Community Continuance of Secret Network (L1)

Secret Governance
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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

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This will be SCRT Labs’ only response to Lisa’s latest proposal and the claims surrounding it.

The current draft asks existing SCRT holders to accept dilution whose worked example is 80%, while a new entity led by Lisa would receive both a token allocation and an ongoing tax. The size of that allocation, the tax rate, vesting, budget, team, legal structure and execution plan are all left to be determined later. The community can decide whether that is a credible path. We will not tell it how to vote.

But the proposal, and the campaign surrounding it, rely on claims about SCRT Labs that are false or seriously misleading. Because those claims are now being used to justify consequential decisions, the relevant facts should be placed clearly on the record.

Background

SCRT Labs created and built Secret Network. For years, we funded core development, infrastructure, contractors, maintenance and to an extent - work performed by SNF personnel, often quietly and without seeking public credit. We continued doing so at enormous financial and personal cost, including long after it was economically rational for us, purely out of belief in the network’s potential.

We built something genuinely important. Secret was the first mainnet blockchain with privacy-preserving smart contracts, and ideas it helped pioneer, particularly TEE-based confidential computation, are now used throughout the blockchain industry. We are proud of that work and of everyone who contributed to it.

Eventually, we concluded that the existing L1 model was no longer sustainable. We believed, and still believe, that migrating SCRT to Arbitrum was the best first step toward giving SCRT a sustainable future. The remaining community has expressed a strong preference to continue the L1. We respect that preference.

Remediation and SNF funding

The claim that Labs refused to address remediation or fund SNF is false.

Before announcing the migration proposal, we held multiple open discussions with SNF’s operational team. Lisa was not participating in those discussions, given the fact that she informed us almost a year ago that she had decided to step back from active management of SNF. We agreed that automatic inflation would end, SNF would propose the funding it required, SNF would propose an amount for Axelar remediation, and Labs would develop the complex code needed to identify affected holders fairly.

Work on that code began. As with any responsible technical undertaking, the final mechanism remained subject to technical feasibility and risk assessment.

Our proposal explicitly provided for an SNF treasury, staking rewards and a dedicated Axelar-remediation treasury. SNF never submitted the agreed proposals defining the amounts it wanted for either its operations or remediation. Instead, it stopped engaging with us and issued a counterproposal asserting that Labs had refused to act.

Why we voted No with Veto

We voted No with Veto on the previous SNF proposal (Proposal 361). We need to clarify that we did not veto the idea of continuing Secret as an L1.

The first SNF proposal purported to authorize the “recovery of Labs-associated tokens” and stated that, if Labs did not agree, SNF would pursue the decision through unspecified “other means.” We vetoed an attempt to appropriate assets that do not belong to SNF. That is fundamentally different from opposing L1 continuity or remediation.

The new proposal seeks a similar economic outcome through dilution. Its worked example reduces all existing holders collectively to 20% of the resulting supply and distributes the newly created majority among a new entity, validators, relayers, builders and remediation recipients. That may or may not be what holders want, but it should be described plainly.

Claims about Labs’ holdings

There is no hidden Labs majority, and SCRT Labs does not control anything close to a majority of the network. Our total current interest in SCRT is below 10%, a modest stake and nowhere close to a controlling interest.

Most SCRT Labs assets are publicly known and labelled. Smaller operational wallets exist for ordinary business purposes. The suggestion that Labs holds some unexplained, dominant interest in Secret is simply untrue.

Attempts to take control of other assets

There is also serious reason for concern that SNF has attempted to take control of other assets it does not own, and then publicly reversed the facts when challenged.

I created the Secret Network X account in 2015 under my own email address. SNF was given operational access to post through it, and I specifically made clear that this did not transfer ownership. SNF personnel then deliberately changed both the password and recovery email in an attempt to lock the owner out. After I appealed to X Support, the account was restored to me.

Lisa subsequently claimed that I had locked SNF out because I wanted to prevent her from publishing criticism. That is false. I recovered the account only after its credentials had been changed without authorization and I had been deliberately excluded from my own account.

The server dispute has been similarly misrepresented. Fluidefi, another company run by Lisa and her husband, hosted Labs-owned equipment. Our usual contact stopped responding to us in May. After repeated unanswered attempts to communicate, Labs sent a standard termination notice concerning the contractual breach and requested the return of its equipment. There were no personal threats against any Fluidefi personnel.

We are still waiting for a substantive response from Fluidefi and return of SCRT Labs’ assets.

These are not disagreements over tokenomics or governance. They concern control of property and accounts that SNF and Fluidefi do not own.

The broader campaign

Lisa, certain SNF personnel and related parties, have been conducting a smear campaign against SCRT Labs. This has been accompanied by the selective leaking and misrepresentation of information from private groups, false claims that Labs controls SNF, and the use and amplification of third parties to attack and intimidate Labs employees.

One individual receiving private information called SCRT Labs a “scam company,” encouraged community members to target employees, created AI-generated videos attacking them and their family members, publicly disclosed private information, discussed compiling employees’ identities and locations, and made statements about pursuing employees and their relatives.

This was not confined to an unofficial or unaffiliated group. A message encouraging people to identify and target Labs employees was pinned in the main Secret Network Telegram channel, which is owned and controlled by SNF. Material officially pinned in SNF’s principal community channel cannot reasonably be dismissed as the independent conduct of an unrelated third party.

Lisa has simultaneously portrayed Labs as the party issuing threats. The documented conduct tells a very different story.

We have preserved the relevant records and reserve all legal rights and remedies concerning company property, unauthorized account access, contractual breaches, confidentiality, harassment, publication of private information, threats and false factual statements. We will not litigate those matters through Telegram, but neither will we waive them or allow the underlying conduct to be rewritten publicly.

Questions the community should ask

Lisa’s proposal asks the community to finance a new entity that she would lead, relying expressly on her record of leading SNF for the past three and a half years. That makes SNF’s own record directly relevant.

Where are SNF’s financial reports for those years? How much funding did it receive, how was it spent, and what compensation was paid to its leadership? What engineering and operational capacity was built? What assets remain?

In August 2025, Lisa informed us that she was stepping back from active management and moving into an advisory role. To our knowledge, that change was not clearly disclosed to the community. What work did she perform after stepping back, and what salary or other compensation did she continue to receive?

SCRT Labs was supposed to hold a board seat at the Foundation. Yet for over a year, we were not invited to a board meeting, and we never received meaningful financial disclosures (or any at all). In practice, the basic governance, oversight, and transparency expected of a foundation managing community funds were never provided. In the absence of that reporting, we can only assume that substantial compensation continued to be paid, potentially including after Lisa stepped back from active management.

Before approving a massive mint, a continuing tax and a large allocation for another entity under the same leadership, holders should reasonably ask for complete financial statements, compensation disclosures, budgets, governance arrangements and a clear accounting of what SNF delivered during the previous three and a half years.

Where we stand

SCRT Labs has consistently tried to do right by Secret and its community. Our migration proposal reflected what we believed, and continue to believe, was the strongest available path toward a sustainable future for SCRT.

At the same time, it is clear that much of the remaining community wants to continue Secret as an independent L1. We welcome serious and ambitious proposals capable of making that path sustainable. SCRT Labs will step down from development and support of the L1 on September 1, and we would genuinely like to see capable and genuine people step forward and build what comes next.

What we cannot accept is for that transition to be pursued by bullying SCRT Labs and its employees, attempting to take our property, manufacturing inflammatory claims of hidden control, or rewriting the network’s history in order to justify a transfer of economic power under false pretenses.

Whether the latest proposal, or any future continuity proposal, is good or bad is for holders, validators and builders to decide. SCRT Labs will sit those decisions out. This statement is not an attempt to direct the outcome. It is simply our one response to a false public record that has increasingly been used to justify attacks against us.

We still believe in Secret’s underlying mission. We hope those who choose to continue the L1 can build something honest, transparent and sustainable, and that the community ultimately finds a path forward that serves its holders, builders and users.

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It bothers me that there is no real vision for direction other than dilution of holders. That isn’t a cause to rally behind. There are multiple exciting directions you could take, my favorite being MPC multi chain architecture as it ensures anonymity with connection to XMR where private computation might not be complete. To be in a leadership role for that amount of time without a vision that you are rooting for screams yet another grift to me!

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another thing everyone reading this should understand. Guy Ziskind claims that he does not control Secret network foundation, however, he is the true beneficial owner listed with the Cayman Island government for that company and he is the only one that can control the entity itself. Lisa Loud requires his approval in order for any changes. There is no board because guy didn’t approve a board or otherwise didn’t do what was required to make a board real and him not being on the board is irrelevant. He is the true beneficial owner. He is categorically, deceiving people by implying he does not control that entity. @guy

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Respectfully, as someone who lost funds in the recent hack, the response to this incident is seriously concerning. And that’s ignoring the current feud between SNF and Secret Labs.

It’s been more than a month since the hack was announced, and there isn’t transparency around conversations with Axelar, or further documented attempts to coordinate with them to compensate users, which absolutely erodes trust in this project. Those conversations seem to be happening either privately or not at all.

I understand that as a user of the network we accept some risk, but there’s also a responsibility for the maintainers of the network to do due diligence in protecting user funds, and both Secret Network and Axelar fell short on ensuring the bridge integration was secure. It seems like both parties are happy to blame each other, move on, and leave affected users uncertain about how or if they’ll receive any compensation.

I haven’t seen anyone talk about how to secure the existing L1 integration so that funds can be remediated, or if there’s another process for it. I don’t see any mention of improving standards around independent audits or verifying bridge integrations, which makes me feel like these proposals aren’t actually about supporting the long term future of the project.

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The company on Secret Network, the core dev team who deployed the contract without security check, is Gamma Research and Development Ltd. principal office located at Yigal Alon 94B, Tel-Aviv, Israel. This is being shared for the purposes of legal service for those who may be interested. The report is here Common Prefix — Secret Network CW20-ICS20 Exploit: What Exactly Happened

There have been parties interested, but Secret Labs (Gamma) has not moved the needle on this.

As for going forward, we’re working on it as a community now. We’ll get more information as we are able. And to be clear, we have no intention of proceeding without remediation period.

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