The Harmony (ONE-USD) network is one of the projects hardest hit by crypto hacks this year. Losing $100 million in assets at the hands of one of the world’s most infamous hacker groups rubs salt in a wound inflicted by the bear market meltdown. But as developers try to pick up the pieces, they are facing backlash. Is making more ONE crypto the answer to the project’s issue?
The first half of 2022 has been a devastating one in terms of hacks. An estimated $1 billion has already been stolen from around the crypto space, and this is a conservative figure. It’s a problem that’s in immediate need of solving if the industry hopes to get into the good graces of both the public and government.
Harmony’s hack is one of the most devastating of the year, too. The network was attacked in June, with hackers exploiting a bridge vulnerability to siphon $100 million from the project. These assets consisted of Ethereum (ETH-USD), Bitcoin (BTC-USD) and various stablecoins.
If this were not bad enough, the culprit behind the attack adds an extra layer of drama to the fore. Security experts have identified the hacking outfit Lazarus Group as the perpetrators of the attack. The Lazarus Group is a North Korean entity, sponsored by the North Korean state. It executes massive blockchain hacks and uses the stolen cryptocurrency to help fund North Korea’s nuclear development program.
The Harmony hack caps off a steep plummet in value the ONE crypto has been seeing throughout the year. The coin has seen a loss of over 90% since January, taking ONE-USD’s price from 36 cents down to its current two cent valuation.
Harmony Network Proposes Controversial Idea to Mint New ONE Crypto
Now, Harmony developers are trying to pick up the pieces, in an attempt to reverse on at least some of the losses. However, the proposal these developers are brokering with investors is proving to be quite unpopular.
What’s one way to pay back the many Harmony users affected by last month’s hack? Well, developers are floating the idea of a ONE crypto mint. They would like to issue the additional tokens to victims of the hack in order to make good on the misfortune suffered.
Two different proposals by the development team offer ONE coins as restitution. The first involves a 100% reimbursement to the 65,000 wallets affected by the attack; developers would mint nearly five billion ONE over the course of three years, distributing the coins to victims. The second proposal involves a 50% reimbursement, in which developers mint nearly 2.5 billion ONE over a three year period.
The network also concedes that these proposals will help bail itself out from trouble with decentralized finance (DeFi) platforms. Some of the ONE minted would go toward DeFi pools around the industry affected by the hack; Harmony developers worry that without doing this, the network could lose future opportunity with DeFi projects.
Voting on these proposals will commence on August 1, but investors are making their feelings known now. Of course, minting more tokens endangers ONE coin prices further, heavily diluting the total supply of 12 billion tokens. Investors say they should not be made to suffer with more losses, with ONE investors pushing the network to use treasury funds to reimburse victims.
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On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
