Harmony announces update on Horizon Bridge attack recovery plan

Quick Take

  • Harmony protocol updated its community and partners on the Horizon Bridge recovery plan after its $100 million hack in June.
  • Harmony originally proposed minting billions of ONE tokens to compensate the hack victims, but has now provided an alternative plan using treasury funds.

The Harmony protocol team announced an update for its community and partners regarding its asset-recovery proposal, intending to preserve Harmony’s blockchain without minting new tokens, following the $100 million Horizon Bridge hack in June.

Harmony is an effective proof-of-stake (EPoS) sharded network with a cross-chain model that aims to make it the Layer 1 trustless bridge across all chains.

The hack exploited the Horizon Ethereum Bridge — a cross-chain bridge to migrate assets between the Harmony and Ethereum blockchains. The attackers stole BUSD, USDC, ETH, and WBTC assets worth $100 million, before swapping all tokens to ETH and proceeding to launder the funds.

Harmony offered a $1 million bounty to return the stolen funds, to no avail. Harmony’s core team then proposed a hard fork to mint billions of new Harmony ONE tokens as part of a plan to reimburse hack victims.

At the time, the core team argued against spending its foundation treasury, saying the funds were for growth and ecosystem plans. The Harmony community appeared unhappy with this proposal on the governance forum, concerned at the inflationary impact of such a mint. The proposal was subsequently withdrawn.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

In the new proposal, announced today via a blog post, the Harmony team said that after listening to Harmony’s validators and community, it shared the goal of “preserving the foundation of the Harmony blockchain with 0% minting,” and now proposed to use the foundation treasury for recovery funds.

“We propose not minting more ONE tokens nor changing our tokenomics with a hard fork of the protocol. Instead, we propose deploying our treasury towards both recovery and development.”

Harmony added that in coming days it would provide a more detailed update outlining the mechanisms to deploy the funds allocated for recovery.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the latest market updates. You can get in touch with James on Telegram or X via @humanjets or email him at [email protected].