What is Secret Network: programmable privacy and SCRT staking

Secret Network is a layer 1 blockchain designed to bring programmable privacy to the blockchain ecosystem. Unlike most public networks, where information is visible by default, Secret Network enables smart contracts to run with encrypted data, keeping the input, output, and contract state private.

Its approach is especially relevant for applications that need confidentiality without giving up on-chain verifiability, such as DeFi, identity, gaming, artificial intelligence, private governance, or sensitive data management.

In this guide, we’ll explain what Secret Network is, how its Secret Contracts work, what role SCRT plays, and why its focus on confidential computing sets it apart from other blockchains.

Secret Network is a blockchain built with Cosmos SDK that enables smart contracts with privacy by default. It can be defined as the first protocol with private smart contracts on mainnet, active since September 2020.

The network uses a combination of Intel SGX, Trusted Execution Environments, different encryption schemes, and key management to protect the data processed by its contracts. Its Secret Contracts are based on CosmWasm, the smart contract framework written in Rust and used within the Cosmos ecosystem.

In other words, Secret Network does not simply aim to hide transactions. Its goal is to allow applications to execute private logic: process sensitive information, return encrypted results, and control who can access certain data.

Transparency is one of the greatest strengths of public blockchains, but also one of their limitations. On networks like Ethereum or many other L1s, anyone can analyze balances, interactions, contracts, fund movements, and part of users’ behavior.

This makes it difficult to build applications that require confidentiality, such as private markets, identity systems, secret voting, AI tools using sensitive data, games with hidden information, or DeFi products where not everything should be public.

Secret Network introduces a programmable privacy layer so developers can decide what information remains private, who can see it, and under what conditions.

Secret Network is a blockchain built with Cosmos SDK that combines delegated Proof-of-Stake with Byzantine Fault Tolerance to offer smart contracts with programmable privacy. Its difference compared to other networks is not only in its consensus, but in the technical layer that makes it possible to process encrypted data without exposing it to validators, developers, or external observers.

Secret Contracts: the technical foundation of its privacy

Privacy on Secret Network relies on a combination of encryption, key management, and Trusted Execution Environments (TEEs). In practice, the network uses Intel SGX so validators can process transactions inside secure enclaves, where private data is sent encrypted, decrypted only inside the enclave, and, once the computation has been executed, the result is written back to the state in encrypted form. In addition, the consensus encryption seed only exists inside each validator’s TEE.

This architecture is complemented by remote attestation, the mechanism that verifies that the code is running inside an authentic SGX enclave and has not been altered.

SecretVM: beyond Secret Contracts

Recently, Secret Network introduced SecretVM, a proposal that expands its scope beyond the L1. Instead of focusing only on confidential smart contracts, SecretVM proposes a confidential computing layer capable of running broader applications and workloads inside TEEs.

This opens the door to use cases such as AI, inference, and sensitive services, and reinforces the idea that Secret Network should no longer be understood only as a blockchain with privacy, but as a broader confidential computing infrastructure.

One important point is that not everything on Secret Network is private by default at the same level.

The native token, SCRT, is public. It is used to pay for gas, stake, secure the network, and participate in governance. Basic operations with SCRT are part of the network’s public and verifiable layer.

Privacy becomes clearer with Secret Tokens, based on the SNIP-20 standard. This standard makes it possible to wrap public assets, such as SCRT, into private equivalents like sSCRT. In that case, transaction information, such as amounts or counterparties, can remain private through Secret Contracts and viewing keys.

In this way, the network combines a public layer needed for consensus, gas, and verifiability with a private layer for applications, tokens, and sensitive data.

Viewing keys and permits: access control for data

Since private data is not publicly visible, Secret Network needs mechanisms that allow users to view their own information or share it with third parties whenever they choose.

• Viewing keys work like an encrypted password associated with a specific contract. They allow private data to be viewed, such as balances or the history of a SNIP-20 token, as long as the correct combination of address and viewing key is known.
• Permits offer a more flexible alternative. Instead of storing a key in the contract state, the user signs a message with their wallet to grant access to certain data. According to the official documentation, permits are not stored in the smart contract state and do not require initiating an on-chain transaction, reducing friction and network load.

In practice, these mechanisms make privacy manageable: data is not public by default, but users can decide what to share and with whom.

SCRT is the native token of Secret Network. It is used for three main functions:

• Gas: used to pay network fees.
• Staking: enables participation in the security of the network.
• Governance: used to vote on protocol proposals.

At the tokenomics level:

• It has no maximum supply cap.
• Its inflation is dynamic: it remains around 9% when the proportion of SCRT staked is below 66%, and gradually decreases toward 7% when the bonded rate exceeds that threshold.

Secret Network also uses slashing. If a validator fails to maintain proper operations, it may face penalties for downtime. If it signs the same block twice, it may receive a much larger penalty for double-signing.

Conclusion: a powerful model, but with trade-offs

Secret Network’s approach is technically interesting, but it also comes with trade-offs. Its privacy largely depends on TEEs such as Intel SGX, which means hardware security, attestation, and node operation are critical components.

Programmable privacy does not depend only on the smart contract code, but also on an infrastructure architecture designed to protect data in use.

This reinforces the idea that Secret Network should not be understood only as a blockchain with privacy, but as an infrastructure specialized in confidential computing for Web3.

Would you like to take part in securing Secret Network? You can stake SCRT with Stakely and access professional infrastructure, continuous monitoring, and experience operating blockchain networks.