Harmony has proposed shutting down its seven-year-old layer-1 blockchain and migrating its ONE token to Ethereum as an ERC-20 asset, marking a major change in the project’s direction as it prepares to develop a new AI-focused video business.
Under the proposal announced Sunday, Harmony would take a final snapshot of the network, issue replacement ONE tokens on Ethereum and coordinate with centralized exchanges to transition their listings to the new version. The proposal is currently non-binding, and Harmony has not yet announced when the final block would be produced.
Users have been asked to withdraw from smart contracts before Sept. 10, while eligible validators can begin shutting down their nodes from the same date. Harmony has allocated $1.372 million to compensate qualifying validators and delegators who stop their nodes on schedule, retain their stakes and continue participating as governors.
The proposed shutdown would end Harmony’s operation as an independent blockchain, which launched its mainnet in 2019. The project cited security risks involving state actors and AI agents as factors behind the decision.
It remains unclear whether the proposal will go through Harmony’s existing validator-based governance process. Under the network’s published rules, proposals can be submitted by elected validators, while voting is conducted by unelected validators according to stake weight. A proposal requires participation representing 51% of total stake and 66.7% support following the applicable introduction and voting periods.
Under the planned migration, Harmony would record ONE held in wallets, staking delegations, validator rewards, smart contracts and centralized exchanges at the final snapshot. Replacement ERC-20 tokens would then be distributed to the corresponding Ethereum addresses.
Users would not need to submit individual claims. Delegated stakes and unclaimed validator rewards would instead be allocated to individual governor vaults. Harmony said the token’s total supply and emission rate would remain unchanged, while the Ethereum contract, snapshot calculations and distribution scripts would be published for auditing.
The migration would not cover every type of on-chain asset or application. Harmony said multisig safes, liquidity pools and other applications cannot be transferred through the proposed process, which is why users have been instructed to exit affected smart contracts before the Sept. 10 deadline.
Validators would receive compensation over four quarters. Harmony said the $1.372 million pool would cover the difference in emission rewards between a validator’s final block and the network’s eventual shutdown for eligible operators.
After retiring the blockchain, Harmony also plans to redirect its efforts toward an AI video “remix economy.” Existing validators could choose to remain governors or participate as operators or affiliates in the new initiative.
The proposed model would allow a limited group of video creators to publish prompts and other assets that users could fork or remix. AI agents would then transform those branches into additional video content, while operators would be responsible for generation, distribution and moderation.
Harmony plans to subsidize GPU hardware during the first year and estimates that operators could generate as much as $1 million in combined revenue during that period, depending on staking and uptime requirements. The project has also proposed a $10 monthly subscription, with promoters receiving an ongoing 30% commission on subscriptions they refer. Advertising revenue could potentially reach tens of millions of dollars if the platform grows to 1 million users.
Future ONE emissions would be directed toward the new initiative, although Harmony said the final arrangements would depend on feedback from governors.
The shutdown proposal follows a major security incident in August involving the unauthorized creation of ONE. Harmony later determined that more than 3 trillion ONE had been created across six transactions because of a flaw in cross-shard receipt verification that allowed valid receipts to be processed multiple times without a corresponding debit elsewhere.
The incident prompted Harmony to consider rolling back blockchain activity to checkpoints recorded at 11:25:37 p.m. UTC on Aug. 11. The proposed rollback would have removed 141,628 consecutive shard 0 blocks containing 109,126 regular transactions and 315 staking transactions. Harmony classified 104,545 of the regular transactions, or 95.8%, as automated activity.
The project also identified one wallet associated with the forged mint that attempted 534 transfers of 5 billion ONE each within 106 seconds. According to Harmony, 477 of those transfers succeeded, moving approximately 2.385 trillion ONE.
The unauthorized tokens were traced to standalone wallets, centralized exchange accounts, decentralized exchange routers and pools, liquidity positions, bridge contracts, wrapped ONE and staking wallets. Harmony said it was working with exchanges, bridges and law enforcement to track the assets.
The latest migration proposal comes less than a month after Harmony considered token migration as one possible recovery measure but said at the time that it would create substantially more disruption than the planned rollback.
Harmony has also experienced earlier security and token-related incidents. In December 2023, the project said a staking logic vulnerability resulted in 146.28 million ONE being minted across 74 delegator addresses before an emergency hard fork was implemented.
The project’s most significant security breach occurred in June 2022, when attackers stole nearly $100 million from its Horizon cross-chain bridge after compromising keys controlling the bridge. Harmony subsequently worked with exchanges, blockchain analytics firms and law enforcement and increased its hacker bounty to $10 million in an effort to recover the funds.
The project initially considered minting additional ONE to compensate users affected by the Horizon breach, including a proposal involving 4.97 billion new tokens. The plan faced strong community opposition over potential dilution. Harmony later abandoned the minting approach and said its revised recovery strategy would not create additional ONE or change the token’s economics through a hard fork, instead relying on treasury resources for recovery and ecosystem development.
