Draft Proposal: Community Continuance of Secret Network (L1)
Status: Draft for community feedback — this is not an on-chain proposal Date: July 28, 2026 Author: Lisa Loud
A note before the proposal
This community has been through a lot. The bridge incident, months of uncertainty (or years for many), and now the announcement that Secret Labs is stepping away from the L1. I believe Secret can continue, I believe it is worth continuing, and I’m prepared to lead that work.
What follows is a draft, posted for your feedback before anything is finalized or goes to a vote. Where you see “to be finalized,” the number will be set after this feedback round, with your input. I want to move quickly and keep momentum, so read it now. Tell me what’s wrong, what’s missing, and what you’d change. That’s what this thread is for.
1. Summary
Secret Labs has announced it will stop developing and supporting the Cosmos-based Secret L1. It has also said the software will be released under a permissive license, and that the community may continue the chain if it chooses.
This proposal is a concrete path to do exactly that: continue the Secret L1 under new stewardship, with economics that can actually fund development, infrastructure, and remediation — without migrating away from the existing chain, and without leaving any class of holders behind. That includes holders whose SCRT is locked in contracts, such as staked SCRT via Shade.
Unlike the Labs plan, this proposal includes staked Secret in full, and it makes remediation a committed allocation rather than a future possibility.
In short:
• The chain continues.
• Supply is restructured through a dilution mint so the network can be economically viable (see §3.3).
• A new entity, which I would lead, provides core development and coordination, funded by an allocation and a tax sized so the economics actually work.
• Validators, relayers, builders, and hack victims all receive meaningful allocations, so incentives point the same direction.
• Every existing SCRT holder stays on the same chain. No one is carved out.
2. Background and Motivation
2.1 Labs is stepping away from the L1
Secret Labs has publicly indicated it will not continue operating or developing the Cosmos Secret L1. A permissive license and an open invitation for the community to proceed create both an opportunity and a responsibility: either we find a viable path forward, or the network is left without a development team or coordinated infrastructure.
2.2 Why “just keep going” isn’t enough
Continuing as-is doesn’t work. For the network to be viable under community stewardship, the economics have to work for everyone who keeps it alive: the new entity managing the chain, the infrastructure providers (validators and relayers), the builders shipping applications on Secret, and the users harmed by past security incidents, who deserve a clearer path to recovery than they’ve had.
The environment we’re operating in: not every stakeholder is still active. Secret Labs controls a large share of SCRT, and it has blocked proposals before. I accept those realities. I still believe this is a valid continuance and remediation path for everyone who wants Secret to exist as a living, economically functional network under community stewardship.
2.3 How this differs from the Labs plan
Staked Secret is included. The Labs migration plan excludes SCRT locked in contracts such as the Shade staked-Secret product (as distinct from ordinary validator staking). This proposal does not. The chain continues, and the restructuring applies network-wide, so everyone is included on the same terms.
Remediation is a committed allocation, not a future possibility. The Labs plan defers remediation to a future vote and makes it contingent on “technical feasibility and risk assessment” — with no committed amount. This proposal builds a dedicated remediation allocation into the design from day one. This is not a guarantee that victims are made completely whole — no one can promise that. But a real, committed allocation is a meaningfully better chance of recovery than a contingency.
3. Proposal Overview
3.1 New entity — allocation and tax
A new entity would be established to provide core development, coordination, and long-term stewardship of the continued Secret L1. I would lead it, as I’ve led SNF for the past three and a half years.
The entity would receive an allocation sized so the network’s economics are viable going forward, plus a tax (a protocol- or network-level revenue share, with parameters specified in the final proposal) so ongoing development and operations are funded sustainably. Together, the allocation and tax are meant to make this project rational for a serious core team to pursue, not symbolic.
This structure is designed so that the network’s economics can support ongoing work, incentives align across the core team, validators, relayers, and builders, and community stewardship is real rather than nominal.
The final proposal will lay out in concrete terms what I and the new entity bring: capabilities, relationships, and execution capacity across engineering, infrastructure, ecosystem, and remediation design.
3.2 Chain continuity via mint — not a carve-out migration
The shape of the plan: continue the existing chain, and effect the supply and incentive restructuring through a mint and associated parameters — rather than through a migration that drops categories of holders. All existing participants stay in scope, including holders of staked Secret that the Labs plan would exclude.
3.3 Supply, dilution, and the mint math
Design target: XX% dilution (to be finalized with community input).
Existing SCRT stays in place. New tokens are minted such that the existing supply becomes (100 − XX)% of the post-mint total, and the new mint is XX% of the post-mint total.
Item Amount (SCRT) Share of post-mint supply
Current / existing supply (E) 361,966,533 (100 − XX)%
Post-mint total supply (T) T = E ÷ (1 − XX/100) 100%
Mint (new allocations) (M) M = T − E XX%
Worked example at 80% dilution: E = 361,966,533. Existing holders’ aggregate share after the event = 20%. T = E ÷ 0.20 = 1,809,832,665. M = T − E = 1,447,866,132. Check: M ÷ T = 80%, E ÷ T = 20%.
Every existing SCRT — including staked Secret and other contract-locked positions — keeps the same absolute balance on the continuing chain; its ownership share of total supply is diluted by XX% under this design. Remediation and stakeholder alignment are funded from the mint, not by excluding classes of holders.
3.4 Allocation framework (within the mint)
The full mint is the pool for new allocations. Directionally, for this draft:
• New entity: an allocation sized for network viability, plus the tax to fund ongoing core development and stewardship.
• Validators: a substantial allocation — skin in the game for securing the continued chain.
• Relayers: an allocation recognizing critical IBC and infrastructure roles.
• Builders: an allocation for teams building applications and infrastructure on Secret (privacy DeFi and related apps).
• Remediation (hack victims): a sizeable allocation — included here, deferred and contingent under the Labs plan — to improve outcomes and create runway for a fuller remediation process.
On vesting and liquidity, the principles for this draft: a portion of new allocations should be liquid immediately, so the network isn’t operationally frozen at launch of the new parameters; and a substantial portion of long-term stakeholder allocations (especially validators and relayers) should be subject to on-chain vesting, tying incentives to continued contribution.
The final proposal will specify the bucket weights, the liquid-versus-vested splits, and the schedules (see §7).
3.5 On dilution
A large dilution of existing holders’ share of total supply is a painful feature of this design. It is also what makes the design work — it’s how the network becomes economically viable for a real team and aligned infrastructure, and it’s how remediation gets funded rather than deferred.
Two framing points matter to me. First, the goal is network viability and alignment under community stewardship — not a punitive redesign aimed at any holder. Second, there is no point proceeding without economics that make the project worth pursuing for builders, validators, and a development team.
Dilution at this scale has been discussed in this ecosystem before, in other contexts. Here, the intent is that the benefit of restructuring flows to community continuance, remediation, and the operators who keep the chain alive. I believe this is the most credible path to a sustainable long-term future for Secret. If someone has a better one, this thread is the place to make that case.
4. Governance and Adoption Path
Success is not automatic. At minimum, this path needs:
Multisig / signer support. A critical mass of chain- and upgrade-relevant signers must agree — discussed as on the order of about 7 of roughly 16 signers, with exact thresholds to be confirmed against current governance and upgrade procedures.
Community legitimacy. Visible buy-in: social discussion, validator and builder signaling, and governance voting that shows real support — not just a thin formal majority.
Credible execution. The new entity must state what it can deliver — roadmap, staffing, use of allocation and tax proceeds, remediation process design — so that the eventual vote is about a real plan, not a slogan. That’s on me, and it will be in the final proposal.
Parameter finalization. The mint size follows from the dilution design above. Bucket weights, vesting, immediate liquidity, tax parameters, and remediation eligibility rules will all be in the final proposal (§7).
5. Risks
These are the material risks. Read this section assuming any of them can materialize.
5.1 Concentrated stake and governance capture
Secret Labs, together with affiliated or historically related holdings, may still control a majority or controlling share of voting power — including through positions that are not fully transparent to the broader market. In particular, there is a credible concern that parts of that stake have been moved or layered through transfers involving Secret Secret (sSCRT), obscuring the full picture of concentrated ownership.
The consequence: even a well-designed community proposal can be delayed, diluted in process, or defeated by concentrated voting power — behavior we have already seen on prior proposals. Passing upgrades or parameter changes may be difficult or impossible without either genuine alignment from large holders, or social and operator-level coordination that goes beyond a simple token vote.
Mitigation is partial, not guaranteed: transparent communication, signer and operator coordination, public signaling, and structuring the proposal so that continuing the chain stays attractive to validators and builders even under political friction — while staying realistic that concentrated stake can still block on-chain success.
5.2 The community may reject the necessary economics
The economics this plan requires — a real allocation and tax for the new entity, allocations to validators, relayers, and builders, and meaningful dilution of existing supply — may be unacceptable to a large part of the community, even among people who want Secret to survive in the abstract.
If that happens, the consequence is simple: I don’t currently see a softer alternative that both keeps the L1 alive with a real team and avoids hard tradeoffs on supply and control. If this thread surfaces one, I want to hear it.
5.3 Failure to convene the full stakeholder set (the existential risk)
This plan only works if enough of the people who actually run and build the network choose to participate: multisig and upgrade signers, validators, relayers, builders and application teams, and a core development team under the new entity.
If that coalition does not form — if signers won’t sign, validators won’t run, builders won’t build, and a development team won’t stay or form — then this proposal fails. In that failure mode there is no credible plan that carries the full set of existing participants into a single viable venture, there may be no remaining development team with the mandate and resources to maintain the L1, and the network risks fragmentation, abandonment, or a slow decline — no matter how carefully the design is written.
That is the central existential risk: token design cannot substitute for human and operational coordination. Without the people who secure, build, and maintain the chain, there is no version of this that works.
5.4 Exchange support and listing risk
Exchanges may not support a community-led mint, remediation path, or continued L1. In the extreme, they may not keep Secret listed. Delisting or non-support would damage liquidity, price discovery, and accessibility for ordinary holders even if on-chain governance succeeds — and exchange policy is outside our direct control.
That said, I believe demonstrated legitimacy improves our odds meaningfully: a clear vote, validator and builder signaling, and a coherent public plan make it much harder for venues to treat community continuance as unsupported or illegitimate. That is a belief, not a guarantee.
5.5 Other material risks, briefly
• Remediation shortfall: the allocation improves the odds for victims; it does not guarantee full recovery.
• Market and liquidity shock: large mints and re-allocations can create volatility and confusion; liquid portions must be sized carefully.
• Legal / entity risk: forming and capitalizing the new entity, and implementing a tax, introduces jurisdictional, compliance, and operational risk.
• Execution risk: delivery depends on the new entity shipping software, parameters, and processes after a successful vote.
• Competing-plan risk: the Labs plan may still split attention and legitimacy.
6. What This Proposal Is Asking
At this stage: feedback. When parameters are finalized, the community will be asked to support — in principle, and then in binding form:
• Continuance of the Secret L1 under community stewardship after Labs’ exit from that role.
• Establishment of a new entity, which I would lead, with an allocation and a tax sized so the network’s economics are viable.
• A dilution mint that funds that entity, validators, relayers, builders, and remediation — with all SCRT holders included, staked Secret among them.
• Clear-eyed acceptance of large-scale dilution as the cost of a viable, aligned network. The working example in this draft is 80%; the final figure will be set after this feedback round.
Bucket weights, tax parameters, and vesting schedules will be in the final version (§7).
7. What the final version will include
• Final dilution percentage
• Allocation weights within the mint (new entity / validators / relayers / builders / remediation)
• Tax design: rate, base, recipients, on-chain mechanism
• Liquid vs. vested schedule per bucket
• Remediation eligibility rules and claims process
• Legal form and jurisdiction of the new entity
• Public description of the new entity’s capabilities and stewardship plan
• Signer set size and upgrade thresholds (e.g. ~7 of ~16)
• Modeling of Secret Labs / related-entity voting power, including transfers involving Secret Secret (sSCRT)
• Communication plan for validators, builders, and social channels
• Technical design of the mint / parameter-change path on the current chain
8. Closing
Secret Labs has said the community may continue the chain under a permissive license. This proposal is my attempt to turn that possibility into a workable reality: the same chain, with staked Secret included and remediation built in — both of which the Labs plan leaves out or defers — a new entity with the resources to do the job properly, and a mint sized so the economics can support a real team and real infrastructure.
This only succeeds if the community — especially signers, validators, relayers, and builders — chooses to make it real. But I’ve watched this community hold together through worse than most ecosystems ever face. I think Secret is worth continuing, I think this is the way to do it, and I’m asking you to help me get the details right before anything goes to a vote.
Comments are open. I’ll be reading everything.
— Lisa