The last few days have seen intense conversation across the ecosystem, and I think the plot has been somewhat blurred over time. The Mars and Neutron proposal isn’t about competition between Neutron and Osmosis - it’s about enabling the focus and deep cooperation required to build better products and turn them into industry leading primitives that bring distribution to the ecosystem.
The language of “exclusivity” was meant to help ensure this ability to focus, and despite being much less restrictive in reality than a quick reading would reveal, it has been removed to mirror the alternative proposal.
The proposal is meant to allow Mars to deliver a unique new product to the ecosystem, not irremediably tie it to a specific chain.
Cosmos has a distribution problem : low discoverability, poor onboarding, and, more importantly - insufficiently differentiated applications. While a number of projects have innovated in the ecosystem to provide better products, few have fundamentally disrupted their category of DeFi product. This type of disruption requires the right partner, deep cooperation, and focus. It requires building a unique product that can onboard users and capital from anywhere. This is what Mars and Neutron can accomplish together.
The first DeFi super-app
The purpose of our proposal was to enable Mars to have the funding, focus, and infrastructure to become the industry’s leading super-app, a powerful financial primitive that could subsume market share from centralized exchanges while providing all of the benefits of decentralization and censorship resistance.
This vision is a powerful one:
You’ve never used Neutron, and just learned about Mars. You open the app and connect your Ethereum, Celestia Rollup or Cosmos wallet. In one transaction and under one minute later, you’ve funded your credit account, and are able to access native integrations for the entire Neutron and Cosmos ecosystems. Your entire account contributes to your margin, enabling you to leverage trade, stake, farm and more across all Neutron connected chains, Ethereum and Rollups, thanks to IBC and Nexus. Complex strategies enabled by Mars’ credit primitives are now available to you with one click through the earn tab.
Bringing this first super app into existence requires deep and coordinated work to ship instant, seedless onboarding, interchain smart-credit accounts and other core features. But, with Neutron’s cross-chain infrastructure, Nexus and the wstETH bridge aggregation, the foundations have already been laid.
How does Neutron enable this vision?
A platform for builders
Neutron’s purpose is to provide top talents with the infrastructure and resources they need to build transformative applications and grow them into industry defining dApps. This is what our team thinks about all day, and it’s how we measure our own success.
As a platform, Neutron prioritizes the infrastructure needed by its ecosystem of builders, not by its own competing products. This makes Neutron a more predictable place to build, prevents or considerably limits breaking changes, contributes to better liveness, etc.
To support advanced DeFi applications, Neutron has ~3 second block times, which is expected to improve even further with the Neutrality upgrade and over the coming year as performance improvements are made. And thanks to Replicated Security, it is one of the most secure blockchains in the ecosystem alongside Cosmos Hub and Stride.
Neutron offers unparalleled opportunities to align with Cosmos Hub, Celestia, Ethereum and onboard their respective communities. Neutron’s ecosystem and contributors have nurtured deep working relationships and product integrations with each of them, as exemplified by Neutron’s pioneering of Replicated Security and the launch of the wstETH and Nexus bridges.
Critics have suggested the merger with Duality might contradict the platform first approach. This is not the case. Duality is a piece of infrastructure at the service of the ecosystem: it doesn’t take any fees, and instead enables dApps on Neutron to set their own fees to benefit from the activity they generate. It enables smart-contract based AMMs to compete on equal footing with standalone app chains and enables more capital efficient liquidity management strategies while aggregating and directing order flow towards the smart-contract ecosystem. Contributors from Neutron, Astroport and Duality collaborated on a doc describing this vision here.
Dedicated infrastructure
A number of key pieces of enshrined infrastructure are being developed for the benefit of Neutron smart-contracts. You can find a more comprehensive list here with example use cases.
| Module | Status | Comment | Example Mars Use Case |
|---|---|---|---|
| ICTX | Live | ICA for smart-contracts, with callbacks and more. | Trustless cross-chain governance and dApp integration for the Fields of Mars, V2, etc. |
| ICQ | Live | Permissionless KV store queries that don’t require target-chain modules for smart-contracts | Sanity checking prices and LST exchange rates, confirming deposits, automated response to depegs etc. |
| CRON | Live | Trustless automation | Trustless triggering of liquidations, rebalancing etc. |
| Duality | Dec 2023 | In-protocol orderbook for smart-contract DEXs and AMMS | Mars V2 integration to enable orderbook style leveraged trading, yield bearing collateral (LP), more capital efficient vault integrations, etc. |
| Block SDK | Dec 2023 | Custom fees, mempools, dedicated lanes etc. | Increased safety through top of block oracle update, top of block liquidations, gas-free lane to onboard users, etc. |
| Slinky | Q1 2024 | In-protocol oracle | More reliable price feeds, exotic price feeds, etc. |
| DH | R&D | Decentralized Hosting | Full stack decentralization, reduced legal risk, etc. |
Sustainable economics
Contrary to what has been argued in this forum, Neutron’s economics are sound and provide a more concrete value proposition than other networks.
The NTRN token is deflationary and thanks to Replicated Security, it is able to maintain a high degree of security while dedicating most of its resources to the long-term development of the ecosystem. As a result, Neutron has already attracted ~$40m in liquidity while only “spending” ~$2,000,000 worth of NTRN at the time of spending as part of the lockdrop. At 0.05c per dollar of liquidity this is among the best ratios in the industry.
Furthermore, dApps launching on Neutron can opt to share revenue with the Neutron DAO, aligning the DAO’s interests with their success and pooling resources to be redeployed as liquidity mining rewards, PBV and other mechanisms to sustain the growth of the ecosystem.
Finally, with > $25M worth of NTRN being transferred to the community pool, the Cosmos Hub (the issuer of interchain money) will now have a strong, material stake in Neutron’s success. With upcoming proposals expected to further this alignment, provide financial support to validators and engage in joint liquidity diplomacy, Neutron and the AEZ could become the main venues for ATOM and its volume.
Case study - Astroport
Astroport is a brilliant team with tremendous experience operating at scale. They’ve built and grown Astroport into a >$1.5bn TVL protocol pre-Terra crash, implemented trustless cross-chain governance and developed advanced pool types such as PCL that feature the benefits of concentrated liquidity while protecting users from getting rekt.
Astroport and Neutron contributors have been closely collaborating since Neutron’s genesis. In less than 7 months, this collaboration has attracted $40M of TVL to Astroport, millions of dollars of daily trading volume and has significantly contributed to sustaining high double-digit bonding APRs on xASTRO, which contributed to strengthening the price of the ASTRO token itself.
This collaborative success will continue as NTRN-ASTRO PBV is introduced, more pools are bootstrapped on and migrated to PCL and other advanced liquidity strategies are released and integrated with Duality.
Conclusion
I have tremendous respect for all Mars contributors and for the product they’ve built. There’s a bright future for them with Neutron and this partnership is the right next step in enabling Mars to become a transformative application.
It’s been a pleasure to see support and feedback from all sides of the aisle. Regardless of the outcome, we are excited to continue working with you all and cheering for your success.