Privacy-focused blockchain Secret Network is proposing a major migration. The layer-1 network wants to leave its longtime home on Cosmos and move to Ethereum layer-2 Arbitrum. The team cited security risks from artificial intelligence as a key reason for the shift.
Secret Network has been running privacy-preserving smart contracts on Cosmos since 2020. Back then, the ecosystem had strong momentum. But the team said on Tuesday that the “environment has changed.”
AI security risks
The team stressed that security is their top concern. They explained that old code is becoming easier to analyze. With AI tools, the cost of attacking stale code is dropping across the board. They pointed to a recent Axelar-Secret IBC bridge exploit, which highlighted growing risks from aging, under-maintained code. The team argued that AI-assisted exploitation is making this worse. Advanced models like Anthropic’s Claude Mythos 5 have raised the bar for discovering and potentially exploiting code vulnerabilities.
Liquidity has thinned
Secret Network described Arbitrum as having deep liquidity, good tooling, wallet and exchange support, and many active builders. In contrast, they said liquidity on Cosmos has thinned, and builders have drifted to other ecosystems. “The tooling you would want to count on is shakier than it used to be, and a number of projects that once anchored Cosmos have migrated,” they added.
The proposal, which still needs a governance vote, comes after a bridge exploit in June that cost $4.7 million in bridged assets. However, Secret’s native token, SCRT, was not affected. For SCRT to survive long-term, the team believes it needs a new stable home on Ethereum.
The team plans to take a one-time snapshot of SCRT balances on September 1. That snapshot will be used to issue a new ERC-20 SCRT contract on Arbitrum.
Dwindling DeFi value locked
The total value locked in the Cosmos ecosystem is now around $2 billion. That is down 88% from its peak during the 2021 bull market. By comparison, Arbitrum has $17.4 billion in total value secured, making it the leading layer-2 network. Secret Network itself holds just $1.3 million in TVL on Cosmos, according to DefiLlama.
SCRT holders were not thrilled by the news. The token fell 24% in the last 24 hours to 4.1 cents, which is down over 99% from its 2021 peak.
Secret is not alone in leaving Cosmos. In February, privacy-focused blockchain NilChain, built with the Cosmos SDK, moved to Ethereum. The Sei Network completed a full transition from Cosmos to EVM in June, shutting down its native Cosmos layer entirely. Stablecoin blockchain Noble also announced it was leaving Cosmos for Ethereum back in January.
