The developers’ proposal involves a hard fork of the network

Harmony network unveils plan to return user funds

27.07.2022 - 11:15

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2 min

What’s new? The developers of Harmony, a layer 1 (L1) network, have proposed a plan to reimburse customers affected by the June 24 Horizon cross-chain hack. According to the announcement, compensation will be paid in native tokens ONE monthly for three years. In addition, the developers’ initiative calls for a hard fork of the network. The proposal will be voted on from August 1 to August 15. The team noted that Harmony’s current financial condition limits its option to provide a solution that involves immediate reimbursement for losses.

Harmony’s plan

A hard fork is a process of splitting the main blockchain into two separate networks. In a hard fork, the developers drastically change the project’s protocols and algorithms, and create new tokens that are in no way related to the old version.

Offer details. Harmony’s plan contains two options for conducting a hard fork. The first one involves a 100% reimbursement with the issuance of 4,97 billion ONE, with a monthly issuance of 138 million tokens over a three-year period. The second one is a 50% reimbursement with an issue of 2,48 billion ONE, in which case 69 million coins will be issued each month.

The Harmony team also reported that the Horizon bridge hack has left it in arrears to several DeFi lending protocols. Failure to repay the loans may lead to the protocols deciding to drop support for Harmony on their platforms. As part of the reimbursement plan, another 86 million ONE will be issued and distributed to DeFi protocols over the same three-year period.

As of July 27, 11:30 UTC, ONE is trading at $0,019, down by 1,34% per day, according to the Binance exchange.

The Horizon hack resulted in hackers withdrawing $100 million in cryptocurrency and then exchanging the assets on the Uniswap exchange. On June 26, the developers of Harmony offered the attackers $1 million for the return of the remaining funds and information about the exploited vulnerability, later increasing the reward to $10 million with a deadline of July 4, adding that they would oppose criminal prosecution in this case. On June 28, Harmony said it was cooperating with the FBI and blockchain analytics companies to investigate the hack.

In June, analysts at Elliptic accused the North Korean hacker group Lazarus Group of hacking Horizon. They pointed out that the specifics of the exploit and the laundering of stolen funds through the transaction mixer were similar to other incidents in which Lazarus was confirmed to be involved.

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