Harmony Updates Horizon Bridge Asset Recovery Plan

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Harmony Updates Horizon Bridge Asset Recovery Plan

Harmony released an update concerning its Horizon bridge asset recovery proposal on September 23, 2022. The team is proposing not to mint more $ONE tokens or change its tokenomics with a hard fork of the protocol. 

Harmony’s Recovery Plan

As part of the recovery plan for its Horizon bridge, the layer-1 blockchain project, Harmony will not mint more tokens or alter its tokenomics. However, it proposes deploying the treasury towards both recovery and development of the Harmony ecosystem.

“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.” the team stated.

The update in the recovery plan is to direct funds into developing the Harmony blockchain’s unique scaling “advantages” of uniform sharding and to actualize the project’s long-term vision of global network adoption as well as ecosystem growth.

Harmony stressed that a long-form post will soon be published for the community, detailing how the project will collaborate with partners to establish mechanisms to effectively deploy the funds that are allocated for recovery.

Previously, Harmony released a proposal regarding the recovery of the Horizon bridge, which planned to mint 4.97B worth of its native token which will give affected customers a 100% of their lost funds. 

The proposal was withdrawn due to a huge backlash from the community. Some community members believed that issuing that much amount of new tokens will bring about inflation that will in turn put pressure on the value of the asset. Others felt Harmony was planning to make its customers bear parts of the losses caused by the hack. In some quarters, it was believed that the protocol was using the proposal as a ploy to corner its users into later taking an unfavorable decision.

Harmony’s Horizon Bridge Hack

In June 2022, Harmony revealed in a statement, that hackers had used the Horizon Bridge to swap $100 million worth of altcoins for Ether, stored on the blockchain of the Harmony layer-1 platform.

The attack lasted for hours and the hackers were able to steal ETH in several transactions, the first transaction, 4,919 ETH, followed by several smaller transactions ranging from 911 to 0.0003 ETH until the operation was shut down.

In a desperate bid to fish out the hackers, Harmony announced a $1 Million bounty program for the return of the stolen funds and later increased the reward to $10 million. The blockchain project also stated that it would not press charges against the hackers should the funds be returned to the protocol. Their plea to the hackers fell on deaf ears as the bad actors began laundering their loots to several crypto platforms including the embattled Tornado Cash.

This situation with Harmony is one of a series of attacks that have affected the crypto space since the market took a downturn. More recently, crypto market maker Wintermute suffered a security breach where the hackers made off with around $160 million. 

Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.