Harmony ONE Reimbursement to holders is on the horizon. The company announced on Twitter the finalization of its reimbursement proposal amidst the recent $100-million worth of exploits that devastated the crypto startup. The genius solution? Mint ONE tokens to attempt to pay back hack victims.

Hackers last June exploited a vulnerability within Harmony’s cryptocurrency exchange system, Harmony Bridge, that allowed malicious third-party users to take away $100 million worth of coins. The cross-chain bridges, as they are called, provide connections between different blockchains, which then allows users to transfer assets (stablecoins, NFTs, etc.) between networks.

The Origin Of The Hack

The origin of the “malicious attack” was eventually linked to North Korea, to the notorious hacker group known as Lazarus, as stated by security firm Elliptic several weeks later. This conclusion was mostly assessed from the pattern of the attack, and the following laundering modus of the stolen funds.

Initially, Harmony announced a global manhunt to arrest the perpetrators, with a demand from the attackers to return $10 million worth in coins in exchange for closing the case. The company even provided a $1 million bounty (later increased to $10 million) for people who could give critical info on the investigation. However, all the case had was the main wallet of the attacker, tagged today as the “Horizon Bridge Exploiter”.

With no immediate solution in sight, the final problem lies with the users who were affected by the exploit. This brings us to the reimbursement proposal in question today. Harmony initially suggested that a hard fork on the network should be done and then mint new tokens to distribute as the first wave of reimbursement.

Harmony ONE Reimbursement Proposal

The updated proposal then elaborated further on the number of tokens to mint, giving community members at least two major choices:

Option 1

  • One, they could mind 2.48 billion ONE tokens, rated at $49.6 million, which should be enough to cover half the reimbursement value to the victims while maintaining the market of $0.02 per ONE token.

Option 2

  • Two, they could immediately mint all of 4.97 billion ONE tokens, rated at $99 million. This will be the full compensation amount, although as everyone knows, this latter option will definitely have a much bigger inflationary impact.

Needless to say, the community wasn’t exactly thrilled at either proposal, directly reflected by the comments submitted on the very Twitter post that details the reimbursement process. Indeed, minting new coins right now would be nothing but detrimental to the token’s price. Not only would it have bigger impacts than the already devastating result of the initial exploit, but it will even worsen the situation for those not affected by the hack as well.

Besides, the total supply of ONE token right now only sits at 13.1 billion. Should they go for plan A, the supply will inflate by 19%. With plan B, you get a much sharper 38% increase. All within the span of three years after the incident.