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Following
SCRT Secret Network plans to migrate SCRT from Cosmos to Arbitrum, citing security risks, lack of liquidity and old code.
Secret said that over time, artificial intelligence has made older versions of bridging code easier to scan, attack and exploit.
Prior to this proposed move to Arbitrum, an Axelar-Secret bridging vulnerability incident related to legacy integration caused approximately $4.7 million in damage.
SCRT holders will face a September 1 snapshot, and balances held by non-native or contract will not be able to participate in the claim.
In its July 7 governance proposal, the privacy-focused blockchain said it plans to create new ERC-20 SCRT tokens on the Arbitrum through a one-time snapshot on September 1. The team stated that native and pledged SCRT balances will be counted, while sSCRT, bridging SCRT, contract-held tokens and IBC assets will not qualify.
The proposal has not yet been adopted. The team said the action requires a community vote and if the holder objects, the relocation will not proceed.
AI vulnerability risks raise security concerns
The team said security is at the core of the proposal. They mentioned the recent Axelar-Secret IBC bridging vulnerability incident, which resulted in the theft of approximately $4.7 million in bridging assets, and Axelar subsequently disabled the Secret Network\'s bridging path.
Secret said the vulnerability did not touch native SCRT, its core privacy protocols or the confidential computing model. But the team pointed out that the incident exposed the risks of old bridging paths and undermaintained code in smaller ecosystems.
\"Security risks are the part we take most seriously,\" the team said. They also warned that \"as artificial intelligence evolves, the cost of attacking stale code is falling across the board\" as models become increasingly good at reading contracts and discovering weaknesses.
Cosmos liquidity pressure exacerbates reasons for migration
Secret Network said Cosmos was the right choice in 2020 because the application chain, IBC, wallet and infrastructure were gaining momentum at that time. Now the team believes that the market has changed, liquidity has decreased, and fewer builders remain in the ecosystem.
In addition, Anoma co-founder Christopher Goes warned in January that Cosmos was facing tremendous pressure, with projects such as Penumbra, Osmosis and Noble reducing work, exploring exits or diverting resources.
Data shows that Secret\'s DeFi TVL is approximately US$1.32 million, while the Cosmos chain\'s total TVL is approximately US$2 billion. By contrast, Arbitrum One, Ethereum\'s largest scale-up network, locks in a total value of about $17.4 billion.
SCRT holders face snapshot rules
If the proposal passes, SCRT Labs plans to end official support for Cosms-based Secret L1 on September 1. Old chains may continue to block out, provided that enough validators continue to run, but this will depend on third-party support.
Theteam also said it would release Secret\'s source code under a loose open source license. After the migration, it is proposed to reduce the inflation rate from 9% to 5%, while retaining SCRT as a governance token.
Users need to transfer certain assets before snapshots. The proposal requires holders to convert eligible balances back to native or pledged SCRT and move IBC assets back to their main chain.
SCRT holders responded negatively to the proposal. Data shows that the trading price of the token is approximately US$0.041, down approximately 25% in 24 hours and more than 99% from the 2021 peak.
