Secret Network cites AI exploit risks in proposed Arbitrum move

Privacy-focused layer-1 blockchain Secret Network is proposing to move from its longtime home on Cosmos to Ethereum layer-2 Arbitrum, citing security risks from artificial intelligence, among other reasons. 

Secret Network has been running privacy-preserving smart contracts on Cosmos since 2020, as the ecosystem had strong momentum back then, but the “environment has changed,” the team said Tuesday.  

“The security risk is the part we take most seriously,” it said. “Old code is becoming dramatically easier to analyze … With AI, the cost of attacking stale code is falling across the board.” 

The recent Axelar-Secret IBC bridge exploit highlighted growing security risk from aging, under-maintained code — a risk the team argues AI-assisted exploitation is making worse. The release of advanced AI models such as Anthropic’s Claude Mythos 5 has dramatically increased the capabilities for discovering and potentially exploiting code vulnerabilities. 

Liquidity has thinned

The Secret team described Arbitrum as having “deep liquidity, tooling, wallet and exchange support, and thousands of builders composing with one another,” and said “liquidity has thinned” on Cosmos while builders have “drifted to other ecosystems.”

“The tooling you’d want to count on is shakier than it used to be, and a number of projects that once anchored Cosmos have migrated,” it added. 

“Attacks that used to take deep manual effort are getting cheaper as models get better at reading contracts, tracing assumptions, and turning a forgotten edge case into a working exploit.”

The proposal, which requires a governance vote, follows a bridge exploit in June that resulted in the loss of $4.7 million in bridged assets but did not affect Secret’s native token, SCRT.

Related: Secret Network bridge exploited for $4.7M with ‘infinite mint’ bug

For SCRT to endure, it needs a new stable home, and the Ethereum ecosystem is that home, the team said. 

The team is planning a one-time snapshot of SCRT balances on Sept. 1, which 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 around $2 billion, down 88% from its peak during the 2021 bull market. Comparatively, Arbitrum is the leading layer-2 network by total value secured, which is $17.4 billion, according to L2Beat. 

Secret Network has just $1.3 million in TVL on Cosmos, according to DefiLlama. 

SCRT holders did not react well to the news, with the token tanking 24% over the past 24 hours to 4.1 cents, down more than 99% from its 2021 peak, according to CoinGecko. 

Secret is not the only network to leave Cosmos. In February, privacy-focused blockchain NilChain, built with the Cosmos SDK, left the ecosystem in a move to Ethereum. 

The Sei Network completed a full Cosmos-to-EVM transition in June, closing down its native Cosmos transaction layer entirely and becoming Ethereum-based. 

Stablecoin blockchain Noble also announced it was moving from the Cosmos ecosystem to Ethereum in January. 

Features: The biggest blockchain upgrades still to come in 2026