Harmony has unveiled proposals to mint 4.97 billion worth of its utility token ONE as it explores options to compensate victims of the $100 million Horizon Bridge hack in June.
That proposal has now generated a lot of backlash from its community as many members stated that minting such an amount of new tokens will result in inflationary pressure on the asset, pushing its value down.
Harmony unveiled its reimbursement plan via a post on its official Twitter page, asking the community to engage with the proposal and share their feedback with the team.
Unfortunately, the feedback has been brutal, with one user calling the proposal disappointing. According to the user, “ The proposal is disappointing. There are no other options. It seems to be either minting more tokens or minting more tokens. If we disagree, there will be no disbursement as per your proposal.”
Speaking about the situation on the ground, the Harmony team stated that the security breach impacted nearly 65,000 wallets across different asset classes. The team added that they had worked tirelessly to find a solution and chart a way forward.
The proposal on the ground
The Harmony team has stated that so far, it hasn’t brainstormed a solution that will result in immediate reimbursement, adding that the harmony treasury isn’t in such great shape. They have now offered two options related to minting billions of ONE token via a hard fork.
The first option proposes 100% reimbursement via minting 4.97 billion new ONE tokens. The second option proposes 50% reimbursement with 2.48 billion ONE tokens disbursed over three years.
While the company is awaiting a green light from the community to kick off the hard fork, the proposal has been met with negative feedback, with the majority of comments voicing strong rejection of the idea.
The community believes that Harmony is copying the Terra ecosystem approach following its collapse several months ago, adding that such a move will only push the value of ONE token down and may push investors away from the blockchain.