Following the hack of Harmony’s bridge, Harmony’s inability to repeg the stolen assets, numerous core employees and contributors leaving Harmony, and Harmony seemingly abandoning their own plans to repeg the stolen assets and leaving it up to the community — it’s safe to assume that the future of DeFi on Harmony is looking exceptionally bleak, with little to no hope of ever recovering.
As a consequence of this the future of Euphoria had to be reconsidered.
Numerous options have been considered:
- Simply continuing the project as a redeployed OHM fork on a new chain.
- Scrapping the OHM rebasing model and completely transforming the project and redeploying it on a new chain.
- Completely shutting down the project and redeeming the entire treasury back to the holders.
Redeploying on a new chain
The first set of ideas that were considered were concerning moving to a new chain. Would it be possible for the project to continue? Would it make any sense?
Euphoria has not been an innovative OHM fork. Truth to be told, Euphoria’s only reason for having any traction whatsoever was because of our DEX Viperswap and its reputation on Harmony. And the primary reason for Viperswap’s initial success was because of its early-mover advantage on Harmony.
With this in mind, and the fact that most OHM forks have already failed, shut down their operations/redeemed, and that the whole OHM/reserve currency narrative is almost dead — what could we realistically achieve by migrating to a new chain? Likely not a lot.
What would be the point of moving to Ethereum? We’d be a fork of a fork going up against the project that started it all.
Could we move to Avalanche and compete with Wonderland? Extremely unlikely since Wonderland has a much stronger team, community and a lot more traction.
What about Polygon? There’s already Klima which is the leading OHM fork on that chain.
Could we move to e.g. Near/Aurora? Sure, but what would be the point? It seems all OHM forks have failed or stopped operations there already. It’s highly unlikely a new fork would be successful.
What about random new/small chain x, y, or z? The L1 rotation game has been winding down for quite a while now, and the latest set of bridge hacks have completely ruined certain L1 ecosystems. A lot of these projects are likely also already struggling with funding or will struggle with funding soon.
Complete project transformation and redeployment on a new chain
While a few projects that started out as OHM forks have managed to transition away from the OHM model and have found relative success with their new models, nearly all of them started this process before the real bear market started.
Even if we’d be able to come up with a redesigned model that could potentially work, it’d likely take an insane amount of time and effort to make it successful. We’d also have to consider we’re in a bear market as well as all of the previously mentioned issues regarding moving to a new chain.
Truth to be told, it’s highly unlikely that building a new product/model, moving to a brand new chain and essentially having to create a brand new community on the new chain from scratch (which e.g. failed spectacularly with Cobraswap) — in the middle of a deep bear market — would prove to be a successful move.
The only option that actually makes any sense whatsoever is to shut down the project and redeem the treasury.
As to where and how to redeem — it seems that the best option would be to redeem on Avalanche. A large chunk of the treasury is already there, the fees are low and it’s just an overall excellent chain.
Since ~$8.8m of the treasury is already in native USDC on Avalanche, converting the remaining $10m+ treasury to native USDC would likely make the most sense.
This way the redemption can be carried out entirely in native USDC without any risk of Avalanche’s bridge getting hacked and bridged assets getting depegged (like what happened with Harmony).
The downside is that there could be some slippage costs associated with swapping the remaining $10m+ treasury from USDC on Ethereum to native USDC on Avalanche. Another downside is that users who do not have access to a CEX supporting native Avalanche USDC will also have to swap back to USDC.e (which could result in some swapping/slippage costs) and then bridge back to Ethereum for a $20–30 bridge fee after redeeming. But we still believe that these shortcomings are acceptable if we can fully mitigate exposure to bridges and bridged assets.
The redemption will be carried out using a Merkle distributor contract inspired by Wonderland’s and Spartacus’ redemption contracts. In order to protect the treasury against exploits or unforeseen issues with the smart contract, the treasury will be transferred to the contract in batches in order to top up the contract when needed. That way the redemption process can be carried out more safely and in a more controlled manner.