Layer 1 network dilutes supply by 75% overnight to fund survival after main developer quits

Secret Network executed a 1.079 billion-SCRT mint on Aug. 21 as backers of Proposal 365 moved to keep the Cosmos-based layer 1 operating ahead of SCRT Labs’ Sept. 1 support cutoff.

Proposal 365 passed and scheduled the v1.26.0-community-continuance upgrade for block 26,790,327. Results from that block record the full mint as a finalize-block upgrade event, with no normal user transaction or mint transaction hash.

After the upgrade, the live secret-4 node reported software version 1.26.0 and reached block 26,806,270. Those observations establish that the upgrade ran and block production continued, while the proposal still leaves development, infrastructure and validator participation dependent on community execution.

The continuance plan’s worked example used 361.97 million existing SCRT, about 25.1% of an estimated 1.441 billion post-mint total. A later bank-supply response showed 1.44346 billion SCRT. That live total includes the actual pre-upgrade supply and continuing inflation, while the block results establish the one-time mint at exactly 1.079 billion SCRT.

Existing holders kept their absolute balances on the same chain, but the additional supply reduced their collective share to roughly one quarter of the total.

The mint assigned 299 million SCRT each to foundation and core-development programs, 178 million to an ecosystem fund, and 72 million each to advisors, research and development, and validators. Builders and relayers received 43 million, while 44 million went to remediation. The v1.26 economics made 308.4 million SCRT liquid on day one and set ongoing inflation at 5%.

Sept. 1 shifts responsibility to community backers

Secret Network voters rejected Proposal 360, SCRT Labs’ signaling proposal for an Arbitrum snapshot. The rejection means the snapshot terms did not receive an on-chain community mandate.

Under that proposed plan, native wallet SCRT and staked or unbonding SCRT would have been counted. It would have excluded private tokens such as sSCRT, bridged SCRT, contract and liquidity-pool balances, IBC tokens on Secret, and other SNIP-20 tokens. Those were proposed eligibility rules rather than current loss conditions on the native chain.

SCRT Labs said before the vote that it would conclude development and related support for the Cosmos-based L1 on Sept. 1 regardless of the outcome. Its statement did not schedule a chain shutdown: continued operation depends on validators maintaining enough staking power and community backers assuming the technical workload.

The mint therefore gives the continuity effort resources and aligned incentives. Sept. 1 will begin the harder test of whether those allocations can support durable maintenance, development and validator participation.