Harmony Blockchain to Sunset Layer 1, Pivot to AI Video on Ethereum

Harmony, a Layer 1 blockchain once positioned as a formidable competitor to Ethereum, has unveiled a groundbreaking proposal to cease its seven-year journey as an independent public chain.

The recent proposal outlines a comprehensive plan to discontinue the Harmony Layer 1 network, which commenced operations in 2019. Central to this strategic pivot is the migration of its native ONE token to Ethereum, with the project’s future development squarely focused on a generative AI-centric “Remix Economy” for video content.

Harmony cited escalating security threats from “nation-state attackers” and “AI agents” as primary drivers for this monumental decision. Following years of persistent attacks and network volatility, the team has concluded it is time for a “full termination of the Harmony network.” It is crucial to note that this remains a non-binding proposal, and final details regarding the last block production time, complete governance procedures, and specific migration aspects may still be subject to adjustments.

The ONE Token’s Ethereum Rebirth

Under the proposed migration mechanism, Harmony plans to conduct a comprehensive snapshot at the network’s final block. This snapshot will capture all ONE balances across various categories, including general wallet holdings, staked delegations, validator rewards, smart contracts, and centralized exchange reserves.

Subsequently, the project will issue new ONE tokens on the Ethereum blockchain and airdrop them to corresponding Ethereum addresses. Harmony assures that, in principle, most ONE holders, delegators, and validators will not need to manually claim their new tokens. The total supply of ONE and its existing issuance rate are projected to remain unchanged, with future newly issued ONE tokens slated for redistribution to support the new AI video business.

However, not all on-chain assets will facilitate a seamless transition. Harmony has issued a specific warning that multi-signature wallets, liquidity pools, and on-chain applications cannot be directly migrated. Users associated with these assets are strongly urged to exit their smart contracts before September 10th. The team has committed to publicly releasing the new ONE token contract, snapshot calculation methodology, and airdrop script for community audit and transparency.

Facilitating a Seamless Transition for Validators

Harmony is also implementing an exit mechanism designed for its existing validators.

According to the proposal, validators will be able to cease node operations as early as September 10th, 7:00 AM Pacific Time (10:00 PM HKT/TST on the same day).

A one-time compensation pool of approximately $1.372 million has been established. This fund will reward validators and delegators who halt their nodes on schedule, sign the relevant agreements, maintain their staked positions, and transition into “governors” for the new project. These compensation payments are anticipated to be disbursed over four quarterly installments.

This initiative suggests that Harmony does not intend to entirely dissolve its original community. Instead, it aims to transform the validators, who were once crucial for maintaining blockchain consensus, into integral governance members, video computation nodes, or promoters within the nascent AI video ecosystem.

Unveiling the “Remix Economy for AI Video”

The ambitious new direction Harmony is embarking upon is dubbed the “Remix Economy for AI Video.”

The core concept revolves around content creators publishing publicly usable prompts, character assets, and video resources. Users will then have the ability to “fork” or create derivative works based on these original assets. AI agents will subsequently generate a vast array of short video content from these diverse story branches.

The project further plans to recruit “operators” responsible for AI video generation, content distribution, and moderation. These operators will be required to stake ONE tokens and will receive rewards based on factors such as their service uptime.

Harmony projects that it will subsidize GPU hardware costs during the first year, aiming to help operators collectively generate up to $1 million in income. Promoters, on the other hand, could earn a 30% recurring commission from the $10 monthly subscription fees paid by users they refer.

The team even estimates that if the platform successfully attracts 1 million users, its advertising business alone could generate tens of millions of dollars in revenue. However, it’s important to clarify that these revenue figures represent Harmony’s proposed business model and targets, not realized earnings.

A History of Security Challenges: The August Exploit as a Turning Point

Harmony’s sudden decision to close its Layer 1 network is deeply intertwined with recent security incidents.

In August of this year, the Harmony network suffered a significant vulnerability. Attackers exploited a flaw in cross-shard receipt validation, enabling previously used valid receipts to be re-processed. This allowed for the unauthorized minting of ONE tokens without corresponding asset deductions.

Initial on-chain data suggested attackers minted approximately 4 billion ONE tokens. However, Harmony’s subsequent reconstruction of the incident revealed that the true number of unauthorized tokens generated across six transactions exceeded an astonishing 3 trillion. Harmony ultimately opted to roll back the network to its state prior to the exploit, a measure that involved discarding approximately 109,126 general transactions and 315 staking transactions.

Security issues are not a new challenge for Harmony. In June 2022, its Horizon cross-chain bridge was attacked, resulting in a loss of approximately $100 million in crypto assets. The U.S. Federal Bureau of Investigation (FBI) later confirmed in 2023 that the attack was orchestrated by the North Korean state-sponsored Lazarus Group and APT38. Therefore, Harmony’s mention of “nation-state attackers” in its recent statement carries a significant and specific historical context, rather than being a mere abstract description of cybersecurity risks.

Market Response and a Fading Star: ONE Plunges 99.8% from All-Time High

Harmony was once a prominent project during the previous bull run for public blockchains.

According to CoinGecko data, ONE achieved an all-time high of approximately $0.379 on October 26, 2021. However, as of September 7th, ONE was trading at roughly $0.000738, representing a staggering decline of approximately 99.8% from its peak.

With a current circulating supply of around 14.87 billion tokens, ONE’s market capitalization has dwindled to just about $11 million. Its 24-hour trading volume stands at approximately $1.41 million, and its ranking on CoinGecko has fallen beyond the 1,100th position.

This prolonged period of low prices underscores the significant contraction of the Harmony ecosystem compared to its peak during the last bull market. Even with the announcement of a potential abandonment of its proprietary Layer 1 and a pivot to AI video, the price of ONE has yet to show any significant positive reaction.

From “Ethereum Killer” to Ethereum Ally: A Strategic Reboot

Harmony launched its mainnet in 2019, initially touting sharding technology, high throughput, and low transaction costs as its main advantages. Its ambition was to become an independent Layer 1 capable of scaling Ethereum applications.

Remarkably, the project continued active mainnet development, including Ethereum compatibility updates, Stream Sync, and efforts to shorten block times, well into the first half of 2026. As recently as March of this year, it released the v2026.0.0 mainnet version, and in April, it was still preparing for a major hard fork.

Yet, within a mere few months, the strategic direction has dramatically shifted from continuous Layer 1 improvements to contemplating a full mainnet shutdown and migrating ONE to Ethereum.

Should this proposal ultimately be implemented, Harmony will join the ranks of other cryptocurrency projects that have abandoned their independent consensus layers in favor of leveraging the robust infrastructure of established public blockchains. Consequently, ONE will transform from a native gas and staking token of a Layer 1 network into an application-specific token on Ethereum.

The more profound question looms: Can the AI video “Remix Economy” successfully generate new, tangible demand for ONE? The current proposal outlines a complete re-purposing of the token’s economics, shifting from a model designed to compensate validators and secure a blockchain to one focused on staking, rewards, and governance for AI video operators. This represents a fundamentally different business model.

Therefore, Harmony’s current transformation is less of a typical product upgrade and more akin to a complete “reboot”: abandoning a seven-year-old Layer 1, retaining the ONE token and its existing community, and then attempting to rebuild the project’s utility and revenue streams by leveraging Ethereum as its underlying infrastructure and making a bold bet on generative AI video.