Privacy-focused Layer 1 blockchain Secret Network is proposing to move from its longtime home in Space to Layer 2 Ethereum Arbitrum, citing, among other things, security threats from artificial intelligence.
The Secret Network team has been supporting privacy-preserving astute contracts in Cosmos since 2020 because the ecosystem was very active back then, but “the environment has changed,” the team said he said Tuesday.
“The security risk is the part we take most seriously,” it said. “Analysing old code becomes much easier… With AI, the cost of attacks on outdated code drops significantly.”
The recent Axelar-Secret IBC bridge exploit highlighted the growing security risk of aging, under-maintained code – a risk that the team believes increases with AI-assisted exploitation. The release of advanced AI models such as Anthropic’s Claude Mythos 5 has dramatically increased the ability to discover and potentially exploit code vulnerabilities.
Liquidity decreased
The Secret team described Arbitrum as having “deep liquidity, tools, wallet and exchange support, and thousands of builders working together,” and said that “liquidity has declined” in Space while builders have “moved to other ecosystems.”
“The tools you want to rely on are more insecure than they used to be, and many of the projects that once anchored Cosmos have been moved,” he added.
“Attacks that previously required a lot of manual effort are becoming cheaper as models get better at reading contracts, tracking 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 connected assets but had no impact on Secret’s native token, SCRT.
Related: Secret Network bridge redeemed for $4.7 million due to ‘infinite mint’ bug.
The team concluded that for SCRT to survive, it needs a up-to-date, stable home, and the Ethereum ecosystem is that home.
The team plans to take a one-time snapshot of SCRT balances on September 1, which will be used to issue a up-to-date ERC-20 SCRT contract on the Arbitrum platform.
Withering value of DeFi blocked
Total value locked in the Cosmos ecosystem is approximately $2 billion, down 88% from its bull market peak in 2021. For comparison, Arbitrum is the leading Layer 2 network in total value locked at $17.4 billion, according to L2Beat.
Secret Network has just $1.3 million in TVL at Cosmos, According to to DefiLlam.
SCRT holders did not react well to the news as the token dropped 24% in the last 24 hours to 4.1 cents, down more than 99% from its 2021 high, according to CoinGecko.
Secret isn’t the only network to leave Space. In February, the privacy-focused blockchain NilChain, built using the Cosmos SDK, left the ecosystem and moved to Ethereum.
The Sei Network completed its full transition from Cosmos to EVM in June, completely shutting down the native Cosmos transaction layer and switching to Ethereum technology.
Blockchain Stablecoin Noble as well announced in January it was moving from the Cosmos ecosystem to Ethereum.
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