The privacy-focused blockchain plans to abandon its Cosmos chain after a September snapshot, citing aging code vulnerable to AI-powered attacks.
Secret Network wants to pack up and move to Arbitrum, and the reason is more unsettling than a typical chain migration story. SCRT Labs, the team behind the privacy-focused blockchain, has proposed shifting the $SCRT token from its current Cosmos-based Layer 1 to Ethereum’s Arbitrum Layer 2, warning that aging integration code is increasingly vulnerable to exploits, particularly those powered by AI tools.
“The security risk is the part we take most seriously,” the team said, pointing to outdated code and the growing threat of AI-assisted attacks as primary motivators for the move.
A bridge hack and a wake-up call #
The proposal didn’t materialize out of thin air. In June 2026, the Axelar-Secret IBC bridge suffered a breach that drained approximately $4.7 million through an infinite mint vulnerability. SCRT Labs has framed the Axelar incident as symptomatic of a broader problem: legacy integration code that was written for a different era and is now being probed by increasingly sophisticated tools, including AI-powered exploit finders.
The team’s proposed solution is essentially a controlled demolition of the old chain followed by a fresh start on Arbitrum. A snapshot date of September 1, 2026 will determine eligibility for the token conversion. Only native and staked SCRT held in self-custodied wallets at the time of the snapshot will qualify for conversion to the new ERC-20 version of SCRT on Arbitrum.
Why Arbitrum, and what happens to the old chain #
The migration is designed to support Secret Network’s pivot toward confidential AI and verifiable compute applications. Secret Network has historically operated in the Cosmos ecosystem, which offers interoperability through IBC but lacks the deep liquidity pools, developer tooling, and wallet infrastructure that the Ethereum ecosystem provides. Arbitrum, as one of Ethereum’s leading Layer 2 rollups, gives SCRT access to all of that without the gas costs of mainnet Ethereum.
After the snapshot, SCRT Labs plans to cease all formal maintenance of the original Cosmos chain. The team will release the source code under a permissive license, which means third-party validators could theoretically keep the chain alive if enough staking power remains.
The proposal also includes a notable economic change: SCRT’s staking inflation rate would drop from 9% to 5%, reflecting a shift from incentivizing early-stage validator participation toward a more utility-driven token model.
What this means for SCRT holders and the broader market #
The entire proposal hinges on community governance approval. Nothing is final until token holders vote. For current SCRT holders, the September 1 snapshot creates a clear deadline. Anyone holding SCRT through custodial services, wrapped versions, or non-qualifying formats needs to move tokens to self-custodied wallets before that date or risk being excluded from the migration entirely.
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