By digging more, I found a solution.
For anyone with the same issue, MYSQL_DATABASE secret on my ktor app should be set to:
jdbc:mysql://{your app name}.internal/{your db name}
{your app name} is name of the application when you did “fly launch” process.
{your db name} is the name you specified in fly.toml under MYSQL_DATABASE key.
Now it works. Thanks for listening to my TED talk