Harmony’s Blockchain Faces Shutdown as AI Threats Raise Security Fears

Harmony is preparing to wind down its blockchain and shift ONE to Ethereum, arguing that the network’s security challenges have become increasingly difficult to manage as attackers grow more sophisticated.

Developers said the rising capabilities of state-backed groups and AI agents have made protecting the chain a much tougher task. After operating through multiple attacks and major changes since its mainnet launch in 2019, the project said it is now considering a complete shutdown.

The proposal is voluntary and non-binding, meaning the terms could still be revised. Harmony has not yet explained whether the plan will be submitted to its usual governance process, where elected validators put forward proposals and voting power is linked to staked tokens.

From High-Profile Ethereum Rival to Security Struggles

Harmony once attracted significant attention by offering fast and inexpensive transactions and positioning itself as an alternative to Ethereum. It also competed with newer networks such as Solana for developers and users.

The project enjoyed its strongest period during the 2021 crypto boom. ONE reached roughly $0.38 in October of that year, while deposits on Harmony topped $1 billion by January 2022. DeFi Kingdoms accounted for approximately $747 million of those deposits.

The momentum faded after a major series of security incidents.

In June 2022, Harmony’s Horizon bridge was exploited for nearly $100 million. The FBI later connected the attack to North Korean groups Lazarus Group and APT38.

The breach severely hurt the network’s reputation, sending ONE into a prolonged decline. At one point, the token had fallen roughly 99% from its previous peak.

Harmony faced another serious attack on Aug. 11. The attacker exploited a vulnerability in the way the network validated transfers between its shards, the parallel components into which the blockchain is divided.

More than 3 trillion unauthorized ONE tokens were created in six transactions.

Harmony responded by reverting the blockchain to a state before the exploit occurred. The rollback permanently removed more than 109,000 transactions from the chain’s historical record, a decision that proved controversial.

Ethereum Migration Plan

If the proposal moves forward, Harmony would take a final snapshot of ONE balances and create equivalent ERC-20 tokens on Ethereum for the corresponding wallet addresses.

The snapshot would include tokens held in standard wallets, staking accounts, validator rewards and centralized exchanges.

According to Harmony, holders would not have to manually claim their new tokens. The project plans to make the Ethereum contract, snapshot calculations and airdrop scripts available for public review.

The shutdown would also fundamentally change the role of ONE emissions.

ONE was initially designed in part to compensate validators for securing Harmony. With the blockchain retired, future emissions would instead be directed toward an initiative called the “Remix Economy for AI Video.”

Harmony envisions the project as a subscription platform where creators can upload prompts and other reusable resources. Users and AI agents could then use those materials to produce new video clips.

Validators will be able to start shutting down their nodes at 7 a.m. Pacific time on Sept. 10.

Harmony has reserved $1.372 million to compensate validators taking part in the transition. The amount matches the total validator rewards generated during the year leading up to the August exploit.

Validators would need to shut down their nodes on schedule, sign an agreement, retain their stake and participate in governance of the new AI-focused venture to qualify for the compensation.

ONE was trading at approximately $0.00073 on Monday, down nearly 4% over the previous 24 hours.