Harmony Community Reacts to Proposal to Mint 5 Billion Tokens as Compensation

On Wednesday, the Harmony blockchain team shared a tentative reimbursement strategy for those affected by June’s Horizon Bridge attack . As the hack robbed the platform of about $99M, the devs intend to mint almost 5 billion native ONE tokens to compensate victims. 

Details of Minting Proposal

Harmony published a blog post sharing the proposal with its community members. 

The Harmony team has worked tirelessly to brainstorm and develop paths towards reimbursing those who were impacted by the recent hack of the Horizon bridge,” they wrote.

According to the team, the network’s finances cannot facilitate immediate payouts to victims of the hack at the moment. Hence to start with, its reimbursement plan will span 3 years. Harmony has limited options when it comes to reimbursement. Ultimately, the devs aim to compensate users with ONE tokens and will mint billions of coins to achieve this. 

However, such a dramatic increase in token supply will require the network to initiate a hard fork.  Users will recover their funds on a monthly basis over 3 years. They will be able to claim their ONE tokens whenever they enter their wallets. 

Two Options for Reimbursement

Harmony’s dev team shared two variations of the proposal in question. The first option suggests a 100% reimbursement which entails minting 4.97B tokens; 138M tokens monthly for 3 years. According to the publication, the tokens will progressively enter circulation within the given time frame.

Meanwhile, option 2 proposes a 50% reimbursement with only 2.48B new tokens. The team will maintain the 3-year reimbursement period, however, the monthly release will be cut to 69 million ONE tokens. Per the token’s current value of $0.20, option 1 totals $2.76M whereas option 2 comes up to $1.38M.  

Before moving on with the plan the team is gauging the community’s response. Hence, a vote regarding the proposal will commence on August 1st to end on August 15th. A post went up on the official Harmony Twitter page sharing the proposal and asking the community for feedback.

Backlash From the Community

So far, the majority of the reactions to the proposal have been negative given its inflationary nature. Many are worried that minting such a large amount of ONE tokens could cause the price to tank. Users have called for validators to vote against the proposal. 

Other community members pointed out that the team is taking a route similar to Terra earlier this year. Following the crash a while ago, the devs of the stablecoin network suggested and later carried out a hard fork. 

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Harmony users also voiced concerns that the dev team was attempting to have the community bear the responsibility for the situation. Notably, the responses also revealed the community’s anger over the team’s lack of communication of late. Certain members made suggestions of their own while very few showed support for the team’s decision.

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