Layer-1 blockchain abandoned over mounting security costs

A seven-year-old layer-1 blockchain is shutting down its independent network to migrate its native asset to Ethereum as an ERC-20 token. In a September 6, 2026 announcement, Harmony developers concluded that operating a standalone chain carries too high a security burden. Relying instead on Ethereum's proof-of-stake infrastructure, the team stated it is "time to fully sunset the Harmony network."

The decision follows a devastating exploit on August 12, 2026, involving a cross-shard receipt verification flaw. Security firm Verichains reported that attackers illegally forged nearly 3 trillion ONE tokens, while another report identified approximately 3.01 trillion ONE forged across just six transactions. This severely eclipsed early estimates of 4 billion forged tokens, which alone represented about 26% of the asset's existing supply. To stop the ongoing breach, the network was rolled back by more than 141,000 blocks, a drastic measure that erased over 109,000 legitimate transactions.

A History of Vulnerability

This is not the project's first catastrophic breach. In June 2022, the network's Horizon Bridge was compromised for nearly $100 million. The FBI later attributed that attack to the North Korea-linked Lazarus Group, also known as APT38. Following these consecutive security failures, the ecosystem's decentralized finance total value locked plummeted from a peak of over $1 billion to roughly $151,000, according to DefiLlama. By the time the shutdown was announced, CoinGecko recorded the ONE token’s total market capitalization at just around $10.7 million.

In their notice, developers claimed, "The threats posed by state actors and AI agents are too great" to continue operating independently. To highlight the evolving dangers, the team referenced an Anthropic study of 832 accounts banned for cybercrime, revealing that profiles rated medium risk or higher jumped from about 33% to 56% over a year. They also noted that OpenAI rated the cybersecurity capabilities of its GPT-6 Astra model as "Critical." Further contextualizing the environment, TRM Labs reported 207 crypto asset hacks in the first half of 2026 resulting in $972 million stolen, with roughly $577 million tied to North Korea.

Migration and the AI Pivot

With the transition to Ethereum, users face a tight deadline. Because assets locked in onchain applications, liquidity pools, and multisig safes will not migrate automatically, individuals must manually withdraw their funds before September 10, 2026. While the token shift has fueled expectations of fresh demand for Ethereum, FinanceFeeds noted that the actual influx is expected to be limited due to the manual nature of the decentralized application and bridge migrations.

The transition marks a complete shift in the project's business model toward an AI video enterprise called "The Remix Economy." To facilitate the network's closure, a $1.37 million compensation pool has been established for validators. Those who halt their nodes on schedule will receive compensation and transition into governor roles for the new AI venture. The team pointed out that they are not alone in making this pivot, noting that BounceBit similarly abandoned its independent layer-1 operation in August 2026 after suffering the theft of 286.5 million BB tokens.