Why is Jewel's Price Rising? Thank the Harmony Hack

Stablecoins on the Harmony Network de-pegged on Friday in the wake of the project’s $100 million hack, resulting in an overnight loss of hundreds of millions of dollars for the network’s users.

As of early afternoon, they were trading at roughly 30 cents on the dollar. In layman’s terms, that means users who held stablecoins — which typically represent $1 — on the network experienced a loss of 70 percent over the first half of the day. Preliminary estimates place the number of stablecoins on the network in the range of 300 to 400 million, though GoblinCrypto could not independently verify the figure. That range would indicate losses of $210 to $280 million in the first half of the day.

Examples of stablecoins on the network include Tether (USDT), USD Coin (USDC), and DAI.

The de-pegging caused the price of tokens on the network — which is used largely by gaming projects — to run haywire. DeFi Kingdom’s JEWEL took was trading at .70 USDC — up from .20 a day earlier — while Cosmic Universe’s MAGIC was trading at .17, up from .03. Those figures represented a nominal increase on trading charts, despite the tokens’ declining value against the U.S. dollar. The mismatch led to confusion among users who believed the tokens were rising in value, prompting a warning in DeFi Kingdom’s main chatroom that the turbulence was in fact being caused by an “exodus” from the network:

HARMONY: Jewel / 1USDC is trading at ~0.7 and climbing.

DFK Network: Jewel / USDC is trading at ~0.16 and dropping slowly.

This is NOT AN ARBITRAGE OPPORTUNITY This is because there is a massive exodus from Harmony network. 1USDC on Harmony has completely depegged and is trading at ~$0.30, all wrapped assets on Harmony have lost and are losing value. Jewel is pumping on harmony because it’s one of the most viable and liquid ways out of harmony network right now.

The real price of Jewel is at ~$0.16. Right now, the way things look, every minute you hold any asset on Harmony, you are losing value.

The chaos comes just days after one developer on the Harmony Network warned that it was at risk of becoming insolvent within the next year. The protocol’s developers announced late Thursday evening that its Horizon bridge had been hacked, resulting in the theft of $100 million. They said the FBI was assisting with an investigation into the matter.

The Harmony Network was valued at a market capitalization of $4 billion at its height five months ago. As of Friday, the figure sat at about $300 million.