Harmony Recovery Plan

We know the past few months have not been easy for the community, with all the uncertainty after the Horizon bridge hack. In the meantime, a lot of projects left Harmony, so it’s very understandable that the community wanted an official position from Tranquil and Defira. We are here to answer those questions.

From day one we have been working in the background to ensure that the interests of our community were represented with the Harmony core team. We worked closely on Harmony’s first proposal, and got them to acknowledge and explicitly add funds to cover the bad debt on our lending market. The proposal required significantly inflating the ONE supply, which the community understandably pushed back against.

Once that proposal was withdrawn, we immediately started working with the Recovery One foundation. We worked with them on several aspects of their proposal, from creative DeFi solutions to create utility for the rONE token, to directly reviewing their smart contracts. However, there was yet another pivot, and the Recovery One proposal was also (at least partially) retired. We still believe the Recovery One foundation plans are sound, and we are committed to continue working with them for the benefit of the greater Harmony community.

This brings us to the latest proposal from the Harmony core team to partially reimburse the de-pegged tokens using the treasury funds, without inflating the total supply. In this proposal, the Harmony team will allocate a monthly budget to a few partners to rebuy and burn the de-pegged tokens. The repayments will be executed by these partner projects over a 4 year period.

What does it mean for Tranquil?

We had several discussions with both the Harmony core team and the Recovery One foundation, where we tried to ensure we had the right level of support for Tranquil to stay on Harmony. We finally decided to stay on Harmony, and help rebuild the DeFi ecosystem and become the premier super-app for DeFi on the chain.

We believe there is still a lot of potential for Harmony (both in terms of tech and community), and a successful recovery will greatly benefit the Tranquil community. It’s not going to be an easy journey, as recovering trust is never easy, but we can hopefully get through it together.

Our agreement with the Harmony core team, included the following points:

1. Harmony will support Tranquil as the one stop shop DeFi protocol on the chain: DEX, lending, and liquid staking.
2. Harmony will provide initial liquidity for new bridged tokens (ie. Layer Zero) on the Tranquil DEX.
3. Tranquil will be one of the main de-pegged tokens buyback partners. An initial USD 50k / month budget will be allocated for Tranquil to buy and burn de-pegged tokens.

Our goal is to help the Harmony recovery, while positioning Tranquil as the largest and most significant DeFi player on-chain. That way, we are primed to capitalize when activity picks up again on Harmony.

We will continue working with the Recovery One foundation to coordinate the buy back efforts, and we are still open to provide DeFi utility for rONE, if they still wish to pursue that route.

Our initial focus is on Tranquil DEX and the buy-back strategy. But we will continue working with the Harmony core team to cover our lending protocol’s bad debt. At the same time, we are investigating options to restart the lending market as soon as possible with the new bridge tokens.