Harmony Blockchain to Shut Down After Repeated Exploits, Migrate Token to Ethereum

Harmony, a seven-year-old blockchain network, has proposed shutting down its independent chain entirely after suffering a serious exploit last month. On August 11, attackers found a way to reuse cross-shard transaction receipts to mint tokens without any corresponding debit, resulting in unauthorised issuance that Harmony's own reconstruction later estimated at roughly 3.01 trillion ONE tokens across six forged transactions. Harmony responded by rolling back the chain on August 21, discarding over 109,000 regular transactions and 315 staking transactions.

This is the second major security incident for Harmony in recent years, following a 2022 attack on its Horizon bridge that drained nearly $100 million and was later attributed by the FBI to North Korea's Lazarus Group. Citing the risk posed by "state actors and AI agents," Harmony now wants to retire the network altogether, taking a final snapshot and airdropping equivalent ONE tokens to the same wallet addresses on Ethereum. Delegated stakes and unclaimed rewards would move to individual vaults, though smart contracts, liquidity pools and multisig safes will not migrate automatically.

Users have been urged to exit smart contracts before September 10, with validators expected to begin shutting down that day. A proposed $1.37 million compensation pool would pay governors and delegators over four quarters, subject to conditions.

Key Takeaway: Businesses holding or building on smaller blockchain networks should closely track project governance announcements, as repeated exploits can lead to sudden migrations or shutdowns that require prompt action to protect funds.