Overview
- In a July 7 governance post, SCRT Labs proposed converting SCRT to an ERC‑20 on Arbitrum and using a one-time snapshot on Sept. 1, 2026 to determine eligibility for the swap.
- The plan was prompted by a June Axelar-Secret bridge breach that infinite-minted about $4.7 million and exposed weaknesses in legacy bridge integration code without directly compromising native SCRT.
- Under the proposal SCRT Labs would stop formal maintenance of the Cosmos layer‑1, publish the source code under a permissive license, and lower staking inflation from 9% to 5% if the migration is approved.
- Only native and staked SCRT held in self-custodied wallets at the snapshot would qualify for conversion so holders must move tokens out of custodial, wrapped, contract-held, or IBC formats to remain eligible.
- SCRT Labs says Arbitrum offers deeper liquidity, better developer tooling, and stronger wallet infrastructure to support a pivot to confidential AI and verifiable compute, a rationale that coincided with a sharp drop in SCRT’s market price after the announcement.