Harmony's ONE token dropped approximately 40% during Asian morning trading hours on Wednesday, August 12, 2026, after an apparent exploit created roughly 4 billion new tokens—an amount equal to more than a quarter of the cryptocurrency's existing supply.

The Harmony team confirmed the attack and instructed the network operators that help run the blockchain to install an emergency software update designed to prevent any further unauthorized minting. The project said it is separately working on a strategy to address the tokens that were already created.

Harmony also paused its token bridge and asked exchanges to freeze funds traced to four wallet addresses linked to the incident:

• one1uap8dx2z0qsjxqthm5flgcxkeepsz3gsrghnfn
• 0xe7427699427821230177dd13f460d6ce43014510
• one17u300a40ll5wphd8kj5hktryhdjq3ml9f4phy4
• 0xf722f7f6afffe8e0dda7b4a97b2c64bb6408efe5

"We are working on a patch and rollback options," Harmony said, adding that it would provide another update when more information becomes available.

The project shared the four addresses via its official X account:

We are asking all exchanges to block and freeze funds that traces back to these 4 wallet addresses: one1uap8dx2z0qsjxqthm5flgcxkeepsz3gsrghnfn 0xe7427699427821230177dd13f460d6ce43014510 one17u300a40ll5wphd8kj5hktryhdjq3ml9f4phy4 0xf722f7f6afffe8e0dda7b4a97b2c64bb6408efe5… — Harmony 💙 (@harmonyprotocol) August 12, 2026

Background on Harmony and Supply Impact

Harmony is a layer 1 blockchain network supporting decentralized finance (DeFi) protocols and marketplaces. Its native token, ONE, is used to pay for transactions and help secure the chain. At its peak, the project was valued at approximately $4 billion in January 2022.

Roughly 15 billion ONE existed before the incident, meaning the creation of an additional 4 billion tokens represents a sudden increase of about 26% against that supply. Such a rapid expansion directly dilutes the proportional holdings of every existing ONE holder, as each token now represents a smaller fraction of the network's total supply.

Rollback Considerations

A potential rollback by Harmony would mean restoring the network to a state prior to the exploit and continuing from that point, effectively removing transactions that occurred afterward from the blockchain's accepted history. Such an approach can prevent an attacker from retaining newly created tokens on the network, but it becomes significantly more difficult once funds have reached exchanges or moved onto other systems. Many in the cryptocurrency industry view rollbacks as antithetical to blockchain's core principle of immutability.

The apparent exploit comes a day after Ravencoin, another smaller blockchain built from Bitcoin's code, faced its own possible rollback after parts of its network accepted invalid blocks. In that case, miners moved to rebuild the chain from before the flaw, putting several days of transactions at risk of reversal. While Ravencoin is entirely separate from Harmony, the two incidents illustrate the inherent trade-off in a rollback: undoing an attack can also undo legitimate transactions made after it. The back-to-back crises at separate small-to-mid-cap networks also underscore a recurring vulnerability: smaller chains typically operate with fewer validator nodes and more limited security resources than larger networks like Bitcoin or Ethereum, making them comparatively more exposed to both technical flaws and targeted attacks.

History of Security Incidents

Harmony has dealt with unauthorized token creation before. In December 2023, a bug in its staking system caused approximately 146.3 million ONE to be created when tokens that should have stopped receiving payouts continued to receive them. Harmony reported at the time that 74 addresses were involved, with one address receiving 51.2 million ONE, and that approximately 16.4 million was subsequently moved to an exchange. The network responded with an emergency software update and blacklisted addresses holding the improperly created tokens.

Harmony was also the target of one of cryptocurrency's largest bridge attacks in 2022, when approximately $100 million was stolen from its Horizon bridge after attackers compromised the private keys controlling it. The FBI later attributed that theft to North Korea's Lazarus Group.

Wednesday's incident appears different in nature because the reported damage involves the creation of ONE on Harmony's own blockchain, rather than assets being stolen from a cross-chain bridge. It also marks the third publicly disclosed security incident at Harmony in roughly four years.

Harmony has not yet explained how the attacker was able to mint the tokens, confirmed its own total for the unauthorized issuance, or detailed how it plans to address the coins already created. How quickly the project can coordinate validators to adopt the emergency patch—and whether exchanges cooperate with the freeze requests—will determine whether the unauthorized tokens can be contained or will circulate more broadly.

Source: CoinDesk