Secret Network proposes Arbitrum move after $4.7 million bridge exploit

Secret Network has proposed leaving Cosmos for Ethereum layer-2 Arbitrum, arguing that aging code, AI-assisted exploits and weaker ecosystem support have increased security and operational risks on its current base. The team said security is its top concern, pointing to the recent Axelar-Secret IBC bridge exploit and warning that advanced AI models are making stale code easier and cheaper to attack. The proposal would need a governance vote. If approved, the team plans a one-time snapshot of SCRT balances on Sept. 1 to issue a new ERC-20 version of SCRT on Arbitrum. Eligible balances would include native and staked SCRT, while sSCRT, bridged SCRT, contract-held tokens and IBC assets would not qualify unless users convert or move them beforehand. Secret said Cosmos no longer offers the same momentum it did when the network launched privacy-preserving smart contracts there in 2020. It described Arbitrum as offering deeper liquidity, stronger tooling, wallet and exchange support, and a larger builder base, while saying liquidity on Cosmos has thinned and developers have shifted to other ecosystems. If approved, SCRT Labs plans to stop formally supporting the original Cosmos chain after the snapshot and release its source code under a permissive license, leaving open the possibility that third-party validators could continue operating it. The proposal would also reduce SCRT inflation to 5% from 9% while keeping SCRT as the governance token. CoinGecko data showed SCRT trading near $0.041, down about 25% in 24 hours and more than 99% below its 2021 peak as holders reacted negatively to the plan.