Harmony proposes shutdown of its layer-1 and ONE migration to Ethereum

Harmony, a layer-1 blockchain launched in 2019 as a fast and low-cost Ethereum rival, is now proposing the voluntary shutdown of its mainnet to migrate its ONE token to Ethereum and reinvent itself in AI-powered video editing.

The August 12, 2026 exploit: 4 billion ONE minted in two transactions

On August 12, 2026, Harmony confirmed a major exploit of its core protocol. The attacker exploited a vulnerability in the cross-shard receipt verification mechanism, which is supposed to ensure that any token creation on one shard is matched by an equivalent destruction on another shard. According to on-chain analysis published by investigator Juiceberg, approximately 4 billion ONE tokens were minted in just two « empty block » transactions.

Specifically, 1 billion ONE were first generated, followed by 3 billion more in a second operation. Investigator BlockWatchdog and several independent sources reported that 2.8 billion forged tokens were routed to attacker-controlled addresses. About 97% of these funds were deposited directly onto centralized exchanges for liquidation, severely complicating any recovery effort.

« The threats posed by state actors and AI agents are too great. Since our mainnet launch in 2019, our community has been resilient through attacks and changes, but it is time to fully sunset the Harmony network. »

Harmony team, post on X

The ONE token price collapsed to $0.0005735 that same day, an all-time low. Intraday swings reported across exchanges ranged from 29% to 37%, reflecting the magnitude of the shock on an already weakened token. ONE had peaked at roughly $0.38 in October 2021, meaning the asset had already lost close to 99% of its value before this latest blow. At its peak, the network hosted over one billion dollars in user deposits, including $747 million in the DeFi Kingdoms game alone.

The August 17 rollback: 141,628 blocks erased from history

Five days after the exploit, Harmony proposed a full chain rollback to a checkpoint recorded on August 11, 2026 at 23:25:37 UTC. The operation was split by shard: for shard 0, validators had to resume at block 92,730,034 and restart at the next block; for shard 1, the rollback returned to block 94,978,278.

This rewind removed 141,628 consecutive blocks from shard 0, containing 109,126 ordinary transactions and 315 staking transactions, effectively erasing more than 109,000 operations from history. A wallet tied to the attack attempted 534 transfers of 5 billion ONE each within 106 seconds; 477 of those transfers succeeded, moving the equivalent of 2.385 trillion ONE according to Harmony’s internal investigation. The project stated it is working with exchanges, cross-chain bridges, and law enforcement to trace the funds.

A security track record already heavily compromised

The August 2026 episode is the latest in a long series of incidents. In June 2022, Harmony’s Horizon cross-chain bridge was drained of nearly $100 million, an attack the FBI attributed to the North Korean Lazarus Group and APT38. In December 2023, a flaw in the staking logic led to the unauthorized creation of 146.28 million ONE, corrected by an emergency hard fork. The August 2026 exploit, sitting at the very foundation of the protocol, marks a new peak in severity that the team now uses to justify abandoning the network.

The shutdown proposal and Ethereum migration

A few weeks after the rollback, on September 7, 2026, Harmony published a proposal that caught the community off guard: full shutdown of the layer-1 network, migration of the ONE token to Ethereum, and a strategic pivot toward AI-driven video editing. The proposal is explicitly non-binding and carries a disclaimer stating that all plans may change.

Concretely, Harmony plans to take a snapshot at the height of the last block of the network. This snapshot will cover ONE holdings in wallets, staking delegations, validator rewards, deployed smart contracts, and tokens deposited on centralized exchanges. The new ERC-20 tokens will be automatically sent to the same addresses on Ethereum, with no action required from holders. Total supply and emission rate will remain unchanged; future ONE emissions will be redirected to the new video project. The Ethereum contract, snapshot calculations, and airdrop scripts will be published for audit.

Harmony is asking users to withdraw funds from smart contracts before September 10, 2026. Validators may begin shutting down their nodes from 7:00 AM Pacific Time on the same day. A $1.372 million compensation fund has been set up, equivalent to total staking rewards paid out in the year preceding the August exploit, to compensate validators who shut down their nodes within deadlines, sign an agreement, retain their stake, and participate in the new project’s governance. This indemnity will be distributed over four quarters.

The pivot toward the « Remix Economy for AI Video »

Once the network is shut down, Harmony intends to focus on a video editing platform called « Remix Economy for AI Video. » The business model rests on a $10 monthly subscription: creators publish prompts and source assets that users and AI agents can fork or remix to generate new video clips. Operators — whether running video generation, distribution, or moderation — will receive rewards tied to their stake and the uptime of their services.

Harmony plans to subsidize GPU purchases during the first year and projects cumulative revenues of up to $1 million for operators who meet stake and uptime requirements. Early promoters will earn a permanent 30% commission on monthly subscriptions they refer. The platform could generate tens of millions of dollars in advertising revenue if it reaches one million users, according to the team’s projections.

Market reaction and outstanding discrepancies

On September 7, the day after the shutdown announcement, ONE traded around $0.00073, down nearly 4% over 24 hours. Market capitalization has therefore contracted sharply, and the community remains deeply divided over the decision to end the chain.

Sources do not fully agree on the volume of tokens illicitly generated. Some outlets report approximately 4 billion ONE (~26% of supply), while Harmony’s internal report mentions « more than 3 trillion » ONE created in six transactions. Likewise, the number of transactions wiped by the rollback varies slightly: Harmony cites 109,126 ordinary transactions and 315 staking transactions, while another source mentions « more than 109,000 transactions. » These gaps likely reflect different counting methods and should be clarified when the full technical post-mortem is published.

Conclusion

Harmony’s proposed shutdown represents a rare case of voluntary liquidation of a blockchain by its own developers, driven by a string of security incidents and a radical strategic pivot. If the plan is adopted, ONE holders will receive ERC-20 tokens on Ethereum with no additional steps, while validators can join the new governance or take part in the AI video project. The success of this reorientation will depend on the team’s ability to execute the migration, compensate validators, and convince users of the viability of its subscription and remix video model. In the short term, the key scenarios to watch are the adoption or rejection of the proposal by the community, the release of the technical post-mortem, and the post-migration price trajectory of ONE.

Sources

• CoinDesk – Harmony wants to shut its blockchain
• The Block – Harmony confirms exploit
• Yahoo Finance – Harmony to delete its blockchain
• Crypto.news – Harmony plans to sunset layer-1
• Shattered.io – Harmony ONE exploit 4 billion tokens
• KuCoin News – Harmony to shut down mainnet

This article is published for informational and educational purposes only. It does not constitute investment advice. Do your own research (DYOR) before making any decision.