Harmony (ONE) proposes issuing new tokens to compensate hackers

The Harmony protocol team has presented a potential compensation plan for victims of the Horizon bridge hack, which includes minting over 2 billion ONE tokens.

The community has proposed two reimbursement options: a full reimbursement, which would result in nearly 5 billion ONE tokens being minted and distributed over a three-year period, or a 50% reimbursement, which would result in just under $2.5 billion tokens being minted and distributed.

Because several businesses took out ONE loans with de-pegged stablecoins as collateral with no intention of repaying the ONE, ONE liquidity providers are unable to withdraw cash. As a result, 86 million ONE tokens will be issued to pay DeFi protocols over a three-year period.

In June 2022, the Horizon bridge, which connects the Harmony blockchain to Ethereum, Binance Smart Chain, and Bitcoin, was hacked to the tune of about $100 million by exploiting a vulnerability in the Harmony blockchain’s multi-sig wallet. The hack, which affected about 65,000 wallets and 14 asset categories, is thought to have been carried out by the North Korean cyber team known as the Lazarus Group.

Harmony’s offer of a $1 million bounty to the hacker in exchange for the monies returned fell on deaf ears.

Harmony’s Reimbursement Plan

Tokens will be distributed monthly and allocated according on the value of tokens lost when a blockchain snapshot is taken in the new reimbursement. The snapshot date will be decided by popular vote between August 1, 2022 and August 15, 2022.