Secret Network Points to AI-Driven Security Threats in Planned Arbitrum Migration
Following a bridge exploit, Secret Network proposes migrating from Cosmos to Arbitrum, with the decision awaiting community approval.
Secret Network, a layer-1 blockchain focused on privacy, has put forward a proposal to migrate away from Cosmos—where it has operated for years—to Arbitrum, an Ethereum layer-2 solution. The network points to emerging security vulnerabilities posed by artificial intelligence as a key driver behind this potential transition.
Since 2020, Secret Network has operated smart contracts with privacy-preserving features on the Cosmos blockchain, attracted by the ecosystem's strong growth trajectory at that time. However, according to a Tuesday announcement from the project team, the landscape has evolved significantly.
"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 team pointed to the recent exploit of the Axelar-Secret IBC bridge as evidence of escalating security threats stemming from legacy code that lacks proper maintenance. This vulnerability is being amplified by AI-powered attack methods, they contend. The emergence of sophisticated AI systems like Anthropic's Claude Mythos 5 has significantly enhanced the ability to identify and potentially weaponize code weaknesses.
Liquidity has thinned
According to the Secret team's assessment, Arbitrum offers "deep liquidity, tooling, wallet and exchange support, and thousands of builders composing with one another," while in contrast, "liquidity has thinned" within the Cosmos ecosystem as developers 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 migration proposal, which must pass through a governance vote, comes after a June bridge compromise that saw $4.7 million in bridged assets stolen. Notably, the incident did not impact Secret's native SCRT token.
To ensure SCRT's long-term viability, the network requires a more robust foundation, and the team believes the Ethereum ecosystem provides that stability.
A one-time balance snapshot of all SCRT holdings is scheduled for Sept. 1, which will serve as the basis for deploying a new ERC-20 SCRT token contract on the Arbitrum network.
Dwindling DeFi value locked
Currently, the Cosmos ecosystem holds approximately $2 billion in total value locked, representing an 88% decline from its all-time high reached during the 2021 cryptocurrency bull run. In comparison, Arbitrum stands as the dominant layer-2 network measured by total value secured, which totals $17.4 billion, based on data from L2Beat.
According to DefiLlama statistics, Secret Network maintains only $1.3 million in TVL on Cosmos.
The market reaction from SCRT token holders was decidedly negative, with the token plummeting 24% in the 24-hour period following the announcement to 4.1 cents. This represents a decline of over 99% from its 2021 all-time high, per CoinGecko data.
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.