Harmony’s core team proposed a hard fork in order to create additional ONE tokens. To reimburse Harmony’s June exploit victims, the team proposes minting new tokens.
Harmony’s core team proposed a hardfork to create billions of new Harmony (ONE) tokens. This proposal is part the plan to compensate victims of last month’s bridge hack.
Harmony is a Proof-of-Stake (PoS), blockchain that offers a cheaper and faster alternative to Ethereum. The native asset used to pay transaction fees on the network is the ONE token.
A hacker took $100,000,000 of crypto assets from the Harmony-run Horizon bridge on Ethereum in June. Victims have requested a refund since then.
The team suggested Wednesday that the community fork the Harmony network to create a new supply of tokens and initiate the reimbursement process. The proposal stated that this proposal would require a hard fork to the Harmony blockchain because it will increase the supply ONE tokens.
Choices worth billions of dollars
Community members had two options when it came to deciding how many tokens they wanted to mint with the latest proposal.
First, the team proposed minting 2.48 billion ONE tokens (49.6 million). This would provide 50% compensation for victims at today’s market price of $0.02/ONE token.
You can also mint 4.97 billion ONE tokens ($99,000,000) to provide full compensation for victims.
The team claimed that hack reimbursement should not be paid from the treasury. It argued that the foundation wanted to preserve its assets for growth and ecosystem planning. It stated that it decided not to use the foundation treasury for hack reimbursement, as reimbursing from this fund would severely hinder the foundation’s ability support Harmony and its ecosystem growth.
The majority of comments made on the governance forum indicate that people are unhappy about the proposal. This is due to the inflationary effect of the new tokens being manufactured. Many people argued that this would cause a decline in its value.
“DO NOT MINT MORE!” This will cause serious problems for those who stake. We didn’t learn anything about inflation. One commentator said that if you increase the supply, then the price doesn’t follow.”
Currently, ONE has a total supply of 13.1 billion tokens. If the plan is approved, the team will increase ONE’s supply by anywhere from 19% to 38% in the next three-years. The proposed plan of action will be implemented and affected wallets will need to claim their tokens each month for the next three years.