Harmony’s Transition to Ethereum
In a significant shift, Harmony has revealed plans to cease operations of its layer-1 blockchain and transition its native token, ONE, to the Ethereum platform. This announcement comes just a few weeks after a critical exploit prompted the decision to roll back over 109,000 transactions. The proposed move marks a notable turn for Harmony, which launched its mainnet seven years ago.
Migration Strategy
On Sunday, Harmony outlined its strategy to take a final snapshot of the current network, allowing for the issuance of ERC-20 versions of the ONE token on Ethereum, along with the migration of its exchange listings. Validators on the network will have several options available to them: they may choose to shut down their nodes, continue participating as governors, or get involved with a new initiative focused on AI-generated videos.
Governance and Proposal Details
While Harmony has labeled the proposal as non-binding, it remains ambiguous regarding the timeline for the final block’s creation and whether the cessation of the network will go through the validator-led governance process. According to Harmony’s governance framework, those validators elected can propose changes, whereas unelected validators can cast their votes, with voting power directly correlated to their stake. A proposal requires at least 51% participation to be considered, along with a two-thirds majority support rate following a designated voting period.
Token Snapshot and Airdrop
Per the announced proposal, the balances of all ONE tokens will be officially recorded at the network’s conclusion, with corresponding ERC-20 tokens subsequently airdropped to the same wallet addresses on Ethereum. This snapshot will encompass all relevant assets, including wallets, staking delegations, validator rewards, smart contracts, and centralized exchange holdings, and will not require any claims from users.
Important User Actions
However, it is crucial to note that Harmony has clarified that assets held in multisig safes, liquidity pools, and active on-chain applications cannot be transferred in this migration. Users are urged to withdraw their assets from all smart contracts before September 10. From that date, validators may also start their shutdown process, with a pool of $1.372 million allocated to compensate those who adhere to these new terms, retain their stakes, and agree to take part in governance.
Background on Security Incident
Harmony’s decision comes on the heels of a major security incident reported on August 12, where an attacker minted almost 4 billion unauthorized ONE tokens, representing approximately a quarter of the entire token supply. This breach led Harmony to explore the option of rolling back transactions, and while claims indicated that around 2.8 billion of these tokens found their way onto exchanges, Harmony had yet to verify these reports. Following the incident, on August 17, the network announced plans to revert to a checkpoint from August 11, resulting in the elimination of 109,126 regular transactions and 315 staking transactions, as investigators continued to track the ill-gotten tokens and collaborate with exchanges and law enforcement agencies on the matter.
