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The Horizon bridge exploit on Harmony has led to ongoing discussions about its impact on AAVE and its users, with concerns about locked assets and bad debt accumulation. Various solutions have been proposed, including a notable one by ThunderingTias to use Harmony’s rONE distributions and 50% of AAVE treasury profits to replace collateral, aiming to reactivate Harmony and recover the ONE token.
What is this about?
The community is still engaged in discussions about the Horizon bridge exploit on Harmony and its impact on AAVE and its users. The main concerns revolve around the assets locked on the Harmony blockchain and the accumulation of bad debt. Various solutions have been proposed, including liquidating all debts vs collateral, compensating from AAVE's own funds, and freezing all reserves on the Aave V3 deployment on Harmony. A notable proposal by ThunderingTias suggests using all of Harmony’s rONE distributions and 50% of AAVE treasury profits to buy and replace collateral put in by AAVE users on Harmony. This proposal aims to reactivate Harmony and recover the ONE token stuck due to AAVE's failure to liquidate bad debt. The discussion has been further fueled by the revelation of a hack on the Horizon Bridge in June 2022, which led to a loss of around $100,000,000 and an excessive printing of 1Assets like 1USDC and 1USDT, causing their value to decrease. Despite the devaluation, AAVE maintained a 1:1 price ratio, which some individuals exploited by buying the depeg assets at a lower price and depositing them into AAVE. This information was shared by Mbarret3, who is seeking community support to move forward with a recovery proposal217.
How is the community reacting?
The community's reaction is a mix of frustration, concern, and hope. Users like Tepetoeasy and ThunderingTias have expressed frustration over the inability to recover blocked funds even after a year, with the latter specifying it's been 15 months 215,216. They also mentioned that AAVE and Harmony seem to be unresponsive or indifferent to the issue216. Despite these concerns, the community is actively discussing potential solutions and showing solidarity, demonstrating the community's resilience and commitment to finding a solution.
Why this is positive?
The community's active engagement in proposing solutions and providing guidance on how to formalize these proposals is a positive sign. This shows the community's resilience and commitment to finding a solution. The proposal and the ensuing discussion demonstrate active community engagement and leadership. If successful, the proposal could help recover the ONE token stuck due to AAVE's failure to liquidate bad debt and improve Aave's reputation.
Why this is negative?
The situation has led to a lack of liquidity and the accumulation of bad debt, which could have a negative impact on AAVE's reputation. There are concerns about misleading information displayed on the platform and the potential for further devaluation of the 'one' due to insolvency issues. The community's frustration is evident, with some users feeling that their funds are being held hostage. There are concerns about the feasibility of the proposal, its impact on Aave's revenue, and the method of purchasing ONE tokens. The community is also frustrated with the lack of action from AAVE and the Harmony protocol. The voting process has been criticized, with reports of a single vote from a user with a large amount of AAVE negating all other votes. Owen from The Defiant is working on a story about the recovery efforts following the Harmony hack, with a specific focus on the deployment of Aave on Harmony. He has already interviewed Matthew of R1 and is now seeking to interview someone who has had their assets borrowed indefinitely via Aave as a result of the hack. He has invited interested parties to reply to his post or contact him via email or Twitter218. Ben2k reported that 0VIX had an incident but has already resolved the negative debt issue. However, he expressed disappointment that some funds are still locked219.
Posted a year ago
Last reply 24 days ago
Summary updated 23 days ago
Last updated 03/12 08:00