In order to reimburse the victims of the Horizon bridge hack that saw around USD 100m of user funds stolen, Layer-1 blockchain Harmony has proposed to mint billions of its ONE tokens.
Harmony would have to hard fork and increase the supply of ONE to mint new tokens. Due to the treasury’s limited ability to provide immediate reimbursement, the team said reimbursement would span over a three-year period and be in the form of ONE tokens.
In a blog post, the Harmony team presented two working options and asked for the community’s feedback.
The first option is “an estimated 100% reimbursement” that proposes minting ONE 4.97bn, which equates to a 3-year monthly emission of 138m tokens, or around USD 2.76m, using the token price of USD 0.020.
The second option is “an estimated 50% reimbursement” that suggests minting ONE 2.48bn over a three-year period, which translated into a monthly emission of 69m tokens, worth around USD 1.38m using the token price of USD 0.020.
“The amount of ONE distributed will be based on the USD value of tokens lost across impacted wallets from the time we perform a snapshot,” the team said.
ONE tokens will be distributed based on the number of pre-calculated values and not based on their fiat-currency value.
Based on the snapshot, this means that affected users would receive a specific amount of ONE, regardless of the token’s price. Some users argued that this “doesn’t make sense,” suggesting that it should change based on market value.
Many users, however, condemned the team for wanting to “print money” out of thin air, arguing that “more supply usually means lower prices”, driving the price down for others in the community.
The team however, said that they decided against using the treasury “in the interest of the longevity and wellbeing of the project as reimbursing from the treasury would greatly hinder the foundation’s ability to support the growth of Harmony and its ecosystem.”
As reported in late June, a hacker took advantage of the vulnerability in Harmony’s Horizon Bridge, which allows token transfers between the Harmony network and Ethereum (ETH), Binance Chain (BNB), and Bitcoin (BTC), and stole USD 100m worth of different crypto assets.