Harmony's team wants to sunset its Layer-1 network and migrate token holders to Ethereum after a security breach exposed how exposed the six-year-old chain had become.
Harmony's team announced a proposal this week to fully sunset its Layer-1 blockchain and migrate the ONE token to Ethereum on a one-to-one basis through an airdrop, citing what it described as "the threats posed by state actors and AI agents." The proposal would redirect freed token emissions into a new AI-video business model and set aside roughly $1.37 million to compensate validators transitioning into a new governor role. Harmony has not said whether the plan requires a binding validator vote before taking effect. Users have been told to exit DeFi positions on Harmony before September 10.
The proposal follows an August 11 exploit in which an attacker minted a large volume of unauthorized ONE tokens by exploiting a flaw in how the network verifies cross-shard transactions. The exact number of tokens minted in the attack remains unclear, with estimates varying widely. Harmony rolled back more than 109,000 transactions in response, a controversial move for a network built on the premise that its history is immutable.
An update Tuesday showed the exchange-side token shortfall from the exploit narrowing from about 10.234 billion to about 6.581 billion ONE, after matching 295 cross-exchange transfers totaling roughly 3.493 billion tokens. Harmony described the change as a methodology adjustment rather than newly recovered funds. Six exchanges, Binance, Binance.US, Gate, KuCoin, MEXC and OKX, are coordinating to resume normal deposit, withdrawal and trading activity. ONE traded near $0.000717, down modestly on the day and down further from an already steep multi-year decline.
Harmony was once a genuine contender among Ethereum-alternative blockchains, peaking at more than $1 billion in network deposits in early 2022 before a separate hack, the roughly $100 million Horizon Bridge breach later attributed by the FBI to North Korea's Lazarus Group, began a long decline that this month's exploit has now brought to a head.
Security breaches at smaller blockchains are common enough that they rarely move markets on their own. What makes this one different is the response. Rather than continuing to operate through another security failure, as most struggling chains do, Harmony's team chose to wind the network down and migrate its token holders elsewhere. Whether that becomes a template other second-tier blockchains follow once they can no longer credibly defend their own security is the open question this decision now poses for anyone still holding tokens on a chain with Harmony's history.