Harmony Proposes Shutting Down Blockchain Over AI Security Threats

Once-hyped Ethereum rival Harmony wants to voluntarily shut down its layer-1 network, citing state actors and AI agents as insurmountable security risks, then pivot ONE token emissions into an AI video business.

Harmony, a blockchain that once raised $18 million and promised fast cross-chain bridges, has proposed shutting down its entire layer-1 network in a dramatic pivot that marks one of the most unusual exits in crypto history. Developers cited the rising threat of state-sponsored actors and AI-powered agents as reasons why maintaining network security has become 'too difficult,' according to a governance proposal published this week.

The proposal calls for Harmony to sunset its independent blockchain and migrate its native ONE token to Ethereum as an ERC-20 asset. Rather than continue operating a standalone network, the team wants to redirect ONE token emissions—currently used to reward validators and secure the chain—into funding an AI video generation business. The move comes just weeks after Harmony announced plans to discard 109,000 transactions following a separate exploit.

Harmony launched in 2019 with backing from prominent venture firms and marketed itself as a faster, more scalable alternative to Ethereum. Its sharding technology was designed to process transactions in parallel, and the project briefly gained traction with decentralized applications and DeFi protocols. However, a $100 million bridge hack in 2022 severely damaged the ecosystem, and many projects migrated away from the platform.

The new proposal argues that advances in artificial intelligence have fundamentally changed the security landscape. AI agents, the developers claim, can now automate sophisticated attacks at scale, while state actors have resources that dwarf what a mid-tier blockchain can deploy for defense. The team believes continuing to operate the network exposes users and developers to unacceptable risk.

If approved by token holders, Harmony would become one of the first major layer-1 blockchains to voluntarily shut down rather than limp along with declining usage. The decision reflects a broader reckoning in the crypto industry: many chains launched during the 2017-2021 bull markets now struggle to justify their existence amid fierce competition from Ethereum layer-2 networks and high-performance alternatives like Solana.

Critics have questioned whether security concerns are the real driver or simply a convenient narrative for a failed project seeking an exit. Harmony's daily active addresses and transaction volume have been in steady decline for over a year. The pivot to AI video generation—a crowded and capital-intensive market—has also raised eyebrows, with some observers calling it an attempt to chase the latest hype cycle.

For ONE token holders, the proposal creates uncertainty. Migrating to Ethereum would make the token easier to trade and integrate with DeFi protocols, but it would also strip away the utility that comes from securing a native blockchain. Token emissions previously went to validators; redirecting them to an AI business fundamentally changes the economic model and value proposition.

The Harmony case may set a precedent for other struggling layer-1 projects. As the crypto market matures, networks that cannot achieve meaningful adoption face a stark choice: continue burning capital to maintain infrastructure with little usage, or acknowledge failure and redirect resources elsewhere. Whether Harmony's AI pivot proves visionary or desperate will become clear in the coming months, but the proposal to shut down a once-prominent blockchain marks a sobering moment for the industry.