Secret Network minted 1.079 billion SCRT tokens on August 21 via the v1.26.0 software upgrade, under Proposal 365. The operation massively dilutes the supply to fund community continuity for the Cosmos-based layer 1 ahead of SCRT Labs’ announced withdrawal on September 1.
🔑 Key Takeaways
- 1.079 billion SCRT minted at block 26,790,327 via the v1.26.0 upgrade
- 308.4 million SCRT became liquid on day one
- Continuous inflation rate set at 5% post-upgrade
- Existing holders keep absolute balances but their collective share drops to roughly 25%
- Proposal 360 (Arbitrum snapshot) was rejected by the governance
A historic mint to fund continuity
Secret Network executed the 1.079 billion SCRT mint on August 21, diluting the total supply by approximately 75% in a single operation. The initiative, triggered by the v1.26.0 software upgrade, falls under Proposal 365 (« community-continuance »), adopted through on-chain governance.
The upgrade was scheduled at block 26,790,327. Data recorded at this block treats the issuance as a finalization event linked to the upgrade: no user transaction or classic mint hash appears in block explorers. Node secret-4 confirmed execution by reporting software version 1.26.0 and reached block 26,806,270, attesting to ongoing block production.
The dilution math is worth highlighting: pre-existing holders keep their absolute balances on the same chain, but the supply increase mechanically reduced their collective share to roughly a quarter of the total. A wallet holding 100 SCRT before the upgrade effectively holds the equivalent of 25 SCRT in a quadrupled supply, all else being equal.
The distribution mechanism
The plan assumed a pre-mint supply of 361.97 million SCRT, representing roughly 25.1% of the estimated post-mint total of 1.441 billion. An on-chain response later reported an actual total of 1.44346 billion, including pre-upgrade supply and continuous inflation.
The detailed breakdown of the 1.079 billion SCRT is as follows:
| Category | Allocation (SCRT) |
|---|---|
| Foundation programs | 299,000,000 |
| Core development | 299,000,000 |
| Ecosystem fund | 178,000,000 |
| Advisors | 72,000,000 |
| R&D | 72,000,000 |
| Validators | 72,000,000 |
| Builders & relayers | 43,000,000 |
| Remediation | 44,000,000 |
Of this total, 308.4 million SCRT became liquid on day one. The new economic model also imposes a continuous annual inflation rate of 5%, a structural factor that will weigh on future dilution of the token and on the effective yield of staking.
« This mint provides the resources needed to support maintenance, development, and validator participation after SCRT Labs’ departure. »
Secret Network Governance, Proposal 365
SCRT Labs’ withdrawal and the rejected Proposal 360
SCRT Labs had announced before the vote that it would cease all development and support for Secret Network starting September 1, regardless of the vote outcome. This declaration does not mean the chain will stop: continuity depends on maintaining sufficient staking power on the validator side and on community-driven technical support.
Simultaneously, the community rejected Proposal 360, which aimed to signal SCRT Labs’ support for a snapshot on Arbitrum. This rejection strips the proposed migration plan of an on-chain mandate. The proposed eligibility rules would have included native wallet SCRT, staked SCRT, and SCRT in unbonding, while excluding sSCRT (private tokens), bridged SCRT, contract balances, liquidity pool balances, IBC tokens on Secret, and SNIP-20 tokens.
These were only proposed eligibility rules, not actual loss conditions on the native chain. The rejection means these terms did not receive community validation and that the Arbitrum path as proposed by SCRT Labs failed to win voter support.
In practice, this rejection does not affect users’ on-chain balances: no funds have been lost, and the native chain continues to operate normally. The decision reflects a strategic disagreement on the proposed migration path rather than an immediate threat to the network’s viability.
Market reaction
At the time of coverage, the SCRT token was down 11.41% over 24 hours and ranked 1,136th by market capitalization. This reaction reflects the massive dilution and uncertainty surrounding the community’s ability to maintain the network without SCRT Labs’ support.
The most demanding phase now opens: whether the distributed allocations can sustainably support maintenance, development, and validator participation. Success will depend on coordination between validators, developers, and token holders in an environment that is now fully self-managed.
Conclusion
The 1.079 billion SCRT mint represents a radical decision to preserve the continuity of a Cosmos layer 1. By massively diluting supply, the community equipped itself with a treasury and aligned incentives, while shifting Secret Network to a 5% inflationary economic model.
September 1 will mark the real test: without SCRT Labs, on-chain governance will need to demonstrate it can handle maintenance, security, and development of a blockchain network on its own. The coming weeks will be decisive in assessing the viability of this transition, as well as the confidence maintained by holders despite a historic dilution of their relative position.
Sources
This article is published for informational and educational purposes. It does not constitute investment advice. Do your own research (DYOR) before making any decision.
