Privacy-focused layer-1 blockchain Secret Network has proposed moving from its long-time home on Cosmos to Ethereum layer-2 Arbitrum, citing escalating security risks driven by artificial intelligence and a dwindling ecosystem. The proposal, announced Tuesday, marks a strategic pivot for the network that has been operating privacy-preserving smart contracts on Cosmos since 2020.
‘The security risk is the part we take most seriously,’ the Secret team stated, referencing the growing danger from AI-assisted vulnerability discovery. ‘Old code is becoming dramatically easier to analyze … With AI, the cost of attacking stale code is falling across the board.’ The team highlighted a recent $4.7 million bridge exploit involving the Axelar-Secret IBC bridge, which exploited an ‘infinite mint’ bug. They argue that the release of advanced AI models such as Anthropic’s Claude Mythos 5 has dramatically increased the ability to discover and exploit code vulnerabilities. According to the team, ‘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.’ This sentiment underscores a broader industry concern: as AI models become more sophisticated, legacy codebases that have not been actively maintained become increasingly vulnerable to automated attacks at a fraction of the previous cost.
The decision to move to Arbitrum is also fueled by ecosystem dynamics. ‘Liquidity has thinned on Cosmos while builders have drifted to other ecosystems,’ the team explained. They described Arbitrum as having ‘deep liquidity, tooling, wallet and exchange support, and thousands of builders composing with one another.’ The total value locked (TVL) on Cosmos stands at around $2 billion, down 88% from its peak during the 2021 bull market. In contrast, Arbitrum is the leading Ethereum layer-2 by TVL at $17.4 billion, according to L2Beat. Secret Network itself currently holds only $1.3 million in TVL on Cosmos, a stark indication of its fading presence. The move is intended to give SCRT a ‘new stable home’ within the more vibrant Ethereum ecosystem.
If the governance vote passes, Secret Network will conduct a one-time snapshot of SCRT balances on September 1, to be used for issuing a new ERC-20 SCRT contract on Arbitrum. The proposal’s outcome remains uncertain, but market reaction has already been negative: SCRT tanked 24% over the past 24 hours to 4.1 cents, down more than 99% from its 2021 peak, according to CoinGecko.
Secret Network is not alone in leaving Cosmos. In February, privacy blockchain NilChain – built with the Cosmos SDK – moved to Ethereum. In June, the Sei Network completed its full Cosmos-to-EVM transition, shutting down its native Cosmos transaction layer entirely to become Ethereum-based. Stablecoin blockchain Noble also announced a move from Cosmos to Ethereum in January. This exodus highlights a broader trend: while Cosmos pioneered interoperability and sovereignty, its ecosystem has struggled to retain projects as Ethereum’s layer-2 landscape offers deeper liquidity, more mature tooling, and a larger developer community. The rise of AI has added urgency, as projects must now reassess code security under new threat models.
The Secret Network team emphasized that the migration is about more than just security. ‘The environment has changed,’ they said. ‘We need to be where the builders are, where the liquidity lives, and where we can integrate with the best tools available.’ The proposal reflects a pragmatic shift from a network built during the 2021 bull run to one that aligns with current market realities. As AI continues to evolve, the ability to maintain secure, actively maintained code becomes a critical factor for any blockchain’s long-term viability. Secret Network hopes that by embedding itself in the Arbitrum ecosystem, it will find renewed relevance and resilience against the growing wave of AI-driven exploits.
Source:Cointelegraph News