Harmony, the Ethereum-compatible layer-1 blockchain that launched in 2019, has proposed shutting down its own network and migrating the native ONE token to Ethereum as an ERC-20 asset. The plan, published on Sunday, would end seven years of independent chain operations and follows an August exploit that minted roughly 4 billion forged ONE, about 26% of total supply.
Under the proposal, the network would take a final snapshot recording every ONE balance, including wallets, staking delegations, validator rewards, smart contracts and balances held on centralized exchanges. New ERC-20 tokens would then be airdropped to the matching addresses on Ethereum. Users would not need to file claims. Exchange listings would be migrated separately.
What cannot come along
The migration has hard limits. Harmony said multisig safes, liquidity pools and onchain applications cannot be moved, and it urged users to exit all smart contracts before September 10. Validators may begin shutting down their nodes that same day. A compensation pool of $1.372 million has been set aside for validators who stop on time, retain their stakes and agree to continue serving as governors on the migrated token.
Validators have three options under the plan: switch off their nodes, continue as governors, or join the project’s next act. That next act is an AI video remix initiative, where creators share prompts and assets that fans can fork, with AI agents generating new clips from each branch. Former validator emissions will be redirected to fund it. It is an unusual pivot, and one that reads less like a product strategy than a way to keep the community and the treasury occupied after the chain goes dark.
Why the chain is ending
The immediate trigger is security. On August 12, Harmony said it was considering a rollback after reports that an attacker had minted nearly 4 billion unauthorized ONE. An outside account claimed about 2.8 billion of the forged tokens reached exchanges, though Harmony did not confirm the figure at the time. The planned repair would have wiped more than 109,000 legitimate transactions to unwind the damage, a drastic remedy for any network that wants to be taken seriously as financial infrastructure.
The August incident was not the first. The network lost $99.6 million in the Horizon bridge hack of 2022, one of the largest bridge exploits of that year, and the losses were never fully recovered. In a statement cited by Yahoo Finance, the team described the shutdown as a security decision, citing threats from state actors and AI agents, a notable escalation in how a blockchain project frames its threat model. Whether state actors were actually involved is unclear, but the framing signals that the team no longer believes a small validator set can defend the chain against well-resourced attackers.
The proposal is formally non-binding. Harmony did not specify when the final block would be produced or whether the shutdown would go through its validator-led governance process. Under the chain’s published rules, elected validators can create proposals while unelected validators may vote, with voting power based on total stake. Passage requires 51% of stake weight to participate and 66.7% support after a seven-day introduction period and a 14-day vote. A full cycle would run about three weeks from introduction to result.
A rare admission
Sunset proposals of this kind are almost unheard of in the industry. Chains that suffer existential exploits usually fork, roll back, or limp on with degraded trust. The矿山 example most often cited is the 2016 DAO incident, where Ethereum itself rolled back and lived with the philosophical cost. Choosing to end the chain entirely and ask a larger network to host the token is an admission that the security model no longer justifies independent existence. Ethereum’s validator set and economic security are far harder to attack than Harmony’s, which makes the ERC-20 version of ONE a strictly safer place for holders, even if it ends any pretense that Harmony remains a layer-1 platform.
The practical effect on holders is minimal if the snapshot works as described. Balances carry over one to one. The token loses whatever premium came from being a native gas asset and gains Ethereum’s security. What dies is the ecosystem: the validators, the block production, the developer tooling, and any application that cannot be migrated. Holders of ONE in self-custody wallets need to do nothing, but anyone with funds in a multisig, a liquidity pool or a lending market on the chain must withdraw before the cutoff or lose the ability to move those assets.
What it means for the wider market
For the broader industry, the episode is a data point in an ongoing debate about long-tail layer-1 blockchains. As liquidity and developers concentrate on a handful of major networks, smaller chains face a choice between spending heavily on security or conceding the fight. Harmony is the first notable project to choose the second path explicitly. Others watching its migration process will learn whether an orderly sunset is actually executable, because the alternative, as its own exploit history shows, is an disorderly one that leaves users holding worthless assets.
It may not remain an outlier. Several smaller chains launched during the 2021 bull market now trade at a fraction of their peak valuations with declining developer activity, and their security budgets shrink along with their token prices. That dynamic makes attacks cheaper over time, not more expensive, which is the trap Harmony found itself in. The project’s own statement about state actors may be dramatic, but the underlying math is not: a chain whose security budget is falling cannot defend assets whose value may exceed that budget. Migration to a stronger network is one honest answer to that problem. Most projects in the same position have so far chosen to keep pretending otherwise.