Harmony (ONE) Investors Need to Know This Before Selling

    Harmony gained a lot of attention before the infamous $100 million hack in Q2, 2022. The protocol has received severe losses along with the whole crypto market. Not stopping that, Harmony also suffered pain in both network and social metrics due to the hack.

    Moreover, although the attack occurred on June 23, the victims have not yet refunded the money. Only recently did they receive a detailed plan from the Harmony team.

    Three painful months 

    Harmony has been struggling continuously since the previous quarter due to the decline. Among all the factors that lead to its drop, the $100 million hack is the most prominent one. 

    Its network activity is also another big concern. But this trend extends back to the previous quarter where the downward trend eventually started.

    In previous quarters, the growth of users was attributed to the arrival of DeFi Kingdoms. In Q2, this metric dropped sharply, with average daily active users falling to just 124,000. The situation was even direr when DeFi Kingdoms introduced the subnet on Avalanche.

    Source: Messari

    Network usage spiked last quarter due to the growing number of DeFi Kingdoms users. However, since the upgrade, network activity has also decreased.

    Average transaction fees trended upwards following the Horizon Bridge attack on Harmony as transactions increased rapidly, up to over four times the seven-day average during the period under review.

    Source: Messari

    Notably, Harmony suffered a severe downturn in Q2, leading to a downward movement of EVM-compatible networks. The top three Layer-1 protocols (Ethereum, BNB Chain, and Avalanche) collectively lost 65% of their TVL in Q2.

    Meanwhile, the losses accumulated in Harmony were aggravated by the Horizon hack and DeFi Kingdom’s subnet launch on Avalanche.

    Source: Messari

    The denied rescue plan

    Recently, Harmony Protocol announced the details of its refund plan following the $100 million hack. Accordingly, the amount lost in more than 65,000 wallets will be refunded monthly via ONE tokens over a period of 3 years. However, this plan was scrapped after the community rejected the proposal for many reasons.

    Harmony founder Stephen Tse accepted the rejection and said:

    “From your suggestions and feedback above, we will create additional proposals and opportunities for everyone to engage in the process.”

    With the limited funds remaining in Harmony treasury, such a back-and-forth situation is expected to persist. Although the market has been slowly recovering, the short-term future for this crypto start-up looks rather bleak.

    (Reference: AMBCrypto)

    Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. 

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