Harmony Proposes Issuing ONE Tokens to Reimburse Victims of $100M Hack

Developers decided against using treasury funds, citing the project’s long-term viability.

AccessTimeIconJul 27, 2022 at 10:09 a.m. UTC
Updated May 11, 2023 at 6:42 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Developers behind blockchain network Harmony proposed issuing ONE tokens to cover losses from the hack of its Horizon bridge product in June.

“The Horizon bridge incident resulted in the loss of $99,340,030.00 worth of digital assets across approximately 65,000 wallets and 14 different asset types,” the developers said Wednesday in a proposal posted on the protocol's governance forum. “The Harmony team feels it is important for the overall strength of the ecosystem that harms to impacted wallets are mitigated in a manner that is feasible and most viable for the project.”

The developers presented two options. The first proposes an estimated 100% reimbursement with the minting of 4.97 billion ONE, which equates to 138 million tokens a month over a three-year period. The second proposes an estimated 50% reimbursement. That would see a minting of 2.48 billion ONE, or 69 million tokens monthly over the same period.

Both proposals are based on the current token price of 2 U.S. cents, meaning the reimbursement amount would not change if the ONE price was to fall further. That level is a 95% drop from ONE’s lifetime peak of 37 cents in October 2021.

Harmony said the stolen tokens caused contagion damage in the form of uncollectible loans “across a handful of DeFi lending protocols” in the Harmony ecosystem, referring to decentralized finance.

“Failing to resolve these uncollectible loans may result in DeFi lending protocols choosing to drop support for Harmony on their platforms,” developers explained. They added that 86 million ONE will be minted as part of the reimbursement plan, and distributed to “certain affected DeFi protocols” over the same three-year period.

Community voting on the proposals will start Aug. 1 on Harmony’s governance forum and close Aug. 15. Community responses were generally negative at writing time, with users concerned about the effect of increased token supply on ONE's price.

Harmony said it chose not to use its treasury funds to reimburse users as it was against “the interest of the longevity and wellbeing of the project.”

The Horizon bridge allowed users to exchange assets such as tokens, stablecoins and non-fungible tokens (NFT), among the Ethereum, Binance Smart Chain and Harmony blockchains.

Security firm Elliptic linked the attack to North Korean hacker group Lazarus based on the movement of stolen funds occurring mostly during Asia-Pacific nighttime hours and the attack using techniques that were “frequently used” by the Lazarus Group, as previously reported.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Read more about