Frax Finance

Authors

Frax Core Team

Summary

This proposal suggests retiring the outstanding Harmony addresses for the canFRAX and canFXS tokens following the security breach of the Harmony’s Horizon Bridge in 2022.

Background and Motivation

Frax Finance previously utilized the Harmony Horizon Bridge to facilitate the transfer of FRAX and FXS tokens to the Harmony network, resulting in the creation of canFRAX and canFXS tokens. Unfortunately, in June 2022, the Harmony Horizon Bridge was compromised in a significant security breach, resulting in the loss of a substantial amount of FRAX and FXS tokens that backed the canFRAX and canFXS tokens circulating on Harmony One Network.

The security breach of the Harmony Horizon Bridge was a severe incident that led to the loss of user funds and undermined trust in the integrity of the Harmony bridge. Frax Finance believes that it is Harmony’s responsibility to reimburse the FRAX and FXS tokens lost in the bridge due to the security breach, rather than burdening Frax Finance with the obligation to reimburse users. While Harmony has created some form of repayment and restitution program for hack victims, it has fallen dramatically short of reimbursing anywhere near the full loss of the Harmony Bridge hack even nearly 2 years after the fact. That is why we believe full responsibility lies on Harmony. Frax Finance is a direct victim of the Harmony Bridge hack just like all affected users.

Proposal Details

Given the circumstances surrounding the security breach of the Harmony Horizon Bridge and the loss of FRAX and FXS tokens backing canFRAX and canFXS, it is proposed to retire the outstanding tokens for canFRAX and canFXS tokens. Users that hold these tokens can and should seek remediation from Harmony rather than Frax Finance. Frax Finance itself is a victim of the situation and not culpable for liability of a breach it did not cause nor deserve. By retiring canFRAX and canFXS tokens and asking holders of these tokens to directly seek restitution from Harmony, the Frax Finance ecosystem will be strengthened and a burden removed from the protocol’s balance sheet that was never its own fault or doing.

canFRAX

Token Address on Harmony: 0xFa7191D292d5633f702B0bd7E3E3BcCC0e633200

Total Supply: 8,139,045.038 canFRAX

canFXS

Token Address on Harmony: 0x0767D8E1b05eFA8d6A301a65b324B6b66A1CC14c

Total Supply: 123,959.834 canFXS

Voting

• For: Retire Harmony canFRAX and canFXS

• Against: Do nothing.