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Last week, after near-universal condemnation, Harmony’s blockchain leaders dropped their offer to reimburse community members who lost money in a $100 million hack in June.
The Tier 1 network, which has a market cap of $346 million and competes with other high-speed blockchains like Solana, has been struggling to stabilize its situation ever since.
Now, co-founder Steven Jie is offering a couple of new suggestions. From his proposal, there was the use of the Harmony Foundation’s treasury to partially reimburse token holders for several months and replenish the treasury by minting new ONE coins for several years. Another proposal involved an increase in transaction fees and refunds, as well as “ecosystem growth.”
Options and trade-offs
“Over the past few days, we have conducted many calls to discuss options and compromises, involving more than 20 validators, 20 community members, and 15 bridge and DeFi partners,” Jie wrote on the management forum, discussing the initial proposal.
“We sincerely appreciate the cooperation and support from our community, partners, validators and their delegates.”
Although the debate over the new proposals was limited, some of those who responded to Jie expressed gratitude for hearing at least something from the leadership.
According to the participants, the hack simply highlighted many of the long-standing challenges facing blockchain.
Interviews with Harmony validators — the people who run the distributed technologies needed to secure the network and verify transactions — paint a picture of a community that was dysfunctional long before the hackers fled with $100 million.
Validators say Harmony, led by Jie, Rongjiang Lan, Leo Chen, Li Jiang and Ganesha Upadhyaya, is problematic. The main reasons are the reluctance to engage in consolidation among validators; unfulfilled pledges of funding to partner organizations; and little interest in fixing a broken management system that makes it impossible to gauge community support for proposals to address important issues on the network.
Harmony executives did not respond to a request for comment on the story.
“They were just sending me from one person to another, it was kind of a circle out of nothing,” a validator under the pseudonym PiStake commented on this situation.
While Harmony leaders believe they’ve found a way to get rid of the hack, validators say the platform is haunted by another problem.
Validators manage nodes, the technology needed to process and verify transactions on the Harmony blockchain. To do this, they must “steak” their own Harmony token, ONE, and bet on one of the 800 available validator slots.
Validators who spoke to The Defiant said Harmony’s promise to fund thousands of decentralized autonomous organizations, or DAOs, is a symbol of the organization’s mismanagement.
Another problem was the funding cuts for the Community DAO and validator DAO. This deprives participants of the motivation to work and develop the blockchain further. At the same time, validators accuse management of unfair awards for other DAOs.
Back in March, the harmony website touted its commitment to the DAO, the leaders- teams that use blockchain technology to organize.
“Harmony is donating $300 million to our open DAO community,” the website says.
What’s more, project management has all but stalled since moving to the Snapshot voting platform. The fact is that Binance has a large number of ONE steaked tokens on validator nodes, but the company rarely participates in management. To make decisions, 51% of nodes must be involved. Therefore, binance’s inaction stops almost any decision.
Author: Anton Zaitsev, Analyst at Freedman Club Crypto News
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