Harmony Considers Shutting Down Blockchain Over Growing AI Threats

Harmony developers are proposing to voluntarily wind down the seven-year-old blockchain and transfer its ONE token to Ethereum, arguing that defending the network against increasingly sophisticated threats has become too costly and difficult.

The team said state-backed attackers and AI-powered agents now pose security risks that are too significant to ignore. In a post on X on Sunday, Harmony said its community had endured multiple attacks and major changes since the mainnet launched in 2019, but concluded that the network should now be fully retired.

The proposal is not binding, and Harmony emphasized that the plan could still change.

It is also unclear whether the shutdown will proceed through Harmony’s standard governance system. Under that model, elected validators — participants that help maintain the blockchain with their computing resources — submit proposals, while voting influence is determined by the amount of stake held.

From Ethereum Challenger to Struggling Network

Harmony once attracted significant investor and user interest by promising fast and inexpensive transactions. The network was promoted as a potential Ethereum competitor alongside newer blockchains such as Solana.

Its ONE token reached roughly 38 cents in October 2021. By January 2022, Harmony held more than $1 billion in deposits, with DeFi Kingdoms alone accounting for approximately $747 million.

The network’s fortunes changed dramatically during the previous crypto bull market.

In June 2022, Harmony’s Horizon bridge was drained of nearly $100 million. The FBI later linked the attack to North Korea’s Lazarus Group and APT38. The incident severely damaged confidence in both Harmony and ONE, with the token eventually falling as much as 99% from its peak.

Harmony suffered another major security incident on Aug. 11. An attacker exploited a weakness in the way the blockchain validated transactions between its shards, the parallel sections used to divide the network.

The exploit resulted in more than 3 trillion unauthorized ONE being minted across six transactions.

Harmony responded by rolling the blockchain back to a point before the theft. The controversial rollback permanently removed more than 109,000 transactions from the chain’s historical record.

Ethereum Migration and the AI Pivot

Under the proposed shutdown plan, Harmony would take a final record of ONE balances and create equivalent ERC-20 tokens on Ethereum for the same wallet addresses.

The snapshot would cover ONE held in personal wallets, staking accounts, validator rewards and centralized exchanges.

Users would not be required to manually claim the replacement tokens. Harmony plans to release the Ethereum token contract, balance calculations and airdrop scripts for public inspection.

The proposal also includes an unusual change in how future ONE-related rewards would be used.

ONE was originally designed partly to compensate validators for securing the Harmony network. If the blockchain is retired, those future emissions would instead be directed toward a project Harmony calls the “Remix Economy for AI Video.”

The initiative is described as a subscription-based platform where creators can publish prompts and other digital assets that users and AI agents can reuse to produce new video content.

Harmony says validators can begin shutting down their nodes from 7 a.m. Pacific time on Sept. 10.

The project has allocated $1.372 million for the transition, matching the total validator rewards generated during the year before the August exploit. The funds would compensate validators that shut down their nodes on schedule, sign an agreement, maintain their stake and participate in governance of the new venture.

ONE was trading near $0.00073 on Monday, down almost 4% over the previous 24 hours.

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