Hey everyone!
I just want to start by saying that I really appreciate that this forum discussion and potential proposal process was put forward. I want to thank @jose_delphi and the rest of the Mars contributors for electing to make these decisions in the open as part of a democratic gov process. I support the proposed format with one caveat: It might be nice to run the final voting process after the new year to ensure maximum attendance by Mars stakeholders. I understand that Mars contributors will pretty much carry the vote here either way (as it probably should be since this will determine where you spend most of your resources), but in the event that the contributor votes are split, the remaining staked MARS tokens may swing it, and I feel it’s important to try to get as many people out to vote as possible (especially given the short voting period on the Mars Hub).
Now, on to the substantive portion of the debate. As a medium-sized (five figures, USD) MARS holder and staker, I have a question, and then a few comments aimed at areas that haven’t been addressed by any of the contributors’ comments thus far.
I’ll start with the question as it’s pretty low lift:
- Under Neutron’s proposal, does the exclusivity provision apply only to new feature launches (perps, etc), or will it also apply to things like new collateral listings as well? If it does, I anticipate a significantly more impacted user-experience on the Mars outpost on Osmosis than there would be if this were limited to feature launches. As this would be applicable to potential future outposts as well, this would be giving up quite a lot vs the Osmosis proposal.
As for my comments, the Mars contributors have made perfectly clear so far that Osmosis has a far larger userbase and activity, more lindy, and is far less risky of a choice in terms of product prioritization, so I won’t rehash all of those comments. There are a few things that I think are being significantly underexamined as risks with Neutron though:
Competition Risk
Neutron’s proposal seeks exclusivity from Mars, but does not offer exclusivity in return. As has been mentioned here, Neutron is permissionless, and it’s exceedingly likely that many money markets and perps products will deploy there. In the event that one or more of those products attracts significant traction, Neutron will be highly incentivized to allocate resources to and prioritize those competitive products.
A lot of ink has already been spilled on Osmosis and Mars being potentially competitive, but it’s almost been assumed that this would not be the case on Neutron. As with the proposal to merge Duality with Neutron (which is almost certain to siphon a huge amount of market share from Astroport), Neutron will do what it needs to do in order to attract the most users, as it will rely on a massive ecosystem of diverse applications being used frequently in order for its revenue model to become viable.
Osmosis, on the other hand, has alternative revenue models in place to support long-term sustainability thanks to years of lessons on overincentivization based on mistakes that Neutron is currently in the process of repeating. Osmosis can afford to be more discerning and focus on core products and integrators like Mars. This feels like a good opportunity to remind everyone that Osmosis abandoned its own native lending product in order to support that functionality through Mars instead. Osmosis is incentivized to continue that support and integrate any competing solutions built on the L1 such that they’re all prioritized.
Cosmos Hub Governance Risk
I’ve seen ICS and Neutron’s position as a consumer chain touted as a benefit in passing this proposal in favor of Neutron. While potentially true, this poses risks of its own.
The Cosmos Hub is struggling to attract value of its own, and is increasingly taking steps in that direction that could present a risk to Neutron’s long-term sustainability. For example, I personally feel that the Hub will have Cosmwasm natively integrated in some form in the mid-term future. This action in and of itself will likely make Neutron a far less valuable place to deploy.
The Cosmos Hub could take any other action at any time that could create an existential crisis for Neutron and the applications developing on it. A great example of this is the proposed Stride merger. Had this gone through, any hope of Lido gaining significant market share in Cosmos would likely have been eliminated (or at least made significantly more challenging). In the event of something like this happening, as @sunnya97 mentions:
Not to mention that Osmosis will have no choice but to fully prioritize competing products were this scenario to occur in order to foster further growth of defi on its platform and iterate quickly. This is why Neutron’s is the riskier proposal. If this bet doesn’t pan out, it will be much harder to shift focus and recover from, whereas if Osmosis were to lose relevance, this wouldn’t be the case.
Another risk-factor is the social pressure incumbent in prioritizing consumer chains in BD efforts as a member of the AEZ. If the Cosmos Hub onboards a consumer chain lending or perps product, there’s a high likelihood that Neutron will shift a large degree of focus toward that lending product. Failing to do so may mean compromising the ATOM community that makes up the bulk of its userbase right now.
A quick note on liveness
I noticed that Neutron’s “liveness guarantees” have been a large topic of discussion here so I just wanted to quickly address this as well. There are two aspects to this:
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Osmosis’s daily epoch (a brief 7ish minute block once daily that doesn’t halt the chain but does give latency to transactions that are the functional equivalent of a halt).
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The recent transaction spam that has flooded Osmosis’s mempools in times of high volume, resulting in transactions being unable to get through.
With respect to the epoch, this is solvable, should have been solved long ago, and I’m super glad to see that the Osmosis development arm is willing to commit to a concrete date to solve it if it helps move the needle here
As far as the mempool spam, it’s extremely important to note that this is possible on any Cosmos chain currently, including Neutron and the Hub. Osmosis has fallen victim to it (imo) precisely because it currently houses perps and lending markets, making latency profitable, whereas other chains like Neutron do not. Once they do, I fully expect to see similar instances of mempool spam on Neutron / the Hub. The only difference is that Osmosis has already spent significant resources on mempool optimizations to reduce or eliminate entirely any instances of mempool spam. Neutron will have to go through these growing pains themselves, potentially at Mars’ expense.
Conclusion
As a MARS holder, as well as a significant holder of OSMO who would like to see Mars’ Osmosis outpost continue to innovate and play a leading role in Osmosis DeFi, I think launching the hub on Osmosis is the play here. The upside is massive, the risks of doing so are relatively small, whereas the risks of failing to do so are potentially existential in nature for Mars if Neutron doesn’t get the adoption that contributors hope it will.
