Harmony Proposes Shutting Down Layer 1 Network Amid Exploit Fallout

Harmony's proposal to shut down its layer-1 network and migrate the ONE token to Ethereum has sparked controversy in the crypto space. The move comes after a recent exploit led to forged tokens being minted, prompting Harmony to consider a rollback that would have wiped over 109,000 transactions.

The proposed migration plan involves recording all ONE balances at the network's final block and airdropping new ERC-20 tokens to the same addresses on Ethereum. However, users are urged to exit smart contracts before September 10th as multisig safes, liquidity pools, and onchain applications cannot be migrated.

Harmony has set aside $1.372 million to compensate validators who shut down their nodes by September 10th and agree to serve as governors. The proposal will require a 66.7% vote from the network's validator-led governance process, which is non-binding and does not specify when the final block would be produced.

Harmony's decision to consider shutting down its network marks a potential shift from repairing the network to ending it as an independent blockchain. The move comes after an exploit created forged ONE tokens, leading Harmony to plan a rollback that would have wiped over 109,000 transactions.