Harmony's ONE token drops 26% after alleged 4 billion token mint exploit

Harmony's native token, ONE, experienced a significant price drop of approximately 26% during Asian trading hours following an alleged exploit that resulted in the minting of around 4 billion new tokens. This event represents an increase of over a quarter to the token's existing supply.

The Harmony team has confirmed the incident and stated that they are working with cryptocurrency exchanges to freeze the illicitly created funds. They are also preparing a software patch and exploring options for a potential rollback of the blockchain to revert the network to a state before the exploit occurred.

This is not the first security-related incident for Harmony. In December 2023, a bug in its staking system led to the improper minting of approximately 146.3 million ONE tokens. Prior to that, in 2022, the network's Horizon bridge was targeted in a hack that resulted in the theft of about $100 million, an incident later attributed by the FBI to North Korea's Lazarus Group.

The current exploit differs from the 2022 bridge attack as it involves the unauthorized creation of ONE directly on the Harmony blockchain, rather than the theft of assets from a bridge. The specific vulnerability that allowed the attacker to mint the tokens, the exact calculation of the 4 billion figure, and the proposed scope of any rollback remain unclear.