Harmony proposes shutting down blockchain, plans ONE token migration to Ethereum

Migration plan details

The proposal outlines taking a final network snapshot and issuing ERC-20 ONE tokens on Ethereum, effectively migrating users’ token balances. Harmony intends to coordinate with exchanges to list the new tokens and ensure a smooth transition for existing holders.

Validators, who maintain the operations and security of the Harmony network, would have several options under the proposal: shut down their nodes, shift into governance roles, or participate in the network’s proposed AI-video initiative.

Harmony said holders will not need to make claims, with all ONE balances, staking rewards, validator earnings, and centralized exchange holdings included in the Ethereum airdrop based on the network’s final block snapshot.

The network cautioned, however, that multisig safes, liquidity pools, and onchain applications cannot be migrated automatically. Harmony recommended users exit all smart contracts before September 10 to avoid asset loss.

A compensation fund of $1.372 million has been allocated for validators who shut down their nodes on time, retain their stakes, and serve as governors during the transition.

Governance and timeline

Harmony described the proposal as non-binding. No specific date was provided for producing the final block or initiating the shutdown. Decisions to proceed rely on the network’s governance procedures, which require participation by 51% of total stake weight and 66.7% support among stakeholders following a formal voting process.

According to Harmony’s governance model, only elected validators can create proposals, but all validators, regardless of status, are eligible to vote, with influence determined by the amount of stake held. A proposal is eligible for passage after a seven-day introduction and a 14-day voting window.

Mini dictionary: ERC-20 tokens are a widely used token standard on the Ethereum blockchain, allowing for interoperable digital assets and compatibility across various decentralized applications and exchanges.

Recent security incident

The proposal follows a security breach less than a month ago in which forged ONE tokens were created, forcing Harmony to consider significant restorative measures. The team revealed that an exploit allowed the unauthorized minting of nearly 4 billion ONE tokens, representing approximately 26% of the coin’s total supply.

Outside parties alleged that about 2.8 billion of the forged tokens may have been sent to exchanges, although Harmony has not publicly verified this figure.

In response to the incident, Harmony announced plans to revert the blockchain to an August 11 checkpoint. This rollback would erase more than 109,000 standard transactions and 315 staking transactions processed after the exploit, shifting the network’s focus from technical repair to formal shutdown.

The team confirmed that investigators had traced nearly all unauthorized tokens to specific wallets or service endpoints. Harmony stated that it is cooperating with exchanges, cross-chain bridges, and law enforcement to address the aftermath.