Is Crypto Losing to AI? The Harmony Proposal

Harmony is considering winding down its Layer 1 network as part of a broader proposal that would move ONE to Ethereum and redirect the project’s focus toward AI-generated video. 

Harmony cited threats from state actors and AI agents as a reason for the transition, sharing on X.com:

“The threats posed by state actors and AI agents are too great. Since our mainnet launch in 2019, our community has been resilient through attacks and changes—but it is time to fully sunset the Harmony network.”

According to Messari, Harmony launched its mainnet in 2019 as an open-source network used to build decentralized applications (dApps). Its architecture used state sharding, dividing network activity across separate segments that could process transactions in parallel. Its native ONE token was used for transaction fees and to secure the network through staking.

Under the new proposal, that infrastructure would be wound down while ONE moves to Ethereum.

ONE will be airdropped on the Ethereum network to current Harmony ONE token holders based on a token snapshot that includes tokens in wallets, delegated staking tokens, validator rewards, smart contracts, exchanges, etc. Despite the  migration, the tokenomics of the ONE token will remain the same, including total supply and emission rate.  

According to Harmony’s announcement on X.com: 

“The ONE token’s total supply and emission rate will remain unchanged. Tokens issued through emissions will now be allocated to our new mission, ‘The Remix Economy for AI Video’, subject to governor feedback.”

Harmony's announcements do not specify what role ONE will play within the new platform.

Validators were able to sunset their nodes beginning on September 10, 2026, with an option to transition to Harmony’s new initiative. Those that shut down their nodes under the proposed program can continue as governors or potentially become operators or affiliates in Harmony’s new initiative. A $1.372 million pool has been proposed for one-time validator compensation, paid in four quarterly installments to qualifying governors and their delegators.

Subject to governor feedback, the proposal would redirect ONE emissions toward the AI-video initiative, shifting incentives previously associated with Harmony’s proof-of-stake network toward its new project. The new initiative, called “The Remix Economy for AI Video,” is intended to create an ecosystem in which creators produce original AI-generated content that users and AI agents can repeatedly fork and remix.

Harmony described the new mission on X.com: 

“Our new mission is to make creativity radically open: a remix economy where 100 creators inspire billions of fans.”

Users will choose which prompts and assets to fork, while AI agents will expand each branch into additional stories and remixes. The project will be built upon Lightricks’ LTX 2.5 generation model. 

During the first year, Harmony will provide funding towards GPU hardware to operators. Affiliates for the new project will earn a recurring 30% commission on each $10 monthly subscription purchased through their referrals. 

Harmony was far from an obscure Layer 1. In January 2022, ONE had a market capitalization of roughly $4.1 billion, according to Harmony’s own ecosystem metrics, which also recorded more than 650,000 active wallets that month. DeFi Kingdoms became one of the network’s most recognizable projects during the 2021 blockchain gaming boom, generating more than $200 million in weekly trading volume by December 2021.

Seven years after its mainnet launch, Harmony is now proposing to wind down the network and transition its infrastructure and resources toward AI video.

The transition raises a broader question: as AI competes with crypto for developers, capital, and computing infrastructure, will other crypto projects follow suit?

For now, the transition remains a proposal. Harmony explicitly describes the plan as non-binding and says its details are subject to change.

Sources:

https://x.com/harmonyprotocol/status/2096604684450775296 

https://x.com/harmonyprotocol/status/2096604013940838667
https://messari.io/report/at-one-with-harmony
https://open.harmony.one/300m-on-bounties-grants-daos/10k-users-10m-assets/network 

https://open.harmony.one/newsletter 

https://dappradar.com/blog/defi-kingdoms-takes-harmony-to-the-top-of-gaming-charts