A node operator on the network of Secret, a popular altcoin project, has announced that it will shut down its nodes. He cited the complex and stressful node verification process in the network as the reason behind this. Developments regarding the Secret (SCRT) altcoin pointed to a leadership conflict between Secret Labs and the Secret Foundation. Here are the details…
Node validator for altcoin leaves network
SmartStake, a key validator in the Cosmos ecosystem, has announced that it will shut down its nodes after the Secret Foundation’s founder Tor Bair’s announcement about his personal profit. The validator cited developments such as “complex/stressful validator operations… cost/effort of validator operations…” as reasons for shutting down its service. However, Smartstake clarified that the shutdown process will be calm and there will be no interruption in the delegation.
PSA for @SecretNetwork delegates of Smart Stake:
Smart Stake will be shutting down its Secret validator on 21st Feb. Please redelegate to another validator.
Reasons: 1) Complex/stressful validator operations on $SCRT 2) Cost/effort of validator ops 3) recent events
— Smart Stake (@SmartStake) January 29, 2023
Another Cosmos validator, NotionalDAO, echoed the statement with SmartStake’s CEO, Jacob Gadikian, confirming that “NotionalDAO is in solidarity with SmartStake and SmartStake will not bring the node up again.” The allegations against Bair emerged through the foundation’s governance forum on January 27. Guy Zyskind, the founder of Secret Labs, released a statement in which the allegations were made public.
Is there a leadership conflict?
Zyskind announced that the Secret Foundation has sold a significant amount of SCRT. Additionally, “Tor has cashed out a significant portion of these revenues as dividends.” These actions were not disclosed to the community and approximately $4 million was withdrawn in Q4 2021 alone. The resulting plan proposed by Zyskind was to dissolve the Secret Foundation by returning stakes to the community and reforming it under a new leadership. According to the statement, the new organization will “maintain a transparent and audited operation…[and]…submit annual funding requests to the chain with a clear budget, milestones, and requests.” Also, the post ended with Zyskind making statements about the future of Secret Network as follows:
As a final note, we would like to say that while we express and acknowledge these concerns, we are also very optimistic about the future. The Secret community is equipped to handle the necessary changes and this restructuring will help the platform reach new heights as we work towards our Secret 2.0 vision.
Things turned out differently for Bair.
Bair announced the same administration forum stating that withdrawals are only part of “vested” tokens. The Secret Foundation founder said he started receiving a salary in 2021 and had earned “a portion of the tokens” by December. He confirmed an “OTC sale in SCRT tokens,” converting tokens to USD and holding stablecoins in the foundation to pay dividends to him. He also announced that he owns 375,000 SCRTs as vested tokens and receives a $2.62 million dividend. He also used the following expressions:
This information can be verified in our 2021 tax returns, which were previously reviewed by Secret Labs, and I have disclosed this information to them before.
While Bair explained that “the time for change has come,” he apparently expressed his “desire to be a part of this change” privately to those in the community. In direct response to the allegations made by Zyskind, Bair said, “This claim is false. We have previously published our statement regarding this event, which is available on this forum,” he said. Among the comments, it was noted that people were selling Bair’s SCRT token above the peak level of $ 7 . According to cryptokoin.com data, SCRT is currently changing hands at $ 0.788.
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