Harmony has proposed retiring its seven-year-old layer-1 blockchain and moving ONE to Ethereum, with validators able to begin shutting down nodes from Sept. 10 as the project prepares a new AI video business.
Summary
- Harmony has proposed retiring its layer 1 and issuing ONE as an ERC 20 token on Ethereum after taking a final network snapshot.
- Users have been asked to exit smart contracts before Sept. 10, while eligible validators can begin shutting down nodes and receive compensation from a $1.372 million pool.
- The proposal comes weeks after an exploit created forged ONE tokens and prompted Harmony to plan a rollback removing more than 109,000 transactions.
- Harmony plans to give validators the option to remain as governors or participate in its new AI video initiative after the blockchain is retired.
Harmony said Sunday that it wants to take a final snapshot of the network, issue ONE as an ERC-20 token on Ethereum and move exchange listings to the new token. The proposal remains non-binding, and the project has not given a date for the final block.
The plan would end Harmony’s run as an independent blockchain after launching its mainnet in 2019. The project cited security threats from state actors and AI agents when announcing the proposed shutdown.
Harmony has not said whether the plan will be put through its existing validator-led governance process. Under the network’s published governance rules, elected validators can submit proposals and unelected validators can vote, with voting power determined by stake. A proposal requires participation representing 51% of total stake weight and 66.7% support after a seven-day introduction period and 14-day voting period.
Harmony proposes moving ONE balances to Ethereum
At the final Harmony block, the project plans to record ONE held in wallets, staking delegations, validator rewards, smart contracts and centralized exchanges before distributing replacement tokens on Ethereum.
Users would not have to file claims for the new tokens. Harmony said ERC-20 ONE would be sent to the same addresses recorded in the final snapshot, while delegated stakes and unclaimed validator rewards would be distributed to individual governor vaults.
The token’s total supply and emission rate would remain unchanged under the proposal. Harmony plans to make the Ethereum token contract, snapshot calculations and airdrop scripts public so they can be audited.
Not every asset or application can make the move. Multisig safes, liquidity pools and onchain applications cannot be transferred through the proposed migration, according to the project, which has asked users to exit smart contracts before Sept. 10.
Exchange-held ONE is included in the planned snapshot, with Harmony proposing to coordinate the migration of centralized exchange listings to the Ethereum version of the token.
Validators face a separate transition process. Node operators can begin shutting down from Sept. 10, while Harmony has set aside $1.372 million for validators and delegators who stop their nodes on time, sign an agreement, retain their stakes and continue as governors.
The compensation would be distributed over four quarters. Harmony said it would cover the difference in emission rewards between a validator’s last block and the network’s final block for eligible operators.
Validators could move into Harmony’s AI video project
Harmony has proposed moving its work toward an AI video “remix economy” once the blockchain is retired, offering existing validators the option of remaining as governors or becoming operators or affiliates in the new project.
Under the model described by the team, a small group of video creators would publish prompts and other assets that fans could fork or remix. AI agents would then be used to turn the resulting branches into more video clips.
Operators would handle video generation, distribution and content moderation, with staking and service uptime tied to rewards. Harmony plans to subsidize GPU hardware during the first year and said operators could generate up to $1 million in combined revenue during that period, subject to the proposed staking and uptime requirements.
The project has floated a $10 monthly subscription for the service, with promoters receiving a continuing 30% commission from subscriptions they refer. Harmony said advertising could generate tens of millions of dollars if the platform reached 1 million users.
Future ONE emissions would be directed toward the new initiative, although the team said the arrangements would remain subject to feedback from governors.
Harmony shutdown proposal follows August ONE exploit
The proposed shutdown follows an August security incident that forced Harmony to consider reversing days of blockchain activity after unauthorized ONE entered circulation.
On Aug. 12, crypto.news previously reported that Harmony was investigating an unauthorized mint after an outside researcher claimed nearly 4 billion ONE had been created and approximately 2.8 billion had reached centralized exchanges. Harmony had not confirmed either figure at that stage and said it was working with exchanges while examining recovery options.
A later reconstruction by the project identified more than 3 trillion ONE created across six transactions. Harmony traced the incident to a flaw in cross-shard receipt verification that allowed valid receipts to be processed more than once, creating ONE without a corresponding debit elsewhere.
By Aug. 17, the project had settled on a much more disruptive response. Harmony proposed rolling back its two shards to checkpoints recorded at 11:25:37 p.m. UTC on Aug. 11, before the forged mint activity.
For shard 0, validators were instructed to retain block 92,730,034 and restart from 92,730,035. Shard 1 would return to block 94,978,278 and resume from the following block, even though the forged mint did not originate on that shard.
The recovery would remove 141,628 consecutive shard 0 blocks containing 109,126 regular transactions and 315 staking transactions. Harmony’s analysis classified 104,545 of the regular transactions, or 95.8%, as automated activity, including nearly 100,000 transactions linked to decentralized exchange automation.
One wallet connected to the forged mint attempted 534 transfers of 5 billion ONE each within 106 seconds. Of those, 477 succeeded, moving 2.385 trillion ONE, according to Harmony’s investigation.
Investigators traced the tokens into standalone wallets, exchange accounts, decentralized exchange routers and pools, liquidity provider positions, bridge contracts, wrapped ONE and staking wallets. Harmony said it was working with exchanges, bridges and law enforcement as it tried to identify where the forged assets had moved.
Token migration was among the recovery options examined during that process, but Harmony said at the time that moving ONE would cause substantially more disruption than the rollback. Less than a month later, migration to Ethereum has become part of the project’s proposed plan to retire the network entirely.
Harmony has faced repeated token and bridge security incidents
The August exploit was not Harmony’s first incident involving unauthorized ONE creation. In December 2023, the project disclosed that a staking logic flaw had resulted in 146.28 million ONE being minted across 74 delegator addresses before an emergency hard fork was deployed.
Harmony’s most prominent security breach came in June 2022, when attackers stole close to $100 million from its Horizon cross-chain bridge after compromising keys used to control the bridge.
The project worked with exchanges, blockchain analytics companies and law enforcement following the attack and raised its hacker bounty to $10 million in an attempt to recover the assets.
Harmony initially considered creating billions of ONE to reimburse users affected by the Horizon attack. A proposal published the following month included an option to mint 4.97 billion ONE for compensation, drawing opposition from community members concerned about dilution.
By September 2022, Harmony had changed course and said its revised recovery plan would not mint additional ONE or alter the token’s economics through a hard fork. The project instead proposed using treasury funds for recovery and ecosystem development.
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