The Harmony blockchain team is set to revert the network to a state just before a significant exploit, which resulted in the unauthorized issuance of approximately 4 trillion ONE tokens.

https://twitter.com/harmonyprotocol/status/2089280253701324989

According to the developers, a single restoration point was chosen for both shards to eliminate the fraudulent assets created by the attackers while minimizing the risk to legitimate funds.

Harmony to Restore Network to Pre-Attack Status

For the restoration, Harmony has selected the following checkpoint blocks:

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

Both blocks correspond to August 11, 2026, at 23:25:37 UTC. After these heights, validators will receive new databases, allowing the network to resume operation from block #92,730,035 and #94,978,279, respectively.

Previously, Harmony indicated that the incident began on August 12, with the first attack observed in Shard 0 at block #92,730,036. One reconstruction suggests that the total volume of fake tokens issued was around 3.01 trillion ONE through six inter-shard transactions and four attacker wallets. An earlier analysis indicated that the issuance in two empty blocks was about 4 trillion ONE, representing roughly 27% of the total circulating supply.

Challenges of Burning the Stolen ONE Tokens

The Harmony team explored several alternatives to a rollback but ultimately rejected them due to the risk of affecting user funds.

For instance, address burning was deemed too risky since the tokens issued by the attackers had already passed through exchanges, DEXs, liquidity pools, bridges, and numerous wallets. After mixing the ONE tokens with legitimate funds, it became impossible to safely destroy the entire tracked volume without risking the loss of others' assets.

Blacklisting addresses was also not a viable option as it does not eliminate the already created issuance and could potentially block wallets unrelated to the attack.

Selective transaction recovery was another consideration, but altering the blockchain state could lead to different outcomes for the same transaction. This is particularly critical for swaps, staking, contracts, and liquidity reserves.

Thus, Harmony decided to implement a uniform rule for all network participants: all blocks after the chosen checkpoints would be discarded, including legitimate transactions.

Details of the Blockchain Attack

The root cause of the attack was a vulnerability in the inter-shard transaction confirmation mechanism, which allowed the reprocessing of already used receipts.

Additionally, developers found an issue with the quorum verification for staking epoch committees. Under certain conditions, a zero BLS signature could pass quorum checks. The team is currently investigating whether this bug was exploited during the attack.

Most of the Issued Tokens Have Been Traced

A preliminary model successfully traced over 99.9% of the counterfeit ONE tokens to a specific wallet or service boundary. However, the developers emphasized that successful monitoring does not enable the safe destruction of illegitimate tokens for users.

The team has already provided lists of addresses related to the incident to exchanges and LayerZero, and is collaborating with trading platforms, bridges, and law enforcement agencies.

Rollback Will Affect Tens of Thousands of Transactions

One challenge for the team was accurately identifying which transactions could be preserved after the attack commenced.

Harmony analyzed 141,628 consecutive blocks in Shard 0, which included 109,126 regular and 315 staking transactions. Nearly all of these were automated, with DEX operations accounting for 99,863 transactions.

Of these, only 22 transactions were simple transfers of ONE without clear dependencies. However, even these were not considered automatically safe for recovery. More than 80,000 transactions depended on the state of smart contracts or the blockchain, while many others were linked to errors, the incident itself, exchanges, bridges, or fund consolidations.

Following the rollback, balances, pool reserves, approvals, and staking states will change. Therefore, a transaction that failed in the original chain could theoretically succeed in the restored version. The team deemed selective recovery too risky.

Network Remains in Recovery Mode

Harmony has halted Shard 0 at block #92,753,555 to prepare for the rollback. The team has already developed a code change request and a binary file for recovery, but the final implementation depends on the agreement of validators, exchanges, and the fulfillment of technical conditions.

It is worth noting that during the ongoing attack on vulnerable Coldcard hardware wallets, user losses have reached at least 1,700 BTC.