Harmony’s ONE Drops 26% After Apparent Token-Minting Exploit

Harmony’s ONE token dropped about 26% during Asian morning hours Wednesday after an apparent exploit created roughly 4 billion new ONE tokens, according to CoinDesk. Harmony confirmed the incident and said it is working with exchanges to freeze funds while preparing a software fix.

The development matters because the reported token creation represents a sudden supply shock for ONE. Harmony had roughly 15 billion ONE in existence before the incident, meaning the newly created amount was equal to more than a quarter of the prior supply.

Harmony is a layer 1 blockchain used by DeFi protocols and marketplaces. Its native ONE token is used to pay transaction fees and help secure the network, so an incident affecting token issuance directly touches both market confidence and the chain’s operating assumptions.

The team said it is also considering rollback options, which would mean returning the blockchain to an earlier state before the exploit. Such a move can potentially remove attacker-controlled tokens that remain on the network, but it can also affect legitimate transactions that happened after the chosen rollback point.

The incident adds to Harmony’s past security and token-creation problems. CoinDesk noted that Harmony previously faced a 2023 staking bug that improperly created about 146.3 million ONE and a 2022 Horizon bridge attack in which about $100 million was stolen. Harmony has not yet explained the vulnerability behind Wednesday’s incident, how the 4 billion figure was calculated, or how far back any rollback might go.