Harmony Publishes Revamped Horizon Bridge Recovery Plan

The team behind the Harmony protocol have presented a fresh proposal for the recovery of assets lost in the $100 million hacking attack on the Horizon Bridge in June this year.

Harmony initially proposed to reimburse the hack victims with the protocol’s native token called ONE, billions of which would have to have been minted in addition to the already circulating supply. The proposal also required a hard fork of the Harmony blockchain to increase the supply of ONE tokens.

However, after an overwhelmingly negative reaction from the community, the Harmony team withdrew the plan and tabled an alternative way of compensating the users that would see it use the foundation treasury instead.

According to the team, after “listening to our validators and community,” the goal is now to preserve the foundation of the Harmony blockchain “with 0% minting.”

“We propose not minting more ONE tokens nor changing our tokenomics with a hardfork of the protocol. Instead, we propose deploying our treasury towards both recovery and development,” Harmony said in a Medium post.

The team added that it is “committed to building Harmony for many years, to leverage our chain’s unique scaling advantages of uniform sharding and realize our long term vision of network adoption and ecosystem growth.”

Harmony said it will publish a more detailed update outlining the mechanisms to effectively deploy the funds allocated for recovery “ in the coming days.”

The Horizon Bridge Hack

Harmony, which is on a mission to resolve the persistent “blockchain trilemma” of balancing scalability with security and decentralization, revealed the Horizon bridge hack on June 24.

The attack resulted in a theft of roughly $100 millions in various cryptocurrencies, including Wrapped Ethereum (WETH), AAVE, SUSHI, DAI, Tether (USDT) and USD Coin (USDC), which the hackers swapped for Ethereum.

The cross-chain Horizon bridge feature enables crypto holders to move assets between Harmony's network and the Ethereum network, Binance Chain and Bitcoin.

Despite the team offering a $1 million reward for information leading to the return of the stolen funds, security researchers later revealed that the hackers had begun to launder the stolen funds through the now-closed Ethereum mixing service Tornado Cash.

Blockchain analytics firm Elliptic also published a report on the attack, saying that the manner in which the funds were stolen and subsequently laundered pointed to the involvement of Lazarus Group, a notorious North Korea-affiliated cybercriminal organization.