Harmony’s native ONE token dropped sharply on Wednesday after an apparent exploit allowed an attacker to mint approximately 4 billion new tokens without authorization. The issuance, reported by on-chain analysts, amounted to more than a quarter of the token’s prior circulating supply of roughly 15 billion ONE.

Price trackers showed ONE falling between 26% and 40% in Asian trading hours, with the token briefly reaching new lows near $0.00057 before recovering somewhat to trade around $0.00077. The sudden expansion of supply and rapid movement of tokens onto exchanges fueled heavy selling pressure.

Details of the Incident

On-chain analyst Juiceberg first flagged the minting early Wednesday, stating that the tokens had been created through empty blocks. According to the analysis, around 2.8 billion of the newly issued ONE were quickly routed to exchanges. Later updates indicated that roughly 97% of the minted tokens had already reached exchange deposit wallets or been sold, leaving the attacker with approximately 115 million ONE still available on-chain.

Harmony confirmed the exploit and identified four wallet addresses linked to the activity. The project asked exchanges to block and freeze any funds traced to those addresses. It also paused its token bridge and instructed network operators to install an emergency software update designed to stop further unauthorized minting.

The team released a validator patch shortly afterward, stating that it prevents additional minting. Dealing with the tokens already created, however, will require a separate update. Harmony has not yet publicly confirmed the precise number of tokens minted or detailed the underlying vulnerability.

Rollback Considerations and Network Response

Harmony is evaluating a potential blockchain rollback that would return the network to a state prior to the exploit. Such a move could remove the unauthorized tokens from the accepted history but would also reverse legitimate transactions that occurred afterward. The project has not announced a final decision on this option.

A rollback becomes more difficult once large volumes of tokens have already moved to exchanges or other chains. Industry participants often view chain rollbacks as conflicting with the principle of immutability that underpins blockchain systems.

Prior Security Incidents

This is not the first time Harmony has faced unauthorized token creation or major security breaches. In 2022, attackers compromised its Horizon cross-chain bridge and stole approximately $100 million in assets. The FBI later attributed that incident to North Korea’s Lazarus Group.

In December 2023, a bug in the staking system improperly generated about 146.3 million ONE. Harmony responded then with an emergency software update and blacklisted addresses holding the excess tokens.

Wednesday’s event differs in that the reported damage stems from the creation of new ONE on the Harmony network itself rather than the theft of existing assets from a bridge. The project was once valued at around $4 billion at its peak in early 2022. ONE now carries a market capitalization near $11.5 million.

As of the latest updates, Harmony continues to coordinate with exchanges while preparing further technical measures. The full scale of the minting and the ultimate handling of the newly created tokens remain under review.