Harmony Proposes Shutdown and Token Migration Amid Exploit

Harmony, an Ethereum-compatible layer-1 network, has proposed shutting down its blockchain and migrating its native token ONE to Ethereum as an ERC-20. The decision comes just over a month after an exploit allowed the minting of nearly 4 billion unauthorized ONE tokens, equivalent to 26% of the supply.

The August attack was not the first serious blow to Harmony, which suffered a $100 million loss in June 2022 when its Horizon bridge was drained by the North Korean group Lazarus Group. To mitigate the damage from the recent exploit, the network took a chain rollback to a checkpoint prior to the attack, eliminating over 109,000 transactions.

Under the proposed scheme, Harmony will take a final snapshot of all ONE balances and distribute new ERC-20 tokens automatically to the same addresses on Ethereum. However, users are warned that multisig safes, liquidity pools, and onchain applications will not be migratable, and should withdraw their funds from smart contracts before September 10.