Harmony & Aave: Renewed Proposal for Joint Recovery Effort

Governance
1

Dear Aave Community,

In June 2022, the Harmony Horizon Bridge suffered a significant exploit, leading to substantial losses and impacting Aave’s V3 deployment on the Harmony network. In 2023, Recovery One facilitated a joint recovery proposal, suggesting that both the Harmony community and Aave contribute 10% each to compensate affected users. While this initial proposal did not materialize, ongoing recovery efforts within the Harmony ecosystem have led to significant progress.

As of February 2025, through the HIP30v2 plan, depegged assets have been systematically burned, resulting in approximately 30% of the compromised assets being removed. Currently, the value of depegged assets stands at approximately $0.20 on the dollar compared to their pre-hack value. Two community-led burn partners, Recovery One Foundation and Modulo, have played a crucial role in facilitating this recovery process.

:link: Recovery One’s Blog: Recovery Updates Round-by-Round
:link: Recovery Tracker: Harmony Recovery Tracker

Renewed Proposal

Building on 28 months of progress, we propose a renewed collaborative effort:

  • Harmony Burn Partners Contribution: 20% towards the recovery fund.
  • Aave Contribution: 20% towards the recovery fund.

This combined 40% fund aims to provide substantial compensation to affected users and accelerate the recovery process for those with locked funds on Aave.

Previous Discussions & Context

For reference, previous discussions and proposals related to this matter can be found here:

Next Steps

If there is renewed interest within the Aave community, we are ready to help facilitate this joint recovery effort.

We invite all community members to share their perspectives, suggestions, and concerns. Your input is invaluable as we work towards a transparent and fair resolution. We look forward to your feedback and hope to collaborate on a successful recovery process.

Sincerely,
Matt Barrett
Lead Program Manager
Recovery One Foundation

3 Likes
[ARFC] rsETH Incident Funding Update
2

Thr Aave DAO typically reserves its captial to grow the platform or cover incidents caused directly by the protocol’s smart contracts.

Since neither apply here, can you explain how the DAO benefits by allocating capital to this initiative?

4 Likes
3

The DAO has spoken over a year ago [TEMP CHECK] AAVE V3 Harmony Recovery ONE Proposal - #27 by MarcZeller.

My POV hasn’t changed.

5 Likes
4

Will Harmony get back to us every year with a money request?

A no stays a no.

2 Likes
5

It’s been more than a year that i looked into this and since then, not a single cent was put forward by harmony/recovery one to resolve the problem.

As long as this is the case at least my perspective does not change.

2 Likes
6

The Harmony Horizon Bridge was hacked, and Aave was slow to respond. Now Harmony users’ funds are locked in the protocol. We aim to develop a solution to assist these affected users.

1 Like
7

The offer has changed, but users are still unable to access their funds. Does this matter?

1 Like
8

R1 represents the Harmony community. We won’t stop fighting for these users, and Aave should not forget about them either. So, let’s create some solutions. Please share; let’s create a positive place for solutions and be open-minded.

2 Likes
9

The previous proposal was declined. The Recovery One Foundation remains committed to supporting the affected users who lack representation. Our offer, like the recovery, has progressed. Let’s keep an open mind toward solving problems, not just hiding them or forgetting about them.

2 Likes
10

The Recovery One Foundation is dedicated to supporting users affected by the Horizon Bridge hack. Through the HIP30v2 framework, affected users on Harmony can swap depegged assets at approximately 20% of their original value, an improvement from the initial 7% post-hack valuation. We believe that Aave’s participation in this recovery process is inevitable, as users currently face challenges accessing their funds.

In 2023, a joint proposal suggested that both the Harmony community and Aave contribute 10% each to compensate affected users. Building upon this, we now propose a renewed collaborative effort.

This message serves as a temperature check to gauge the community’s interest in developing a practical solution. If there is support, we can collaboratively brainstorm and implement an effective recovery strategy.

Below Was Updated on 2/20/2025
Link to new thread after MarcZeller close this discussion:

1 Like
11

I find this proposal to be a net negative for the Aave ecosystem, as it aims to shift the blame and responsibility for Harmony’s self-collapse.

The only mistake made by the Aave DAO was allowing Harmony to claim it would deploy incentives for Aave users. In reality, Harmony mainly supported only ONE deposit and largely self-rewarded itself and frens by becoming large circular LPs, creating zero actual economic activity and exposing Aave users to harm when the bridge was hacked.

The ACI will never vote for any recovery effort. We do not hold the Aave DAO responsible for this situation, except for having built a castle upon unsound foundations.

12

How about taking some part of responsibility regarding the slowness to freeze the borrow/ lend which allows the exploit to happen?
Or leaving 1000% interest shown on the UI for monthes to lend ONE and incitate some users to become exit liquidity of others?
Those are also harmony’s fault?
Stop being ridiculous and act!

1 Like
13

@MarcZeller is that what you call “supporting harmony aave users”?

1 Like