This is part of why I mentioned before that it’s complicated and wanted to table the discussion till later.
But the reality is that currently this and these types of value extractions are just the reality of static pairs and an inefficient system that is still a work in progress. Where decentralization has been prioritized in the short term, both necessarily and rightfully so to allow this type of finance to even exist as it does.
That being said, there is nothing about any of this that is specifically a “1assets” issue or problem in any sense. Did the extremely low liquidity and formally stable but now unpegged assets provide a particularly ripe situation as a consequence? Yes, absolutely. But this is absolutely simply a ecosystem wide defi problem that as much as it is ripe to be exploited in the short term, is even more ripe to be something that we can work towards solving. And the rewards for leading in that area will be immense once people begin to catch on how much money is leaking out that can be directed back at improved protocols and the users who participate. But again, it’s not really 1asset specific and I understand what you mean about the voting, but also in almost all cases it’s quite literally just a flashswap function built into to Uniswap that is free to use and charges the arbitrageur nothing(can rarely be an Aave flashloan for some more complex transactions as well but last I checked they do charge interest for that). I don’t have a strong opinion either way about this specific case or what would have been their potential influence on voting any more than I do about the danger of whales dominating governance in general, but I could be easily swayed either way if it turns out to be something matters in the future restoration effort.
One interesting thing to point out is that Harmony did a very good job of stopping massive amounts of spam a few months ago(prehack) that turned out to be related to this issue. I’ll save the details for now, but the competition between bots was fierce. And due to the way Harmony ordered its transactions previously before they came up with a fix, people running bots figured out they could gain an edge over each other by spamming as many transactions per block as they could get away with. Harmony ended up fixing that issue and subsequently saved anyone involved in running the network(ultimately everyone holding ONE) a very substantial amount of money due to costs being inflated by the transaction spamming.
So that is one example of Harmony actively solving or mitigating these types of things. If it were up to me all forms of arbitrage and any MEV related activities that weren’t direct attacks on users but siphoned capital away from the ecosystem, would instead go to the protocol(having to incentivize MEV searchers on Ethereum or just in general makes that a lot more complicated than simply capturing all the clear low hanging fruit of arbitrage though, outside of our scope mostly anyway).
That’s more of a long term goal of mine rather than something I’d expect to happen right away though. On a longer time frame working to maintain a sufficient level of decentralization while improving the efficiency of these types of systems and capturing more of that value back to both users and protocols is one of the things I find most interesting. And if Harmony is still Harmony, which I believe it is, then being at the forefront in the tech area and solving these issues in both novel ways, as well as researching and either establishing direct connections with the devs who are as well or simply implementing the protocols ourselves will easily give us a huge edge.
If I seem too optimistic or confident that we can recover, it’s because of things like this. Where I know specific areas that are sorely lacking but simultaneously both unknown by the vast majority of people, yet slowing coming to a boil in the types of circles where all the proverbial bear market innovation happens. Add things like that as part of a multi-pronged approach that naturally supplements and creates a better, more efficient UX for the already established NFT and gaming strategies and longer term the restoration will be more like a rebirth. Horrible short term luck that turns into an opportunity to start fresh and rebuild. Not being encumbered, not being tied to old failed economic models. The chance to leap a few spaces on the tech tree because of those lessons and their closure. Being gifted the opportunity to reshape the failed ideas of the previous cycle in a way that will be instantaneously recognizable as better by users who have been exploited and will know what to avoid next time.
Harmony should be able to reestablish itself and standout as the best option for users looking for something better, the same way it did by having such a huge edge in core tech back then. But this time I believe it will finally be more about what you make out of that tech and how it can be applied to solve problems at scale. And rather than the theoretical problems Harmony could solve now there are real, actual problems that necessitate theory be put in to practice.
and still will participate in the vote. It’s my individual choice, ok? Then I will unstake my 1Assets.