Harmony crypto flourished in the 2022 first quarter before the scandalous $100M the next quarter. Also, the protocol suffered extended losses as the broad market resorted to downturns.
Nevertheless, the hacking meant Harmony suffered in social and network metrics. Surprisingly, the attack occurred on June 13, and the Harmony team is yet to reimburse the victims. Meanwhile, a recent news release revealed details of the compensation plan.
The Notable Three Months
Harmony continued to suffer since last quarter amid various pessimistic factors. For instance, the $100M hack catalyzed massive internal bearishness for the altcoin. Furthermore, network activity remained a source of worry for the ONE community. However, this trend stretched back to the past quarter, when downside trends ultimately began.
DeFi Kingdoms contributed to ONE’s user growth during the previous quarters. Meanwhile, the second quarter witnessed a sharp drop, with the average number of daily users plunging to 124,000. Moreover, DeFi Kingdoms building a subnet on the Avalanche network aggravated the plunge.
Network usage noted multiple surges during the previous quarter due to expanding user base in DeFi Kingdoms. However, network activity has maintained downtrends since the upgrade.
Average transaction fees soared following Harmony’s Horizon Bridge exploit amidst rapid transaction surges. The intensified activity pushed average transaction fees high 4X the 7-day average over the timeframe under review.
Notably, Harmony recorded a sharp drop in Q2. Moreover, other EVM-compatible protocols followed suit. The top three Layer1 networks – Avalanche, BNB Chain, and Ethereum – collectively dropped 65% of TVL in the second quarter. Nevertheless, DeFi Kingdoms subnet on Avalanche and Horizon hack amplified losses recorded in Harmony.
The Rejected Reimbursement Plan
Harmony recently revealed details of the compensation program concerning the $100M hack. The plan suggests reimbursement of ONE coin in three years. Moreover, more than 65,000 affected users would receive compensation monthly. The community has scrapped this strategy, rejecting the proposal on various grounds.
Stephen Tse, Harmony’s founder, acknowledged the rejection, stating that they will create more proposals and a chance for everyone to participate in the plan. Market participants can expect the struggle to continue, considering limited cash in Harmony’s treasury. The crypto start-up exhibits a bleak near-term future, regardless of the recent broad market recovery.
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