The infrastructure of the Harmony blockchain project faced an unprecedented challenge: as a result of an exploit, attackers managed to unauthorizedly generate approximately 4 trillion ONE tokens. In response, the team decided to fully roll back the network to the state preceding the attack, which will affect tens of thousands of transactions and require coordination among all validators.

Technical details of the recovery

The developers chose a single recovery point for both shards to eliminate desynchronization and minimize damage to legitimate assets. Checkpoints are fixed at the following heights:

  • Shard 0 — block #92,730,034;
  • Shard 1 — block #94,978,278.

Both blocks correspond to August 11, 2026, 23:25:37 UTC. After installing new databases, the network will continue operating from blocks #92,730,035 and #94,978,279, respectively. The incident began on August 12, with the first attack recorded in Shard 0 at block #92,730,036.

Why token burning is ineffective

After considering alternative scenarios, the team rejected targeted burning due to the high degree of mixing between fake ONE tokens and legitimate funds. The tokens have already passed through exchanges, DEXs, liquidity pools, and bridges, making the safe destruction of the entire volume impossible without risking other assets. A blacklist of addresses was also rejected: it does not eliminate the issuance and could block unrelated wallets. Selective transaction recovery was deemed too risky, as altering the blockchain state could lead to unpredictable outcomes for swaps, staking, and contracts.

Root of the vulnerability

The root cause was a vulnerability in the cross-shard transaction confirmation mechanism — a bug that allowed already-used receipts to be reprocessed. Additionally, a problem was found in the quorum verification for staking committees: under certain conditions, a zero BLS signature could pass validation. The team is investigating whether this vector was directly used in the attack. According to a preliminary model, more than 99.9% of fake ONE tokens were traced to specific wallets, but this does not provide a way to safely destroy them. The address lists have been shared with exchanges and LayerZero, and cooperation with law enforcement is ongoing.

Scale of the rollback

Analysis of 141,628 consecutive Shard 0 blocks revealed 109,126 regular and 315 staking transactions. Of these, only 22 operations were simple transfers without dependencies, but even they were not deemed safe for recovery. More than 80,000 transactions depended on smart contract states, while the rest were linked to exchanges, bridges, or fund consolidation. After the rollback, balances, pool reserves, and staking states will change, making a selective approach extremely dangerous.

My view: Harmony's decision is a forced but correct step. However, the rollback creates a precedent that undermines trust in blockchain immutability. Investors should consider that similar incidents could recur in networks with complex cross-shard architecture and reassess their risks when holding assets on such platforms.