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