Reimbursement Proposal [Horizon Incident]

There is no perfect solution.

Snapshot at day before the hack: Seems resonably fair. But includes people who sold during the hack to save themselves in the compensation. (Who may at this point have even left the chain, and have no plan of returning)

Snapshot day(s) after the hack: Weeds out some of the people who sold to save themselves. But starts including speculators who were never a part of the incident to begin with.

Buy back and burning (artificial repegging) would in my opinion be the best solution as it includes a bit of both. People who have held their assets get rewarded, speculators who have supported the assets till now get rewarded. (People who sold are excluded, and short term speculators are excluded)
But it does pose itā€™s own problems and risks of course.

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Could Harmony and/or @stse provide some clarification on a few details from the original post/proposal?

I know the reimbursement strategy is being reworked, but I assume some of these items/ideas will still be implemented as part of the forthcoming updated proposal.

There are also a few key details that may not have been discussed in the original proposal. Could these also be addressed?


Making Reimbursement Claims

An affected user will be able to claim their ONE coins:

  1. Monthly when each distribution is made
  2. Sporadically over the course of the 3-year distribution period (but only up to the amount of ONE that has been distributed as of that point in time)
  3. All at once at the end of the 3-year period

Is that correct?

Will there be a ā€œgrace periodā€ after the claim ends on ā€œOctober 30, 2025ā€ to allow users to collect their final distribution (e.g., a month, 3 months, 1 year, etc)? Or is that the one and only day to claim the final distribution?


What Happens to Unclaimed ONE?

What will happen to the coins that are not claimed by the end of the distribution and/or grace period? This should be stated in the proposal.

I suggest unclaimed ONE either be burned or used to buy back unpegged assets (and burn the unpegged assets).


How is ā€œLostā€ Value of Tokens Calculated?

Currently 1USDC is ~10Ā¢. Would that mean a wallet would be reimbursed 90Ā¢ for every 1USDC they hold?

At that point, Harmonyā€™s already reimbursing nearly the whole unpegged token (aka, a ā€œbuybackā€), but without any of the additional benefits of buying back the unpegged tokens.

Which leads to the next suggestionā€¦


Burn Pegged Assets During Reimbursement Claims

This is straight-forward and could potentially improve the pegā€™s status.

In order for a wallet to claim their reimbursement ONE, they need to exchange the unpegged assets that were recorded in the snapshot. These unpegged assets would then be burned. This should be part of the claim process.

Doing nothing about the unpegged tokens is not an advisable strategy.


Two-Week Discussion Window

This is stated in the VDAO Charter. All proposals require a 2-week discussion window. Please abide by this. The initial proposal only offered 6 days of discussion, eschewing established practices.


Governance Voting is Broken

How does Harmony intend to hold a governance vote on reimbursement when itā€™s currently impossible to hold a proper vote? This has been an issue since February. Will Harmony help resolve this issue prior to holding a reimbursement vote?

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I would appreciate if someone from Harmony could spend 20 seconds replying to the questions here please:

Thank you.

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The difference is that users who have assets locked and frozen in AAVE seem to be in a similar situation to Celsius customers. The rest of the users still have a choice between selling or waiting for the solution.

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No reimbursement should be the proposed way, Iā€™ll try to explain why (FYI, I invested heavily on Harmony myself but didnā€™t not get my funds stolen). As an investor especially in the crypto space, you should be well aware of the risks. By putting your tokens on the bridge you accepted the risks that come with smart contracts/exploits/bugs. It was your decision and you got hacked because you did not make sure the technology was mature enough and did not make enough research to establish the maturity and test coverage of those smart contracts. So, you got hacked, it is also your fault as an investor, so go after the hacker instead of damaging everybodyā€™s investment.
That said, reimbursing by issuing more tokens is going to be devastating for all Harmony investors, not just the ā€œhackedā€ ones. If you cannot find a way without damaging the tokenomics then the right way should be no reimbursement indeed.

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@harmonyprotocol

If you are unable to quickly restore a full repegg, you will be required to prove to us that every effort has been made (but failed) to fund a full repayment of our assets entrusted to you.

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And more fund sourcesā€¦

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Hello, first step is to learn if Harmony Team is aware of the situation with AAVE? Iā€™m trying to establish it here:

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They list AAVE in the table at the bottom of the proposal.

Easy to say when you did not have any loss. What do you do with all ONE holders stuck on AAVE after trusting Harmony team which incentivised the lending of AAVE to build the defi of harmony and now all the ONE holders are currently stuck, impossible to withdraw.
No reimbursement or reppeg is clearly not an option for the future of harmony. (Your ONE bag would go to 0 anyway)

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Itā€™s not easy to say zoufou, I lost enough money on investments to know the pain myself but I accepted it and learnt from it. Iā€™m also one of the MtGox creditors as well so no, it is not easy to say. Still what you should accept though as an investor. What if you invested in real estate and the house would come down due to an earthquake and you didnā€™t have an insurance? What then? Next time youā€™d do the insurance and learn to better diversify your investment. Consider that an investor with no losses does not exist in history (if youā€™ve done it long enough). Losses are going to be there, you just have to learn how to minimize them and have more profits than losses.

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Says the guy who push for no reimbursement by thinking it will minimize his lossā€¦ but it will put your one bag to 0, that will be the result and harmony fundation will be sued in court.

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Youā€™re not really addressing any of the comments I made, your only point is basically that since I have lost no money in this case then I canā€™t have an opinion which makes no sense at all. Reimbursing by issuing more tokens is only going to bring down ONE a lot, there is going to be a huge dump. So why the community should agree on that (community being EVERYBODY that invested in Harmony, not just you poor soul that lost his money because didnā€™t think where it was putting his tokens)? Thatā€™s basically killing the project.

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Yes, I see they list it but the question is about assets being frozen / locked:

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Okay so first of all, read the full thread and you will understand how it evolved: harmony is reworking on the plan.
Secondly, thats not a hasard if you are the only person asking for no reimbursement. And giving life lesson on investment, come onā€¦
Thirdly, you can have your own opinion, i dont want to debate with you, thatā€™s my last reply. If you feel enough childish to continue replying then go ahead.
Now lets refocus on the hack issue.

Thatā€™s not really ā€œlife lessons on investmentsā€ though, I was just explaining that when investing whatever happens is on you. You shouldā€™ve known that actually, the fact that you didnā€™t (donā€™t?) is quite self-explanatory. So just learn and move on.

Let me clarify. I donā€™t have to repay anything. I do not have any debt.

But my assets are frozen. So, whilst some people can move, sell etc their tokens and have some degree of freedom what to do, considering obviously tremendous loss of the value, Iā€™m not able to do anything at all.

Let me clarify your funds have been borrowed and no one repay their loan so you canā€™t withdraw.

I would be more than happy if this gets resolved and I can access my last funds Iā€™m holding on Harmony.

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Yes, I agree, however all other markets / chains seem to be functioning well and withdrawals are possible. Therefore there are no doubts that root cause of our problems is bridge exploit.

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