Harmony Proposes Shutting Down Its Layer 1 Blockchain and Migrating ONE Token to Ethereum

Overview of Harmony’s Proposal

Harmony proposed taking a final network snapshot that records the balances of all ONE tokens, issuing equivalent ERC-20 tokens on Ethereum, and migrating exchange listings accordingly. Validators would be given options to shut down their nodes, remain as governors, or join a new AI-video initiative.

The proposal is non-binding and did not specify the timing of the final block production or confirm whether a validator vote governed the shutdown process.

Harmony’s governance rules state that elected validators may create proposals, while all validators, including unelected ones, can vote. Voting power is proportional to total stake. For approval, at least 51% of total staked weight must participate and 66.7% must support the proposal after a seven-day introduction and 14-day voting period.

Token Migration Mechanics and Validator Incentives

All ONE token balances would be recorded at the final block and corresponding ERC-20 tokens airdropped to the same addresses on Ethereum without requiring claims by holders.

The snapshot covers wallets, staking delegations, validator rewards, smart contracts, and centralized exchange deposits.

However, multisig safes, liquidity pools, and on-chain applications cannot be migrated, so users are urged to exit all smart contracts by September 10.

Validators who shut down nodes on time, retain their stake, and agree to serve as governors will share a $1.372 million compensation pool.

Background: Major Exploit and its Impact

Less than four weeks before this proposal, Harmony suffered an exploit where an attacker minted nearly 4 billion unauthorized ONE tokens — approximately 26% of total supply.

The team is considering rolling back the blockchain to August 11, which would undo over 109,000 regular and staking transactions linked to the incident.

Investigators traced almost all forged tokens to addresses or service boundaries and coordinated with exchanges, bridges, and law enforcement.

This exploit marked a critical turning point, potentially shifting Harmony’s strategy from network recovery to ending operation as an independent blockchain.