Harmony Blockchain Shuts Down After Exploit, Migrates Token to Ethereum

Harmony, an Ethereum-compatible blockchain launched in 2019, has proposed permanently shutting down its network and migrating its native ONE token to Ethereum as an ERC-20 token. The move follows an attack on August 11 in which an unknown actor exploited a vulnerability in the network's cross-shard transaction verification system, minting more than three trillion unauthorized ONE tokens across six transactions, roughly 26% of the total supply. Harmony responded by rolling back the chain to a checkpoint before the attack, erasing over 109,000 regular transactions and 315 staking transactions in the process.

This is not the first major security incident for Harmony. In June 2022, its Horizon bridge was drained of nearly $100 million in an attack the FBI later attributed to North Korea's Lazarus Group. Under the new migration plan, Harmony will take a final snapshot of all ONE balances, including wallets, staking delegations, validator rewards, smart contracts and exchange holdings, and automatically issue equivalent ERC-20 tokens on Ethereum. However, funds held in multisig wallets, liquidity pools and other onchain applications will not transfer automatically, and users have been urged to withdraw funds before September 10.

Validators can begin winding down operations from September 10, with some eligible for compensation from a dedicated fund if they meet governance participation requirements during the transition.