestion is not plausible due to the lack of funds in the Harmony Treasury (under $40M USD at 2B ONEs priced at approximately $0.02 per ONE)

1/ That’s the goal of rONE, to eventually return to the 1(assets) value by the end of the recovery period of above-mentioned 3 years. I’ll let @hashmesan comment on this

2/ The reason for the capped amount is so that it’ll help the majority of wallet holders recover quickly and exit if they wish to do so. This will help with overall sentiment. We can discuss this further on what’s an amicable percentage of buy back.

3/ We can look into this proposal, 2 years max is really aggressive …

4/ … which leads to this 20%+ number

5/ We cannot predict the future price of ONE tokens, but if the inflationary numbers are within range, which is under 10% of the available token supply minted over 3 years, it doesn’t look like it’s going to be impacting the token price down to $0.01 (outside of macro economic trends)

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108

What is implausible Jack, is to believe that Harmony and its management team can avoid responsibility for a $100 million theft from its customers without any substantial financial effort and without any purse strings, while continuing to collect revenues and salaries, primarily to the reimbursement of the users, impacted by Harmony’s proven and legally demonstrated negligence.

As @GoodTimesBrad said above:

So yes, according to us, the resolution of this major problem requires a very important financial effort from Harmony and its management team:
1/ using on the one hand the maximum of the existing treasury and the liquidation of some core team’s assets (like BAYCs)
2/ securing a loan by Harmony Foundation for the remaining balance (from any crypto-lender, bank, exchange, etc.)
3/ by dedicating part of the staking rewards and transaction fees to the process

However, let me inform you that my IT background (CIO of a multinational company with 800K employees worldwide) and an MBA in Finance, allow me to confirm that the present proposal, in its current form and conditions, is an attempted extortion of funds, which our group of nearly 30 wallets, totaling today, more than 2.4 million 1assets, is not willing to accept as is.

1/ Your rONE recovery token has absolutely no value other than the one provided by the Recovery Token Mechanics while our 1assets represent their underlying assets that have been stolen from us. We are talking about 100 million dollars here, not some obscure token created, from scratch, on the basis of a smart contract!

2/ The variables of the Recovery Token Mechanics as well as the redemption of the tokens are therefore the only parameters that we can discuss together (but not indefinitely…).

Understand also that more advantageous parameters are also the guarantee of a greater attractiveness of this rONE token and a faster recovery of DeFI’s activities on Harmony.

Therefore, we ultimately propose:

a) rONE must be pegged at a minimum 80% (parity) or current market parity (whichever is greater). This is our ABSOLUTE ACCEPTABLE LIMIT. Think about it!
b) Using a ONE token price between $0.010 and $0.015. Again, 1.5 cent/ONE is our ABSOLUTE FLOOR.
c) rONE can redeem 2.4:1 ONE (31.25% parity) within 30 days of mint capped to 5M ONE per wallet.
d) Full value in $ONE at the end of 2 YEARS MAXIMUM. No impacted user will ever accept 3 years to get every dollar back from each of their stablecoin or blue chip! 
e) APR staking must be guaranteed at least 20% per year. Again, a compensation effort must be made by Harmony.

We are convinced that each of these improved variables is critical to the success of this initiative, which must move on quickly.

Otherwise, we invite all impacted users to join us in a Class Action Lawsuit for Negligence and Theft.
DM on Twitter @MaewouOne or email at harmonylegalsuite@tutanota.com

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109

the overall suggestion is not plausible due to the lack of funds in the Harmony Treasury (under $40M USD at 2B ONEs priced at approximately $0.02 per ONE)

Could you please be more transparent about this? As far as I know the treasury is this address:

Treasury holds 2.4 billion one currently valued at ~ 47 million $
There is a huge difference between deploying the entire treasury and only a small fraction which seems to be the idea in the current proposal.

Could you please clarify how much is in the treasury, which amount will be used, and why? In the proposal they mention only 2.5 million $ but why this amount? Who decided this? It’s bit strange that this is not mentioned at all in the proposal while the treasury funds should be the starting point of the discussion.

It’s clear there are different priorities for different stakeholders. I can imagine that for example validators want to protect the price of ONE as much as possible as they have fixed yearly ONE rewards. Hack victims want to see a compensation as fast as possible even if this would impact ONE price.
These stakeholders have different priorities and it’s not clear what the weight of the different stakeholders are in the current proposal. More clarity is needed on this.

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110

I kind of agree here. If the Harmony team thinks they are going to get out of this unscathed they are sorely mistaken. I expect the team to take the hit just as hard, if not even a little bit harder than the community. So… if we are being told there needs to be operation money there, then it is time to build the list of Harmony’s TRUE financial situation. I am leery of what is being said because the numbers seem to change just like the plan to use the fees. It started out that fees wouldn’t be enough to make a difference to suddenly “we actually did some homework for once” and it might be a viable option to alleviate the damage. I think the community needs to know a couple things here for transparency.

  1. An itemized list of Harmony’s monthly output. We need an absolutely 100% accurate breakdown of cost of operation. (and I’m talking down to donut day at the office)
  2. An itemized list of what every core member is being paid so we know nobody on the team is being grossly compensated for their work. INCLUDING TSE AND LI.

Here is my thought process behind these requests:

First: The Harmony team has already proven themselves to be grossly negligent in their operations. From the DAO ordeal to poorly dealing with funded projects to the bridge theft. With this past, the core team needs to earn back the community’s trust and FULL DISCLOSURE is the first step to this IMO. So release the financials in its entirety.

Second: The collateral damage from the Harmony Team’s negligence reaches far and wide. Projects closed shop at a complete loss, core and other DAOs have all but been completely abandoned by the team. The only reason any of the core DAOs exist right now is because community members have stepped up and DONATED their TIME (which equals money). Anyone working within this community has taken a huge financial hit because of this situation the core team has created, and I expect the team to take a hit as well. Yes, I am talking about cuts in pay for the time it takes to repay these people, INCLUDING LI and TSE. The money saved from the pay cuts should be also added to assist in repayment for the theft. I don’t care how small it is, it all adds up.

Without this transparency and commitment from the team to own the responsibility, the community is basically bailing them out with no guarantee that this mismanagement won’t continue.

Which brings me to my next point. There has been absolutely no talks in any of this about what happens in the future. Is this team being bailed out with no demands on changes in operations? They have failed miserably in almost every aspect of money management and community enrichment. There needs to be a plan by the core team in place for regular security and financial audits by a THIRD PARTY (maybe a committee of elected officials from each DAO?) so the community knows the team is working in a sane and trustable manner.

A big thing I believe is the unlocking of funds that is planned to start next month needs to be postponed. Doing this is a VERY IMPORTANT way to show the community the core team is here for the long haul. Above in a post @Jacksteroo mentions if they empty the treasury, people will just take their money and run causing massive damage. Well my argument is, giving the core team those unlocked funds in a time like this, the team could just as easily take their money and run causing just as much, if not more, damage. I am just saying, that argument goes for BOTH the community and the TEAM. The core team should not currently be allowed in a situation where they could potentially cut and run on the community.

And just to be clear, I am not interested in the lawsuit portion of this. People can do what they want, personally I took my risk and I’m playing it out.

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This thread now feels like a village where one night the village farmer left open a gate, and bandits came in one night and stole all the crops. People we devastated, but since the farmer still had spare seeds that could be planted everyone realized the best thing to do is grab any tools they could and try to help out plant the seeds as soon as possible so they don’t starve for the winter.

Then as everyone is ready to go start to help out some enraged villager comes in claiming to represent a small group of other villagers, and starts demanding that because the farmer left the gate open they themselves are the thief(despite evidence of bandits) and want them to give up them the seeds now rather than plant them, so they can eat those now because they think it’s better that the village starves rather than wait for crops. Despite the fact that the seeds when planted yield crops with far more nutritional value, as well as more seeds that can be planted again. And the fact that relative to the amount of crops lost, which could be regained by planting and working productively on the field, eating the seeds will just result in winter starvation anyway.

Not only do they demand all the seeds now, but they claim that the seeds are in their mind worth 1 cent, when everyone knows the same seeds sell for 2 cents at the market, and just recently sold for 3 cents. And depending on the season have sold for ten times that amount at various times. But they demand them valued at 1 cent, and then think they’re being generous by offering to value them at 1.5 cents effectively just asking for far more than their actual share of the seeds because they’re angry at the farmer.

Further more, the person threatens to travel to a different land to find a salt seller if their demands are not met immediately. If they don’t get the seeds now, they’ll take a vast sum of money and time to obtain enough salt to come back to the village and salt the fields so that no crops will ever be grown again. By the time they get the salt, the seeds will be in the ground ready to grow, but that won’t matter since nothing will come of them now or ever again once the field is salted.

Yet after salting the fields they’ll shortly begin to realize what they actually did. Not only have they gained nothing and destroyed everything. But they’ve caused real, actual demonstrable damage. Not every villager necessarily starved, some had enough savings to survive. But the village itself is gone now, and as much as the bandits and the gate may have started things, the person who salted the fields caused the real damage. Little did they think about what would happen after they salted the fields. Whether the people who had claims to the field and the crops grown on it might seek their own compensation from the person who is publicly on record as the one making false accusations, unreasonable demands, and then the actual act of senseless destruction. They might find that in their rabid quest to grab a handful a seeds and make sure everyone else starves, it actually costs them a lot more than any claim they may have had to the stolen crops.

Or you know we could get back to actually planting the seeds again and producing something of value.

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113

Lopis, good question regarding sell pressure. The value of rONE is (its backing and multiple uses). rONE provides holders with many options to exit.

  • Holders can stake and unstake.
  • They can choose not to stake and trade it.
  • collateralize it.
  • defi partners have mentioned they could create a liquid staking feature to rONE.

All of these uses provide an exit for holders at any point.

At the end of three years, we are working on options to restake converted rONE - ONE with a higher rate to reduce sell pressure.

rONE is one piece of the larger strategy. It backs bridged assets and gives them utility in the ecosystem. The larger bridge and ecosystem strategy work together with rONE.

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114

GoodTimesBrad, we look forward to recovering trust. First, we are rebuilding the ecosystem’s integrity. Then positive action can build trust.

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115

How is the communication with aave moving regarding the uncollectible loans?

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We have an open line of communication and are collaborating with Aave.

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I won’t be participating in the lawsuit, but it’s not “salting the fields” it’s getting the police to help the villagers get what’s left of their seeds back from the farmer, who refuses to cooperate, so that they can go and plant them somewhere else.

Personally I don’t want to harm Harmony and I’m thinking long-term. I’m making suggestions based on what I think will restore the chain and help the community the most. I’m worried that in 3 years time there will be a hundred L1s with similar performance to Harmony, and we’re destroying our early mover advantage by destroying the good-will and engagement of the community now.

119

I think @Rel should put his talent to write children’s tales.
I, for one, live in the world of grown-ups and in my world, responsibility and accountability not only mean something but also govern a very large part of the business world, which Harmony and its management team claim to be a part of, while shirking its fundamental rules and obligations.

As early investors, we too would prefer to see Harmony with the market cap of Solana, Cardano or Binance. Unfortunately, the autocratic and chaotic management of a very large number of past events, including the hack, confirms why Harmony is not there and is still falling further behind its competitors.
Despite this, still no questioning of @Stse and @Lij since almost 2 months and a half and no beginning of repeg of the stolen assets.

Believe it or not, we too would prefer a mutually satisfactory financial solution to a confrontational and legal approach. Unfortunately, S. TSE seems to want to take a very different bet. Rest assured, we are prepared for all eventualities.

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总感觉是自导自演。 他们有能力把资金转移了！通过这次事件 我已经不相信所谓的去中心话

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121

The fact that this has to be ASKED for rather than volunteered two months ago is, unfortunately, part of the problem…

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I’m really not understanding why various people(not just you two, and not meaning to single you two out but you’re in the thread here) are getting impression that the team is refusing to cooperate? From where I’m standing this is what I see:

Stephen in his video on twitter acknowledged the importance of a repeg, and if I recall correctly even mentioned the idea of deploying up to 50% of the treasury over time in order to do that.

The team has been way, way ahead of the curve implementing and preparing even just ideas mentioned and coding them up. If you pay attention to the github you would see they started and seem to have basically finished the code for things like diverting all of the fees towards a specific account(that could be used as one of many strategies in the repeg), and even the minting logic here if that’s what ends up being chosen.

I don’t know why people assume they don’t see the value in the restoration effort. They’ve always seen the value of investing ONE in the community as a short term expenditure for longer term growth.

Is the issue that people think that whatever gets decided for now is it as far as anything related to the repeg goes?

I think it should be an iterative process that evolves and is rolled out over time in phases personally. And also presented to people that way, so they don’t think the first phase is where they have to fight tooth and nail to try and just get the most amount of ONE directly from the treasury as soon as possible allocated immediately because this is the only chance they’ll get. I can be specific about why front-loading so much ONE, or lawsuits or anything like that is truly the worst strategy but that’s probably its own post if it’s not obvious why.

The reality is that since real work and testing has to be done to try get something out in a reasonable time getting a good solid idea and framework like rONE actually coded up and in production is a great start, but we need to be realistic about what can be done right away. The details need to be ironed out and such, but after you have that there’s still much more that can be built on top of that as a base with the idea of bringing growth and value back to Harmony.

Regardless of what you may think of Harmony’s social efforts, the team has always been deeply involved and knowledgeable about crypto and what’s going on in the space. Stephen and Li have been out there talking to founders and getting various defi protocols on Harmony like Curve and Sushi pretty early. In that same vein now there’s probably newer novel protocols that the community can fork(eventually, not this instant) that I think could be relevant to the restoration and repeg while adding general value to Harmony defi like CoW Swap(could solve a lot of liquidity issues and give the restoration effort alternative ways to acquire and burn more efficiently) and Solidly(Velodrome on Optimism(stable/stable unpegged but still ‘stable’(relative to each other) pairs, governance could be used for gauge voting and such)) for example, and probably others.

There’s no reason to think that anything fundamental has changed about Harmony, despite the seeming negativity. Harmony can just do what its always done, perhaps with more focus on growth, tech and efficient allocation of resources, but still fundamentally the same approach that worked before. Was quite literally the exact plan as far as I could tell reading the notes from the offsite before the hack and sounds like a good one to me.

Three most pressing issues for recovery are in no particular order in my opinion:

  1. Getting specifics of how rONE and related parameters will work. If we need to discuss specifically why it’s not in anyone’s interest to be seeking blood from a stone in the form of the most amount of ONE as early as possible, we can do that. But fundamentally growth is the only way to restoration, and it depends on ONE and Harmony not being viewed as a target to be destroyed to placate emotions at the expense of everyone collectively.
  2. Solution and communication as soon as possible from the team relating to reopening the bridge for people with stuck assets so they can at least have the choice to participate in the restoration effort.
  3. Discussions and planning about how to solve the bad debt on Aave and Tranquil. Figuring out a way to help people there get their collateral back as soon as we can so again they can have the choice on whether to participate here.
    (As well as possibly getting USDS added as collateral/borrow(once things are fixed) could add some new options. Putting up ONE as collateral and leveraging it to take out a safe amount of USDS might help the effort in the short term with extra liquidity without needing sell ONE immediately. Which could be paid off from future growth. Worth looking at at least.)
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@Rel I truly appreciate the efforts you put into writing your posts and presenting things in an enchanting light. You are a born storyteller but unfortunately, nothing you describe is part of the real world.

You are a dreamer and although we need that in these difficult times, the reality is quite different: Harmony and S. TSE are responsible for the theft of their clients’ crypto-currencies and as such have a legal obligation to do everything possible to replenish the impacted wallets, in the shortest time, using all the financial means at their disposal to date. If you had never heard of it, it’s what we call Responsability and Accountability.

Keep in mind that the bridge wallets which contained our ETH/BSC assets, were accessible ONLY BY Harmony signatures.

Hope and dreams are always welcome but now, be kind, save your stories for your grandchildren to come.

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