ARC: Harmony Recovery

Hey @craiglr.eth - what if I would confess: I just want my money back. I don’t see any benefits of me wanting my money back to AAVE stakeholders / voters except one: after I get my money back you won’t have to see me again here.

I would say that my wants, while also self serving, at the same time align with AAVEs goals of growing and progressing, benefiting its users with a powerful financial lending tool. Helping us would prove to your user base that AAVE can be trusted to keep its users money safe even with a decentralized governance system that can be difficult to navigate. Blockchains, web3 and crypto in general will never be foolproof or hackproof, but by helping your users you will be generating provable trust and security.

Even if Harmony fails to recover, which is seems to be on track to do. Hiring new engineers and buying back depreciated assets. Having a lending platform that isnt stuck in state of perpetual limbo would be an asset to AAVE rather than a liability assuming its reimplemented with a proof of reserves model to insure this type of situation cant ever be repeated.

The cost to do this while great to the stuck lenders on Harmony who chose to trust in AAVE, would be negligible to AAVE and its users and holders on other chains.

To be fully transparent I just want my coin back so I can restake/relend and generate better than the current 3 percent apr.

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Hopefully you benevolent folks choose to go that route and not let AAVE Harmony continue to stagnate and corrode and remain the hulking eyesore that proves the fallibility and instability of decentralized lending.

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Maybe that can explain a bit:

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I wonder if it’s even possible to liquidate a negative debt? :thinking: And why are those LINK APY still running? those three wallets with negative debt who bridged out will probably never pay back and if a negative debt can not liquidated :man_shrugging:t3:

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Can the aave community makes a proposal?

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You can easily create one there. As you are also part of the Community/DAO.
No one is blocking you from doing so.

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I am not aave holder so from what i understand it makes me powerless to create any governance vote isnt it?

First step would be to put some numbers on the current situation.

What would be the current state of aave harmony if suddenly, the oracle was changed to reflect real bridged coins price? How much bad debt would there be because of the exploit?

Once we have this info, we can plan something to recover. Do you know who can provide such infos?

First idea i have in mind could be a contribution from both harmony and aave, listing the new bridged coins following the opening of layerzero bridge and redirect a part of the fees to reimburse the rest of the bad debt over time.

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You can still propose something and just gather the communitys voting power if they are in favour.

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Ok.

But first step, as previously explained, would be to get the numbers. Who can provide such infos? There is a core aave team isn’t it?

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Well there is the Aave companies, they probably have some clever people that could figure it out.
But i think they are already several (same) posts regarding harmonry and there could already be the information you are looking for.

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Unfortunately not, someone asked on the previous topic but did not get a reply. It is hard to move forward without this mandatory prerequisite info.

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No one replied to this

Would be really great to find a solution but in the moment it looks like harmony say it’s aave fault, and here the community don’t care except their reputation. I mean if the interested rate would be lowered as it was suggested in here but nothing happened after freezing.

If the oracle of harmony would be used there was even the possibility to liquidate some stuff, especially the LINK. But all we heard before was recovery ONE and team are in communication and now we read

"We’ve tried working with the community representatives at AAVE and with the core team, there doesn’t seem to be a middle ground. It is difficult to work with AAVE due to their decentralized nature and the fact that the community hasn’t made a proposal to negotiate on.

As mentioned above, a large amount of money was lost on the AAVE protocol the day after the hack."

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If 100% of the debt is bad, $1.35M USD

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But I suspect it’s closer to about 1.1M USD with just the totals of just ONE and LINK borrowed. The two assets that were unaffected by the bridge hack, and thus subsequently borrowed against with devalued assets.

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I don’t think 100% of the amount borrowed is bad debt. But for this, we need someone who is able to extract the data…

Would lower that number to around 900k, but LINK is growing daily…
Here the top ten ONE borrower and the top three LINK, this are $885’605 negative debt in the moment

Supplied $ Borrowed $ Negative Debt
1 284,254.54 1USDC 25027 16,270,055.06 ONE 270246 245219
2 246,426.24 1USDC & 0.55 1WBTC 22535 14,631,820.04 ONE 241718 219183
3 234,302.99 1USDC 20629 9,930,054.57 ONE 164144 143515
4 159.28 1ETH 17146 5,592,459.73 ONE 92779 75633
5 Several 23118 2,871,955.64 ONE 47674 24556
6 Several 3555 1,635,483.31 ONE 27149 23594
7 19,744.16 1USDC 1738 1,040,070.08 ONE 17452 15714
8 11,743.67 1USDC 1034 459,730.17 ONE 7737 6703
9 5.11 1ETH 550 289,777.31 ONE 4865 4315
10 2,288.36 1DAI 178 123,417.76 ONE 2071 1893
760325
1 24,900.92 1DAI 1933 9,081.18 LINK 66801 64868
2 17,187.97 1USDC 1513 6,035.90 LINK 44400 42887
3 6,656.95 1USDC 586 2,462.09 LINK 18111 17525
125280
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How about starting by listing the new horizon layer zero bridge coins, collect the fees gradually in order to reimburse this bad debt?
Then we can progress on a potential harmony and/or aave contribution to recover faster. Just a note that if a full or partial bailout is proposed, it would be smart to do it with the current market condition, which would be much cheaper than waiting for the market to recover.
In any case, harmony aave can’t stay in this state for ever. This will start making noise on social media and affect aave reputation especially considering that:

  • safe module is displayed on harmony aave which leads users to think they are covered in case of issues such as this exploit
  • apy was displaying 1014% for at least three weeks after the exploit which lead new users to deposit on aave to be at the end exit liquidities for others without realizing it
  • most of the bad debt was acquired the day after the hack

I truly hope a solution can be found.

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Why there is no ONE token on this list? Or is it included in the “several”?

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Because the most have provided 1assets and borrowed ONE that’s why they have negative debt.

Think you wanna have a list with those who provided ONE?not those who borrowed?

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