Harmony moves to sunset its layer-1 blockchain
Harmony has proposed shutting down its layer-1 blockchain and migrating its native ONE token to Ethereum, a move that would end the network as an independent chain seven years after its mainnet launch. The proposal outlines a final network snapshot, the issuance of ERC-20 ONE tokens on Ethereum, and the migration of exchange listings. Validators would be given options to stop their nodes, continue as governors, or join a new AI-video initiative.
The proposal is described as non-binding. It does not specify when the final block would be produced or whether the shutdown would be submitted to the network's validator-led governance process. Under Harmony's published governance rules, elected validators can create proposals, while unelected validators may vote. Voting power is based on total stake. Passage requires 51% of total stake weight to participate and 66.7% support after a seven-day introduction period and a 14-day vote.
What the migration would involve
Under the plan, all ONE balances would be recorded at the network's final block, and new ERC-20 tokens would be airdropped to the same addresses on Ethereum. The snapshot would cover wallets, staking delegations, validator rewards, smart contracts, and centralized exchanges. No claims would be required from holders.
However, not every asset or application can make the transition. Harmony said multisig safes, liquidity pools, and onchain applications cannot be migrated. Users are urged to exit all smart contracts before Sept. 10. Validators may begin shutting down that day. A $1.372 million pool has been set aside to compensate validators that stop on time, retain their stakes, and agree to serve as governors.
Security incident accelerated the proposal
The proposal comes less than four weeks after an exploit created forged ONE tokens. The incident led Harmony to plan a rollback that would wipe more than 109,000 transactions, marking a potential shift from repairing the network to ending it as an independent blockchain.
On Aug. 12, Harmony said it was considering a rollback after reports that an attacker had minted nearly 4 billion unauthorized ONE, equivalent to about 26% of the supply. An outside account claimed about 2.8 billion tokens reached exchanges, but Harmony had not confirmed the figures at the time.
On Aug. 17, Harmony said it planned to revert the blockchain to an Aug. 11 checkpoint, discarding 109,126 regular transactions and 315 staking transactions. It said investigators had traced nearly all the forged tokens to wallets or service boundaries and were working with exchanges, bridges, and law enforcement.
Background: Harmony's original vision
Harmony launched its mainnet in 2019 with a focus on scalability, low fees, and cross-chain interoperability. The network used sharding and an effective proof-of-stake consensus model designed to process transactions quickly while keeping validators decentralized. Its ONE token powered gas fees, staking, and governance. Over time, Harmony built bridges to Ethereum, Binance Chain, and other networks, aiming to connect liquidity across ecosystems.
That cross-chain strategy also introduced risk. In June 2022, the Horizon bridge was exploited for roughly $100 million in digital assets. The breach forced the project to confront the difficulty of securing bridges, which hold pooled assets and often rely on multisignature or validator sets. Harmony later pursued recovery efforts, including proposals to mint tokens and compensate affected users, but the event remained a defining moment for the network's reputation and treasury.
The 2026 exploit described in the current proposal differs in method, but it raises similar questions about validator security, bridge design, and the limits of rollbacks. A rollback can restore a ledger to a prior state, but it also discards legitimate transactions and can undermine confidence in finality. For a chain already struggling with liquidity and adoption, the trade-off may have made a full migration to Ethereum more attractive than another repair cycle.
Why migrate ONE to Ethereum?
Migrating ONE to Ethereum would convert the asset into an ERC-20 token, making it compatible with the largest smart-contract ecosystem. Holders would receive tokens on Ethereum at the same addresses that held ONE at the final snapshot. Exchange listings would be migrated, and staking delegations, validator rewards, and smart contract balances would be captured in the snapshot. For users, the change could simplify custody and trading if exchanges support the new token. For developers, it would mean abandoning Harmony-native applications or rebuilding them on Ethereum, where gas costs and congestion are different.
The proposal leaves several details unresolved. It does not state whether the final block will be produced after a governance vote, nor does it explain how the snapshot will handle assets on bridges or in complex DeFi positions. Multisig safes, liquidity pools, and onchain applications are explicitly excluded, which means users with funds in those contracts must act before the deadline. The Sept. 10 cutoff gives a narrow window to exit smart contracts, and any assets left in non-migratable contracts could be lost or require separate recovery efforts.
Validator incentives and governance questions
Validators are central to the outcome. Under the proposal, they can stop their nodes, continue as governors, or join an AI-video initiative. A compensation pool of $1.372 million is intended for validators who shut down on time, retain their stakes, and agree to serve as governors. That structure suggests the project wants to keep a group of experienced operators involved even after the layer-1 chain stops producing blocks.
Governance remains uncertain. The proposal is non-binding, and it is unclear whether the shutdown will be submitted to validator-led governance. Harmony's published rules require 51% of total stake weight to participate and 66.7% support after a seven-day introduction and 14-day vote. If the proposal does not go through that process, the migration could face legal, technical, or community challenges. If it does, validators will decide whether to end the chain they have secured.
Implications for holders, exchanges, and DeFi
For ONE holders, the immediate question is how the snapshot and airdrop will work. Because no claims are required, tokens should appear on Ethereum at the same addresses if exchanges and wallets support the migration. But centralized exchanges may need time to credit ERC-20 ONE, and users on unsupported platforms could face delays. Staking delegations and validator rewards would be recorded, but post-migration staking on Ethereum would depend on new contracts or governance arrangements.
For exchanges, the migration requires updating listings, tickers, and custody systems. Trading pairs may be suspended around the final snapshot, and deposits or withdrawals could be paused. For DeFi users, the inability to migrate liquidity pools, multisig safes, and onchain applications is a major constraint. Automated market maker positions, lending markets, and yield strategies cannot simply be copied to Ethereum. Users must withdraw funds and bridge or transfer them separately, which may trigger tax events, fees, and slippage.
The proposal also has symbolic weight. A layer-1 blockchain shutting down and migrating its token to Ethereum reverses the usual narrative of independent chains competing with Ethereum. It acknowledges that security, liquidity, and developer activity are concentrated on the largest network. For smaller chains, the choice may increasingly be to differentiate through applications, modular architecture, or interoperability rather than trying to sustain a standalone base layer.
Technical and operational hurdles
Moving a live blockchain to Ethereum is not a simple token swap. The snapshot must capture the exact state of the ledger, including balances, staking positions, and contract storage. Any mismatch could leave users with incorrect token amounts. The airdrop must then distribute ERC-20 tokens on Ethereum, which requires gas, coordination, and security audits. Exchanges must decide whether to support the airdrop automatically or require users to move tokens to self-custody.
Validators face a different set of decisions. Shutting down nodes means ending block production and consensus participation. Continuing as governors implies a new role outside the original consensus protocol. Joining an AI-video initiative would shift resources to a different product area. The $1.372 million pool is small relative to the operational costs of running validators, but it may be enough to coordinate a graceful shutdown. Retaining stakes could preserve influence in the new governance structure, though the scope of that structure is not fully defined.
What happens next
Harmony has not specified when the final block would be produced. Users are urged to exit all smart contracts before Sept. 10. Validators may begin shutting down that day, and the $1.372 million pool is available for those that stop on time, retain their stakes, and serve as governors. The snapshot would cover wallets, staking delegations, validator rewards, smart contracts, and centralized exchanges, with ERC-20 ONE airdropped to the same addresses on Ethereum. Multisig safes, liquidity pools, and onchain applications cannot be migrated. The proposal remains non-binding, and the governance path is not yet clear. The next step is whether validators and exchanges move to support the migration before the chain is asked to produce its final block.
Source: Cointelegraph News