Recovery One Foundation

[mbarret3]

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 additional community members, validator stakeholders, ecosystem developers, ecosystem partners, outside counsel, and financial industry advisors to constitute the Recovery One Foundation. Recovery One continued to expand the discussion to the entire ecosystem and sought new suggestions, ideas, solutions, and proposals for the bridge incident. That greater ecosystem collaboration and public review further strengthened Recovery One’s community proposal and made the solution more dynamic.

Recovery One is ready to take action.

Governance
An official vote coming September 2022.

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

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

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

Structure

1. Steering Committee (5 members) - responsible for taking ideas and turn to proposals, and approving grants.
2. Grantees - contract to build, market, and engage with the community.
3. Active members - actively engage by providing proposal feedback, and ideas, disseminating to the community, and voting.
4. Non-active members - own governance token but do not vote.

Steering committee

• Quoc Le (Chair) / Harmony contributor, ex-founder DeFI, and 20 yrs experience in tech.
• Matthew Barrett (Co-chair) / Harmony community member, Web2 founder, business development, finance.
• Logan / Harmony Villains validator, experienced in OSInt, Business, and Reporting.
• Michael Otis / Fuzz.fi
• [open] / Defi partner

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

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

Recovery-One

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

What’s next?

1. Release sections of the proposal.
2. Release the full proposal.
3. Make the contract available.
4. Convert depegged assets. (Stake rONE to vote).
5. Move for a vote.

How to get involved?
We need your help in sharing our effort and inspiring new members, and collaborators to join…

Reach out to any of our committee members below:
Mathew Telegram: Telegram: @mattbarrett
Logan/Pioneer Telegram: @HarmonyPioneer/ Twitter @HarmonyVillains
Quoc Telegram: @cryptoQuoc
Jack Telegram: @jacksteroo

Socials
Join our Twitter: https://twitter.com/recoveryonefdn
Join our Telegram: Telegram: Contact @recoveryone

[mbarret3]

The Recovery One contract has been reviewed by Tranquil. We thank 0xGoten and his Defi team for their assistance, support and advice.

Changes from 0xGoten (tranquil) feedback

[mbarret3]

New thread, with the proper Governance classification as we move towards action in September.

What’s next?

1. Release sections of the proposal.
2. Release the full proposal.
3. Make the contract available.
4. Convert depegged assets. (Stake rONE to vote).
5. Move for a vote.

[Bigfeettalking]

This is exciting. Timing is right with cryptos and Ethereum’s major upgrade Ethereum 2.0. We want a vote. Wen vote?

[babakajone]

@mbarret3

• Convert depegged assets. (Stake rONE to vote).
• Move for a vote.

So its true there will not be a vote of ONE token holders in approving the printing the 2.5B tokens?

[mbarret3]

Hi babakajone, after the governance vote there WILL BE a vote of ONE token holders.

Bigfeettalking, governance vote end of September.

VOTING SEASON is coming!

[mlotis]

Technically, minting any additional ONE tokens requires a fork and would then be subject to a validator vote

[Pioneer]

And we’re definitely on top of this, Jack has helped to ensure that the chain is prepared on the tech side for a validator vote to hard fork!

[GoodTimesBrad]

Am I correct in assuming a lot of ONE will be locked forever in liquidity pools once the depegged asset tokens are burned?

[TrickLuhDaKidz]

[UPDATE: I no longer support R1 as currently proposed. But will again support the plan if the linked concern below is properly addressed.

Recovery One Foundation - #55 by TrickLuhDaKidz]

---

I support R1.

---

Unfortunately there is no “perfect” solution. That’s impossible.

But R1 is a good solution; our best solution.

---

I know people dislike the notion of minting additional ONE, but all of the “leftover” ONE will be burned at the end of this. And additional components like using a portion of validator staking fees, transaction fees, the nft auction house, etc., will all increase the amount of ONE that will be burned in the end. I think when the recovery play is over, the final amount of newly minted ONE in the ecosystem will be substantially smaller than what R1 is proposing.

I also know many are upset at @stse and @lij for their abdication of responsibility of this entire ordeal and for failing to proffer a reasonable recovery plan. I’m right there with you. But blocking R1 as a statement/retaliation against those two would only further hurt ourselves imo: the community cutting off its nose to spite its face.

I’m voting for my chance to recoup the financial losses I’ve endured - that we’ve all endured.

---

If R1 isn’t approved by the community, I believe there will be no reimbursement at all. This is it. I think this is our best and last chance. We need to be practical and start making tangible progress towards a recovery. Enough talking and indecision. Without a plan to improve unpegged assets and defi on Harmony, there is no Harmony.

[WhitePeach]

I don’t support R1.

Harmony team (i.e., @stse and @lij) should own and lead the recovery plan. Under its original reimbursement proposal, Harmony team owns and leads the recovery plan. For continuity, as long as Harmony team exists, the Harmony-owned-and-lead recovery plan will keep continuing.

The current governance team members for R1 proposal were not selected and/or voted to represent Harmony ONE holders and/or the affected wallets. In the future, they (i.e., the current or future governance team members) can possibly join or leave, request more money, etc. There could possibly be risks that the governance team under R1 proposal could hold the recovery plan hostage if the demand from the governance team is not met. Or, worst, the R1 recovery plan could eventually be abandoned.

IMHO, the recovery plan should include sharing risks equally between Harmony team and ONE investors, at such, the Harmony team’s original reimbursement proposal be modified to include using treasury fund. The reimbursement to affected wallets is to be replenished over 3 years so, similarly, the treasury fund will be replenished over 3 years.

Unlike R1 recovery plan, Harmony team’s original reimbursement proposals do not waste treasury fund. No fees are incurred and no grants are given out under Harmony team’s original reimbursement proposals.

New token and its associated processes in R1 recovery plan make it more complex to ONE holders and are subject to unforeseen risks and/or circumstances.

Thank you.

[Bigfeettalking]

The Core teams first plan was so bad. It was massive inflation with a touch of take it or leave it. So bad. It lacked innovation and vision. The plan felt like the chain die and lost any sense of innovation.

IMO Recovery One’s work and plan breaths life and the idea of community back into the chain. We want innovation. Not a lack of creativity. Print billions of ONE.

If Harmony ever released another plan it would be the opposite. I can see it, the next plan will magically make ONE disappear.

[mbarret3]

We are happy to release the full Community Proposal by Recovery One. Thank you to everyone who collaborated and made the final proposal possible. Cheers to you. #web3 #community #solutions #progress

Community Proposal by Recovery One.pdf

[mbarret3]

Community Proposal
by Recovery One

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 additional
community members, validator stakeholders, ecosystem developers, ecosystem
partners, outside counsel, and financial industry advisors to constitute the Recovery
One Foundation. Recovery One continued to expand the discussion to the entire
ecosystem and sought new suggestions, ideas, solutions, and proposals for the bridge
incident. That greater ecosystem collaboration and public review further strengthened
Recovery One’s community proposal and made the solution more dynamic.
Recovery One. The governance foundation represents 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.
The Recovery One community proposal is made up of Commitments to the
Community and the Recovery Token.

Commitments to the Community
Below is the list of commitments to the community that validators, developers,
ecosystem partners, and the 16 community proposals are seeking from Harmony. We
ask that the Harmony foundation accept;

• Commitment to a long-term working relationship with Recovery One Fdn.
• Commitment to gather roadmap feedback from Recovery One Fdn.
• Commitment to release a State of Treasury summary and to maintain a transparent and secure treasury.
• Commitment that bridges be non-custodial.
• Commitment to BAYC and use those resources for ecosystem growth.

The Recovery Token
The proposed solution offers depegged tokens in exchange for rONE tokens, which the
user can redeem on a smart contract for the full value in $ONE at the end of three
years, and earn 15% returns as staking rewards in $ONE for the same period. The
impact to the total supply is 2.5Bil tokens including the 700M paid for staking rewards.
The solution is the best tradeoff in returning the user full value while preserving the
Harmony treasury for future growth. In the first 30 days, the solution proposes a $3M
exit liquidity (at market price) for those who choose to exit early. We commit to burning
any unused $ONE tokens during/ after the recovery process.

rONE’s Mechanics
A smart contract has been created to accept depegged tokens in exchange for a
Recovery token, rONE. Anyone can deposit bridged assets and mint (rONE) tokens.
The rONE mint contract will close in 1 year, and the staking period will last 3 years from
the initial mint date.

• rONE will set bridged assets at 66% (parity).
  Horizon Bridge incident date of 06/23/2022, ONE at .0264.
• The contract is injected with 114M ONE tokens ($3M).
  rONE holders can initially redeem (50% parity) within 30 days of mint. Limit $1000 per wallet (at 50%). The original wallet address must have an equal amount being redeemed to prevent market manipulation, (eg creating multiple wallets to drain). Must have held depegged assets on, snapshot date of 06/23/2022 and currently hold depeg token.
• rONE can trade freely on exchanges.
• rONE can be staked for rewards (15% APR) for the next 3 years to receive blockchain emission and gas fees.
  Minted rONE (not staked) can be traded on exchanges and used in DeFi.
• rONE can be redeemed early.
  Early redemption of rONE will reduce ONE debt to rONE
• At the Year 3 Redemption date, users can redeem rONE: ONE at 1:1.

Priced at:
https://docs.google.com/document/d/1vDjI_rPA28YxjWztVZmNAPaf-ueuj7VlcOJq3pmCE4Q/edit#heading=h.mde21uf2e5av

How To Redeem rONE
A smart contract that accepts bridged assets and mints rONE has the following redemption options:

• Initial Exit Redemption
  rONE can redeem (50% parity) within 30 days of the initial mint date.
  Capped $1000 (pre-incident valuation) in bridged assets per wallet.
  Provides holders with small sums to exit early, with a snapshot date of 06/23/2022.
• Early Redemption
  Redemption of rONE to ONE before the Year 3 Redemption date will result in partial redemption.
  Partial redemption from rONE to ONE starts at 33% after 3 months from the initial mint date.
  This Partial redemption rate increases linearly to 1:1 (rONE to ONE) swap in 3 years.
• Year 3 Redemption
  At the Year 3 Redemption date, users can redeem at 1:1, (rONE: ONE).

rONE Wallet Example
Assume Wallet A has 1000 USDC, and anticipation of rONE has pushed the market
price for USDC to 0.20 cents (20% of parity). ONE on 6/23/2022 was .0264. The parity
is selected as (66%). Wallet A receives 25,000 rONE (~$660, with rights to receive
25,000 ONE at the end of 3 years while receiving 15% APR rewards).

• Primary Exit:
  At the end of 3 years, Wallet A receives 25,000 (par value) + 11,250 ONE
  (interests). Depending on market conditions, ONE may be valued more or
  less.
• Secondary Exit:
  Wallet A exchanges rONE via the HInitial Exit Redemption for 50% within
  the first 30 days of the initial mint date.
• Tertiary Exit:
  Wallet A sells rONE on the market to another wallet.

rONE Tokenomics & Impact
Blockchain emissions and gas fees will continuously fund the rONE token.

• Up front $3M (114M ONE).
• 5% are retained for governance.
• We can assume participation is around 60% (taking into account some users have exited), and parity at 66%, we will have to mint:
  $60M x 66% = $39.6M in ONE ( 1.65Bil ONE ) to be released in 3 years.
  Annual mint and deposit into the rONE contract to smooth out circulating supply and to give rONE value.
  Mint annually 247M ONE token to pay rONE interest rate.
  Totaling 741M ONE token.
• Total Mint 2,491M ONE

rONE Governance Contracts
Our goal is to implement the full end to end solution as contracts, compound governance, and 100% non-custodial (no owner, no upgrade keys, no dev or admin keys — no keys period!).

We have implemented Phase 1: Stake/Unstake depegged tokens contract to exchange
for rONE — this will be used for voting on the proposal on behalf of the depegged token
holders. This has been peer-reviewed by 0xGoten (Tranquil) and others.

Phase 2: Focused on Stake/Unstake rONE for 15% annual rewards.
Phase 3: Focused on Redemption of rONE for ONE which enables it to exit anytime up
to the 3 year period. (w/ penalty linear proportion to the time remains on the 3yr term).
We will deploy this contract Friday, Sept 16, 2022 9AM EST and provide instructions on
how to use it.

GitHub - Recovery-One/governance-contracts: Governance token contracts for rONE

Supplemental Plans

1. Ecosystem Liquidity Solution - highlights payment for bad debt and plans to
   restart DeFi with Harmony partners
   a. https://docs.google.com/document/d/1IWG46yoSa0xcZB6tl1MMlWiUmRy
   hy9dCpOzHY929mvw/edit

2. rONE Committee Governance - highlights voting structure, membership, and
   compensation
   a. https://docs.google.com/document/d/1sKh8riiv-nj9ikFll1esDJCGbEMTwT9
   KzQzfzkQuZOM/edit

3. rONE Launchpad - Innovative launchpad platform to bring projects to Harmony,
   voted by rONE holders (governance)
   a. https://docs.google.com/document/d/13O9yMN3_JhetrGdVe431IKSze84y
   bQRqTEdw5yQUouc/edit

4. Harmony hardfork (2.391B tokens to mint)
   a. [Reimbursement] Issue additional 2.391 billion ONE tokens over 3 years by peekpi · Pull Request #4273 · harmony-one/harmony · GitHub

5. rONE Calculator - includes rONE calculator, bridge hack tokens, and more
   a. https://docs.google.com/spreadsheets/d/1P68H_6eRNSWJx5nc-JbZewcE
   knVImIlee5OO97BuH0Y/edit?usp=sharing

Next Steps
Timeline

• Release sections of the proposal.
• Release the full proposal.
• Make the contract available. (Friday, Sept 16)
• Convert depegged assets. (Stake rONE to vote). (Friday, Sept 16 to Friday, Sept 23)
• Move for a vote. (Sept 23rd or later)

Community Collaboration
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 (50% parity) within 30 days of mint. 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.

Recovery One Team

• Quoc- Telegram: @cryptoQuoc
• Matt- Telegram: @mattbarrett
• Logan- Telegram: @HarmonyPioneer
• Jack- Telegram: @jacksteroo

Advisors

• Tranquil
• Stably
• Harmony (Li, and Jack)

Guidance, Opinions & Contributions

• Harmony Community
• OneCelestial
• Fuzz Fi
• Cheeky Crypto
• HarmonyDragon
• Tabasco
• Unite Finance
• Repegging Node Validator
• Peace Antz
• Domino
• Maria - Everstake
• Celer
• Curve
• Aave
• Huobi

FAQ

Does rONE’s have deflationary characteristics?
The rONE token has deflationary characteristics to offset emissions of ONE. First,
holders of rONE choose how to use the token in the market and have a choice of when
to redeem rONE to ONE. Redemption choices engage the deflationary burn mechanics
depreciating the supply of the rONE token (as rONE is redeemed it is burned) and sets
in action the burning of ONE token at year 3. The second deflationary aspect of rONE is
the deflationary nature of the $100M in unpegged bridged assets. Holders of rONE can
choose to wait and recover value with time, or holders can choose to redeem rONE to
ONE before year 3 (making the decision to reduce an overall $100M in depegged
assets to a lower amount) burning depegged assets at this redemption.
rONE’s Redemption Choices

• Initial Exit - burns depegged assets, burns rONE.
• Early Redemption - burns depegged assets, burns rONE.
• Year 3 Redemption - burns depegged assets, burns rONE, burns unallocated ONE staking rewards, and burns ONE allotted from early redemption.
• Additional burning utility in future DeFi projects (Defira, R1 LaunchPad)- future rONE and ONE feature.

Why only 66% initial parity?
At 66% parity, 15% interest rate over 3 years (at set price of bridged incident, that
remains constant) brings full 100%.

Why rONE?

• rONE provides a resolution to depeg by swapping depegged assets and minting rONE tokens.
• rONE provides DeFi protocols and exchanges the method to swap depegged assets to rONE.
• rONE mechanics and utility provide holders choices on when to redeem for ONE.
• The rONE token has deflationary characteristics to offset emissions.
• rONE allows DeFi partners to restart DeFi on Harmony using rONE, ONE, native tokens, and new bridged assets.
• rONE can be staked to yield 15%.
• rONE is liquid and can be traded.
• rONE holders gain governance utility and a voting process for future actions by the Recovery One Fdn.
• rONE provides the ecosystem with an opportunity to create new dynamic liquidity tokens for the Harmony ecosystem.
• rONE can act as a catalyst for DeFi innovation.
• rONE is a smart contract-based Protocol Token.
• rONE has multi-phase utility.

What is the rONE Use Cases & Utility?
Phase 1 - The Recovery of Depegged Assets

• Traded/speculated on (no staking emission).
• Collateralized (no staking emission) via Tranquil and DeFi.
• Staking/Potential liquid staking similar to stONE via Tranquil.
• Liquidity pools (no staking emission from R1) via DeFi.
• Voting (with staking emission).
• Delegated voting.

Phase 2 - Strengthening of the Harmony Ecosystem

• In-game Defira utility for rONE.
• rONE Grants - Recovery One community governed action.
• R1 LaunchPad (Commitment from Tranquil to build).
• Sell tokens in exchange for rONE/ONE LP.
• 100% burn rONE and distribute LP fees to staked rONE holders.

Could the SEC consider the rONE token a security?
Compliance is our foundation priority. Early on, our team spoke with the Harmony
Counsel (Fenwick & West LLP), who guided us toward establishing a Recovery One
foundation representing a voice, the community of the depegged assets holder. The first
step is to build the community of depegged assets by establishing community
governance. Then we hold a community vote via a governance token to decide how the
community prefers to move forward with the recovery process. Our proposal asks
Harmony to donate 2.491 billion ONE tokens to repay back the depegged token holders
to the governance contracts. So long, the foundation is acting on the community’s
behalf, the governance token is considered as a utility token serving on the behalf of
its community.

Why is only 60% participation expected?
We calculate the emission based on an expected participation. The participation drops
off mainly due to the mechanics of the rONE in these ways:

1. Early exit of rONE at $3M / 50% peg (expected $6M debt reduction)
2. Redemption of rONE before the 3 year are penalized (reduce debt/ participation)
3. Many depegged tokens have already exited Harmony ecosystem
4. Some users are unable (lost wallet/hacked) or unwilling to participate with rONE
   If participation is higher than expected, then redemption will be provided on first come
   first serve basis.

[GoodTimesBrad]

Although I was initially skeptical, I fully support this and think the group have done a great job putting it together. I’m hoping it passes the validator vote and I’m interested to see what rONE trades at.

[babakajone]

I am against the proposal.

Stephen’s was 2.5B in inflation, victims got it all. This is 2.5B in inflation, victims get 5% less, don’t get the bulk of it until the end after it unlocks in 3 years and take all the risk of the chain surviving and rONE working or they will end up with less if the experiment fails.

As you can see before, I was and am against the same exact 2.5B inflation with a 5% cut going to this. As to where exactly these funds are going, the transparency has gotten worse. Now the 5% is not described in anyway where those funds will go. 125M ONE unaccounted for that could pay people back.

@babakajone

Harmony originally proposed printing billions of tokens to reimburse over 3 years. The community absolutely rejected it overwhelmingly because they didn’t want ONE holders to bear responsibility for the hack. It included nothing from the Treasury and the entire hack was reimbursed through printing ONE. No one supported it.

In comes the Recovery One team. And where are we now? Printing billions again, but this time paying 5% of the entire inflation supply to Recovery One of course. Only to find out later that their own proposal, the R1 “official” proposal is THE SAME EXACT inflation proposal regurgitated only this time, 5% is siphoned to this thereafter for liquidity, launchpads and grants and whatever else they plan to do which SHOULD go to the victim.

There’s nothing worthwhile that’s new here other than undisclosed partners receiving massive funds to fund their own development. The process has been hijacked and it only resulted in a worse deal for those hacked. The inflation hasn’t changed, just how much is spent on this when it could pay people back.

@babakajone

So what’s new here? Other than them getting 5% of the printed inflation? How is it different than harmony’s original proposal? Why give them 5% to regurgitate the same thing? Why not use that to reimburse the victims? What’s the point of Recovery One if all they ultimately did was put forward the proposal Harmony already suggested (sans the 5% fee they are attempting to siphon off)

I disagree they should make a whole new grant system and mooncoin launchpad when the first grant system wasted a significant amount of Treasury funds and this isn’t some degen trading fund. Now this is an unaccountable new grant process and waste of money which should not be used to divert funds further from victims.

@babakajone

The maximum should go directly to the wallets Harmony already identified as impacted by the hack as soon as possible. Not millions of dollars in ONE for liquidity pools and staking and grants and everything else that’s getting added into this by the Recovery One team. Harmony gave out enough failed grants. Its time to pay back the users and move on from this.

@babakajone

Sounds like you are claiming this to be some kind of ancillary grant process? Hasn’t Harmony given out enough grants and the process was rife with fraud and mismanagement whereby millions of the treasury were given away to DAOs, failed projects and generally anyone that asked for it? Are you proposing that this is becoming some kind of new grant program in addition to Harmony’s ecosystem grants? Why do we need a new grant program and why are you using a percentage of the victim’s compensation and inflation that no one wanted to fund this grant program? How much will you allocate to the new grant fund? Will this not lower the amount of exit liquidity and make the peg even harder to defend?

@babakajone

There’s a huge difference in how the ONE is allocated. Because each ONE allocated to million dollar grants for Tranquil or others to support its own development or extra liquidity doesn’t go to the victims unless they effectively go “all in” on rONE which it seems they pretty much would do under these terms. If there was no rONE and no Tranquil grant, there’s an additional few million dollars to go towards those who were impacted. It should go to those who lost money directly and not to more grants. Tranquil should just apply for its own partnership grant. Why go about it this way to dilute what’s available to reimburse people? That’s significantly expensive utility but if they are going to restructure the entire lending platform around it, I guess its potentially viable but still a pretty serious gamble that it works and many other platforms are going to need grants at the expense of total reimbursement amounts available.

I don’t think they should receive a 5% of the victims funds to try this defi experiment and add more risk to the victims. No projects should be funding their own development out of this when people are not getting paid back in full.

@babakajone

Furthermore, it adds in the additional risk that rONE itself fails even if ONE does reasonably well and it appears the users are being forced to accept redemption in rONE or receive nothing.

@babakajone

There’s not a single Defi primitive on earth that was successful in recent times including billions behind them defending “utility.” How much of the suggested funds will be used for liquidity as opposed to going to partnerships, grants and to defend your DeFi utility idea? You’ve said “dynamic utility” a few times without elaborating on any specifics other than a broad list of common DeFi primitives that have already failed. I think we are beyond the point of buzz words. Many assumptions made in the proposal have included APRs that assume price stability of the rONE token itself and how will this be ensured.

@babakajone

Its also based on the success of the investments and allocation of the 5% (125M ONE) and if that does not work, this could completely fail and it will not solve the problem. I fail to understand why you assume your grand golden goose utility is going to work. There is simply no reason to take that kind of risk right now at the expense of those still waiting for answers. Not only does crypto and Harmony need to survive, but whatever “integration” you spent the millions on better work or its lights out for us until the end of the 3 year period, correct?

If rONE doesn’t work, victims may have to wait 3 years to get the lionshare of their compensation (66% of compensation in locked ONE) at the end of an unlock where a massive amount of tokens could simultaneously come unlocked towards the end of Harmony’s runway.

@babakajone

But it doesn’t much matter because its a fairy tale to think it will maintain peg or any long-term value at all because some random forum guy had an idea about DeFi one day that he can’t even articulate. The victims take on all the risk of this pipe dream and hopefully make it to the end where they get 1:1 ONE in three years. To add insult to injury, the victims will be holding the bag again. Wen rONE recovery plan? I hope this back of the napkin DeFi utility works guys. Otherwise, see you in 3 years.

@babakajone

That’s another massive assumption here is that ONE will even maintain $0.0264 by the time that event hits. Its not fair to consider the R1 proposal is a guaranteed 66% parity value in 3 years. That’s actually a significant risk as well that it even maintains $0.026 with only 3 years of runway. That could very easily result in sub-$0.01 ONE when the victims finally get it which could reduce the parity received under the R1 plan below 50% after all is said and done with the same inflation. Its shifting all the risk onto them to wait. And everyone else knows the billions of ONE are coming unlocked. We all know what happens in that situation with Jewel, Viper, you name it. You really think people won’t sell before they know billions will come unlocked? People track unlock day like clockwork obviously. So now the affected users wait until that day and they better hope ONE is anywhere near $0.026. Under Stephen’s proposal, they get that ONE starting now and can already go stake it for 10+% which only secures the network. Everybody needs to rally behind ONE because it will increase 1) victim’s compensation, 2) validator rewards, 3) treasury cash impact, 4) grant funds available, 5) happy hodlers making money, and on and on and on. Incentivize ONE with everything. This is off target. Yes, they can rage quit and take whatever that amounts to but again, I think that will result in a death spiral.

@babakajone

The ONE for 66% compensation, its locked. And the 66% is based on maintaining a $0.0264 price by that unlock date in 3 years. Harmony only has 3 years of runway and everyone will know of this unlock so there’s legtimate headwinds. Stephens Proposal will pay ONE monthly starting now so while users still have exposure to ONE’s price, its not at the end of the 3 year runway with potentially billions unlocking on the same day for a rush to the exit to maintain this 66% parity. Its a misleading figure.

The rONE Plan has Significant Leakage to Unaffected Wallets

@babakajone

Even though there is a smart barrier to redemption, users can buy depegged assets and mint rONE to sell at a profit which were not affected by the hack, correct? This is stated as one of your goals, attempting to repeg these assets. By trying to “repeg” its simply providing this limited exit liquidity to traders and subjecting the pool to even more selling pressure than real hack victims, right? So its a worse use of $5M than sweetening the pot of Stephen’s. Anyone can mint rONE and sell it at $0.30 on the dollar and the algorithm will print more rONE to maintain this so long as depegged assets trade under that amount in DeFi even though they cannot redeem it under a penalty withdrawal?

@babakajone

The Tranquil Proposal had this in there so at least $1M of this was proposed for that. Giving any smart speculator who never even got hacked but buys under $0.30 on the dollar a triple up in ONE selling rONE minted. The liquidity pool proposal here was from Harmony’s Treasury to pay for those profitable trades? Not even going to help the victims at all who have held all the way down to $0.10 on the dollar waiting.

rONE Adds Risk of Loss to Victims Based on Unexplained Price of rONE in Liquidity Pools v. Minting Price

@babakajone

What are they supposed to do if they mint early before the liquidity is balanced out? Assuming the rONE minting contract will base each users token amount when minting on the rONE price in the liquidity pool. If a user who lost $1,000 mints rONE before the arbitrage and receives “$300” in rONE at $0.01 they would receive 30,000 rONE and it subsequently drops in this liquidity pool to $0.005 they only actually now have $150 in USD purchase power. And they can’t get out other than realizing this loss furthering the downward price spiral by swapping out of it or redeem (death spiral). Add rage quitters into this and it could get ugly.

@babakajone

If 30% of the parity value only is redeemed for approximately 10% of the parity value under the early unlock through the 33% redemption window and the ONE price is something like $0.02 at unlock, it would not amount to a 50% reimbursement. It would be 10% parity value from the early redemption and the locked one is forfeited, right? So the only way it would be better is if the following assumptions hold 1) the rONE price is maintained so that when a user mints 30% parity value, they do not lose value by holding, and hold the entire 3 years and 2) ONE price is higher than $0.0264 when unlock happens. Of course if they mint and rONE price goes parabolic, they could be totally reimbursed from this alone by selling it or redeeming it. It just depends almost entirely on prices.

@babakajone

Without these pools, rONE will only be exitable through the redemption process at a 50% haircut for the first month or additional 67% hair cut for most people after the first month (unless they wait for the linear penalty model to increase) through redemption. So they can’t really get out without a huge haircut and this forfeits their locked ONE. So a person taking early redemption is only going to get close to 15% parity (50% redemption in the first month if they met the snapshot) value or even 10% parity value (33% redemption after the first month until it increases towards the 3 years). So in that scenario, how is it you are so certain it is better?

Alternative Proposal

@babakajone

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.

@babakajone

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.

Comparison to Stephen Tse 1.0

@babakajone

It really isn’t an improvement though.

Stephen’s printed 2.5B at $0.02 for the 50% reimbursement.

@babakajone

Harmony could simply allocate that same $5M Treasury ask + 2.5B ONE to Stephen’s to improve it and ultimately it would be very similar without as much risk as I’ve already voiced and faster payment which allows victims to participate in the entire 3 year runway instead of being pushed all the way to the end of the road for the lion share of the compensation.

The proposals print the same amount in these scenarios 2.5B, however, under Stephen’s, parity value is at a lower price of $0.02, we take less risk that the chain survives a full three years, and the unlock price is maintained after a massive unlock and the risk that rONE actually works and doesn’t just enure to the benefit of unaffected wallets speculating in and swapping it.

[Bigfeettalking]

I found Harmony through cheeky crypto. They mentioned how great the harmony community is. Recover ONE group has done a good job.

I went back & read ur comments. You are against community proposals & show support for the core idea. Last week in discord i read Core anons are against the community ideas & want to stop their input.

I think this plan is good & comprehensive.

In the end if harmony fails to grow & lead all plans fail.

[theacidhoe]

@mbarret3 can you update the docs links? They don’t seem to be working.

[MaewouOne]

As this proposal stands, we are still AGAINST it.

Why?

1. instead of quickly reimbursing the victims, it makes them take a risky gamble with what were initially their stable and blue chip coins
2. on a duration totally disconnected from the reality of the crypto sphere
3. that the victims are the only ones to bear
4. while having to pay the authors of this risky arrangement 5% of their own money
5. a proposal that does not improve S.Tse’s initial proposal and that only substitutes a volatile shell for a stable coin, betting on a hypothetical rise, itself based on mechanisms that have already proven their inefficiency in the DeFi

Therefore, we are willing to accept this proposal only if the following variables are applied, in order to minimize the risk and accelerate the recovery of depegged assets and of the whole Harmony eco-system.

1. A significant financial contribution from Harmony’s treasury greater than or equal to 50%
2. A minimum initial parity greater than or equal to 80%
3. A parity value of ONE at a price of less than or equal to $0.015
4. A reimbursement period of less than 2 years
5. A highest rate for staking rONE, possibly greater than or equal to 20%

As an example, here are the numbers for 1000 1USDC:

Screenshot

[Bigfeettalking]

It seems like babakajone wants whatever the core plan is & MaewouOne wants the impossible (to liquidate everything). Very interesting to see what going on in here but somewhat obvious at this point. These two anons seem like false Pied Pipers for core. Good cop, bad cop, …both dishonest anons.