Harmony Protocol Announces Blockchain Shutdown, ONE Token Moving to Ethereum

Key Takeaways

• Harmony Protocol has announced plans to discontinue its Layer 1 blockchain operations, seven years after its 2019 mainnet launch
• ONE token holders will receive their assets on Ethereum through an airdrop without requiring any manual steps
• A compensation fund totaling $1.37 million will be distributed among validators who cease operations by Sept. 10
• The decision comes after a devastating August attack that resulted in the unauthorized creation of over 3 trillion ONE tokens
• The project is transitioning its focus toward an AI-powered video “remix economy” platform

In a significant development for the cryptocurrency ecosystem, Harmony Protocol—an Ethereum-compatible Layer 1 blockchain—has revealed plans to discontinue its network operations and transfer its native ONE token to the Ethereum blockchain. The announcement, made this past Sunday, represents a dramatic transformation for the initiative that first went live with its mainnet in 2019.

According to the team, persistent security vulnerabilities drove this strategic decision. “The threats posed by state actors and AI agents are too great,” the project stated in an official communication on X.

Token Migration Process Explained

The migration strategy involves capturing a final blockchain snapshot at the network’s terminal block. Following this, newly created ERC-20 compatible ONE tokens will be distributed directly to identical wallet addresses on the Ethereum network.

This comprehensive snapshot will encompass individual wallets, staking delegation records, validator compensation, smart contract states, and assets held on centralized trading platforms. Token holders won’t need to perform any manual steps to claim their new tokens.

That said, certain infrastructure cannot be transferred, including multisignature wallets, decentralized exchange liquidity pools, and on-chain decentralized applications. The team has strongly recommended that all participants withdraw from smart contracts prior to the September 10, 2026 deadline.

The overall token circulation and emission schedule will remain unchanged. At the time of the announcement, ONE was valued at $0.00073, reflecting a 3.86% decline in the subsequent 24-hour period.

Security Breach Behind the Strategic Shift

This dramatic announcement arrives less than a month following a catastrophic security incident. A malicious actor discovered a vulnerability in Harmony’s cross-shard receipt validation mechanism, enabling the same valid receipts to be executed multiple times.

Exploiting this weakness, the attacker generated more than 3 trillion unauthorized ONE tokens through six separate transactions. In response, Harmony implemented a network rollback to an August 11 state, effectively reversing more than 109,000 standard transactions and 315 staking-related operations.

This incident wasn’t Harmony’s inaugural major security compromise. Back in June 2022, malicious actors drained approximately $100 million from the project’s Horizon bridge connecting different blockchains. Federal investigators subsequently linked that breach to North Korean cyber groups Lazarus Group and APT38.

Following the August security incident, Harmony indicated it was evaluating token migration among several potential responses. Sunday’s formal proposal validates that this option has become the chosen path forward.

Options for Network Validators

The project has presented validators with three pathways: discontinue node operations, transition into governance roles, or participate in Harmony’s emerging AI video venture.

A dedicated compensation pool worth $1.37 million has been established for validators who terminate their nodes by the September 10 cutoff, preserve their staked positions, and consent to assume governance responsibilities.

The team emphasizes that this proposal carries no binding obligations. According to Harmony’s governance framework, approval necessitates participation from 51% of the total staked weight and 66.7% approval following a 21-day deliberation period.

Looking ahead, Harmony’s strategic pivot centers on developing an AI video “remix economy,” where content creators share open-source prompts while AI systems produce video content from user modifications. The project team projects that advertising revenue could potentially reach tens of millions of dollars with a user base of one million participants.