Harmony proposes sunsetting its layer-1 blockchain and reissuing ONE token on Ethereum

Harmony has presented the idea of ceasing operations of its layer-1 blockchain and transferring ONE to Ethereum due to the concern that threats posed by state-sponsored hackers and AI agents have become overwhelming for the company to counter alone.

The proposal assigns a cost to what independent chains normally take care of on their own: security. By making ONE an ERC-20 token, Harmony would be doing away with its validator set and relying on the proof-of-stake (PoS) security provided by the Ethereum blockchain. Cryptopolitan previously reported that prior to its August incident, Harmony had been mulling a full token migration before settling on a rollback. The shutdown suggestion now presents the fallback plan as the primary option.

Why the team says it is pulling the plug

In its September 6 announcement, Harmony said, “The threats posed by state actors and AI agents are too great,” adding that it was “time to fully sunset the Harmony network.” The proposal was described as non-binding, per reports.

The AI warning is more than hypothetical. A year-long study by Anthropic on 832 accounts banned for cybercrime activities shows that the proportion of accounts rated medium risk or higher increased from around 33% in the first half of the study to 56% in the second half.

Meanwhile, OpenAI claims that GPT-6 Astra has attained “Critical” cybersecurity capabilities, demonstrating the speed at which frontier AI models can discover and exploit vulnerabilities in computer programs.

The exploits behind the exit

Harmony’s past proves to be important in understanding what the burden means. Initial report on the breach that happened in August indicated that around four billion ONE coins (around 26% of the existing supply) had been created illegally.

However, Verichains claimed that the total amount of ONE had reached nearly three trillion because the same cross-shard receipts were credited multiple times without the respective source-side debits. Eventually, Harmony rolled back the network to the stage it had been before the breach happened.

The company had already been hit hard by a breach in the year 2022. The FBI stated that the roughly $100 million Horizon Bridge theft had been attributed to North Korea’s Lazarus Group, which is also known as APT38.

The overall threat remains substantial: TRM Labs reported that there were 207 hacks of crypto assets in the first half of the year 2026, with the amount of funds stolen being $972 million. Approximately $577 million was due to two episodes that had been linked to North Korea.

What holders and validators need to do

According to Harmony, regular token holders do not need to file any claims. In their plans, Harmony intends to take a snapshot of the balances at the last block and drop the new ONE to the same Ethereum wallets while changing the listings on the exchanges. According to reports, the delegated stake and the rewards that have not been claimed would be transferred to private governor vaults.

A more important concern is the money contained in smart contracts. Users can’t retrieve their money from multisig safes, liquidity pools, and on-chain applications, so they have to exit these contracts before September 10.

Starting from 7 a.m. Pacific time on that day, validators will be able to deactivate the nodes. Harmony has also allocated $1.37 million for validators who will fit into the conditions set by the company and become “governors” in the new AI video business called The Remix Economy.

Part of a wider retreat from layer-1

Harmony is not the first project to quit its stand-alone blockchain. BounceBit discontinued its layer-1 operation in August after the theft of 286.5 million BB and issued the coin anew on the BNB Blockchain.

The effect of Harmony’s proposed migration is less about its size but more about what this decision reflects. CoinGecko puts the market capitalization of ONE at around $10.7 million, while DefiLlama shows about $151,000 of TVL in Harmony DeFi. These numbers show that Harmony is not likely to pose a systemic risk on its own; however, they expose the economics smaller layer-1s are struggling with, which is that paying for validators, infrastructure, and security is becoming more difficult to justify as activity and capital decrease.

Migrating ONE to Ethereum does not mean that Harmony’s applications or chain records will be transferred as well. Nevertheless, it enables token settlement to occur within a much safer network. If this becomes a trend among minor blockchains, it may lead to further accumulation of liquidity and activities on main settlement networks, like Ethereum, along with a diminished number of companies able to afford the costs associated with independence.

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