Neutron and Osmosis Mars alignment proposals - a path forward

[dancreee]

Overall, where to support moving the Hub to has been a very difficult decision to make for Mars Protocol contributors. Even now after many weeks of internal discussion the team is still partially split on opinions of where it should go. Ultimately both places are great homes and yet neither are perfect coming with their own set of pros and cons.

As others have mentioned, Mars Outposts are already on, and will remain on both Osmosis and Neutron and I hope they can flourish in both places. The 3 month exclusivity on major features is not a big deal in my eyes - the complexity of moving major features to a new chain can easily take that long anyway. However it would be optimal for Neutron to agree to remove this from their proposal, which would help the community be at ease over internal competition between Cosmos chains vs growing the pie in general.

For Mars Hubs’ new home I am currently favouring Neutron. There are a few reasons for this:

• Perps

The Neutron deal does come with a three month exclusivity period and I agree this is not ideal. However right now, should Mars build out a perps product - imo it makes more sense to launch Mars perps initially on Neutron.
Osmosis already has Levana perps, additionally Osmosis has indicated their desire to build perps themselves. While it’s possible that all the perps on Osmosis can be complementary - this hasn’t been figured out yet and competing with the L1 you call home at its own product is not an ideal situation to be in.

I want to finish this point by highlighting it is possible Mars and Osmosis perps designs can be complementary to each other, and so there is still a future where it makes a lot of sense to deploy perps on Osmosis too.

• Liveliness

Osmosis has some liveliness issues around:
a) daily epoch reward distributions and
b) very frequent chain upgrades compared to other chains like Neutron and Terra.

These liveliness issues do not really have any impact on the Osmosis DEX, so I understand why it has not been a priority to change them. But liveliness issues are far from ideal for credit protocols who take on insolvency risk during these times. For Mars this has been an acceptable risk for now at the current amount of leverage on offer - we’ve run some modelling to confirm this. But if in the future Mars wants to offer higher leverage opportunities such as with a perps implementation this becomes more troublesome.

I would love to see some improvements made here on Osmosis making it more hospitable to credit protocols such as Mars and Levana. (kudos to Osmosis so far for developing their downtime detector module to help us mitigate liveliness issues too)

• Alignment

Osmosis, in my opinion, is first and foremost a DEX, secondly a DeFi hub. Its community naturally prioritises DEX functionalities and OSMO tokenomics. But I think the Osmosis community could do a better job of considering how its governance changes impact the other protocols that are also building there. Neutron, at least in this early stage of its development, has shown more vision towards being a focused DeFi hub. Although the acquisition of Duality could complicate this.

I want to clarify that Sunny, Dev and a few other core Osmosis contributors here have gone out of their way to be engaged, supportive and accommodating of Mars. This point is more reflective of the greater Osmosis communities alignment as a DeFi Hub.

• Neutron backed by ICS

Not only does this make Neutron more secure right now, this also opens up a new opportunity for Mars to align closer with the Cosmos Hub and gain the support and usage of a new community.

[jose_delphi]

Hi everyone, I’m Jose - Head of Delphi Labs - the company that originally incubated Mars Protocol. First of all, I’d like to say its a testament to the quality of Mars’s community both that it received two compelling offers from two of the best ecosystems in Cosmos, and that it has managed to maintain such civil and high-quality discussion. Everyone should be very proud of themselves for this.

Now, on the offers. I’ll start by going through what the offers entail, then I’ll cover the tradeoffs between them as I see them, and finally I’ll explain how I’ll be voting and why.

To start with, it’s worth noting neither offer involves Mars abandoning Osmosis or Neutron. Mars has existing outposts on both Osmosis and Neutron, and these will continue to exist regardless of what offer the team goes with

Rather, the offers center around:

a) Mars Hub
b) Priority and short-term exclusivity on new features (in the case of the Neutron offer)

Let’s break these down a bit:

Mars Hub

Both teams want Mars to move its governance hub (which is currently on its own chain) to their respective chains. Mars hub governs all Mars contracts across all outposts and currently lives on its own independent chain (Mars Hub).

The benefits of this for Osmosis/Neutron are firstly that, assuming Mars is successful, significant fees from all outposts will flow back to the hub chain - increasing the chain’s GDP. In addition, the token will be minted natively on the hub chain and all token staking will happen there, generating additional economic activity and attention. At a high-level, you can think of this as similar to countries competing to get a successful company’s headquarters to be based there.

Focus and exclusivity

There are very few skilled application dev teams in crypto, and even less of them on Cosmos. Mars is an excellent team and its application will bring significant value to whatever chain its on. While Mars could theoretically deploy on every chain, realistically there are resource constraints here that make this unfeasible, especially for a product as complex as Mars v2. Both Osmosis and Neutron want Mars to prioritise their own chain in terms of new feature releases. Neutron additionally wants Mars to provide 3 months of exclusivity for perps, whereas Osmosis has relaxed this requirement

What does Mars get?

In exchange for moving its hub and providing exclusivity, Mars Protocol receives $3m USDC in a token swap for MARS tokens at a discount to a TWAP. This is money the Mars team can use as runway to help it build out its vision.

This provides better incentive alignment compared to the grant wars that are the current status quo between L1 ecosystems. I believe this conditional token swap will end up becoming a market standard for chains supporting ecosystem projects

Tradeoffs between the offers

In addition to the 3 month exclusivity which I believe is relatively unimportant, the more important tradeoff between the deals relates to the focus Mars will devote to the chosen ecosystem, and the consequences of that

I’ll now go through each one and the tradeoffs as I see them:

Osmosis - the positives

Osmosis is undeniably the product with the most traction on Cosmos, and currently acts as Cosmos’s DeFi hub, with the highest liquidity, volume, users (around ~50k active wallets), and IBC connections. It’s also where the majority of Mar’s traction currently comes from, with the Osmosis outpost holding 95% of Mars TVL. Sunny is a visionary and one of the best founders I’ve had the pleasure of interacting with in the space. Dev is also a gigabrain, and as they continue to succeed and grow this will be bullish for Mars which can ride Osmosis’s traction and benefit from Sunny and Dev’s expertise.

Moving the hub to Neutron will likely erode many of these benefits over time. Neutron is a direct competitor to Osmosis, particularly since the Duality acquisition which moved it from a purely generalised smart contract network to an app-specific DeFi hub. If Mars moves to Neutron, Osmosis is likely to deprioritise mars in favour of Osmosis-native primitives, since it will see Mars as a Neutron import. We’ve already seen this begin to happen with the Umee announcement coming as a reaction to the Mars contributors communicating their intention to take the Neutron deal. Sunny has also indicated the move would push Osmosis to build its own credit account infrastructure in order not to be so reliant on Mars.

Osmosis - The negatives

Osmosis is both a L1 (Osmosis chain) and an application (Osmosis DEX). This is its primary strength but also a weakness from the perspective of other applications on the chain as Osmosis will naturally prioritise its own application in its decision making. This has happened in small ways in the past such as the launch of concentrated liquidity which broke a lot of Mars vaults, but it’s likely to become more pronounced in the future given Osmosis is also planning its own perps product.

Ultimately, while applications help Osmosis expand its feature set in the short-term, in the long-term there is a tension where Osmosis is incentivised to optimise for OSMO holders and internalise its most successful applications. As a thought experiment, consider what happens if Levana perps begin to generate significantly more revenue than Osmosis itself?

Relatedly, Osmosis’s focus on its own application and its traction with other apps means it has less focus/time to devote to Mars.

Neutron - The positives

Neutron has burst onto the scene and while only a few months old, is already making big moves. While overall traction is much lower than Osmosis, $NTRN itself regularly does multiples of $OSMO volume, with on-chain volume also surpassing Osmosis some days (e.g. yesterday). The team behind Neutron comes from P2P - the same one that built Lido - and they’re experienced builders with a clear vision and the resources to pull it off. We’ve already seen them make smart moves in a short period of time, including

Its token is generating significantl volumes, and it has managed to make some smart decisions, including bootstrapping wstETH liquidity, the Duality acquisition, Astroport hub move, and the Timewave deal. The team behind it is P2P - the same one that built Lido - and they’re experienced executors with a clear vision and the resources to pull it off.

It’s also more of a generalised chain than Osmosis and as such its incentives are more aligned with Mars long-term, especially given the revenue share built into the proposal. As a result of being earlier stage and having less traction, it will also have more ability to focus on helping the Mars team succeed. This arguably gives Mars more secure footing to build on for the long-term,

Neutron - The negatives

The primary negative as I see it is Neutron’s significantly lower traction compared to Osmosis. This is exacerbated by the fact that, as I outlined above, I believe Mars risks giving up its position on Osmosis with this move as well. Ultimately, the Neutron deal means the Mars team is betting more on itself since it’ll have to play a large role in growing activity on Neutron, compared to Osmosis where it can benefit from the existing traction and momentum.

In addition, I don’t think it’s a given that Neutron will always be a neutral place to build. The acquisition of Duality confirms this,

What I think

First of all, it’s important to note that I’m just a single contributor here. Ultimately, each of the 30+ contributors to Mars is contractually obligated to vote independently and we’ve encouraged them all to respectfully post their opinions on the forum. Based on my conversations, I think the vote will be quite close. Whatever the result, all contributors will back the decision 100%

That being said, I’m currently leaning towards Osmosis because: a) lack of exclusivity means Mars can still choose to launch on Neutron if it so chooses b) the Mars team doesn’t give up the existing traction on Osmosis

How a decision can be reached

Ultimately, assuming each of the proposals pass their own governance, I believe this should simply be a vote by MARS holders reflecting the desires of the community and builders. As mentioned, builders will not be voting as a block and are contractually obligated to vote independently.

Whatever happens, it’s awesome to see the value both Osmosis and Neutron place on Mars, and I’m very confident the team will succeed wherever they go

Disclaimer: I have a lot of conflicts here, but have tried to consider this as independently as possible. Nevertheless, I think people should be aware that Delphi Ventures is an investor in Neutron and that I myself am an angel investor in Neutron. I also hold both NTRN and OSMO personally. I also hold a lot of MARS

[Dohko_01]

Yes - definitely. I’m mostly referring to execution risk as well as chain stability, which I see being lower on Neutron. Mostly for all the reasons other contributors have mentioned. Which have to do with less of a mentality of deploying fast & frequently (in exchange for less QA and higher chance to break things). As well as with Mars being the flagship app there, we’d get in my view high focus & support. Last - in regards to stability, it’s the concept of chain halting & block speed - which I understand you already addressed willing to make adjustments (some in the near term such as removing the daily epoch, others potentially on a longer time horizon - such as block speed).

[piobab]

Hi everyone!

I am Mars contributor. Below are my thoughts.

Technical Overview:
My involvement with Mars Smart Contracts has provided me with valuable insights into the technical considerations regarding our product on Osmosis and Neutron. Notably, both platforms support Cosmwasm, and the Mars contracts are largely chain-agnostic. Custom implementations for the oracle, swapper, and zapper components are required, focusing on price sources and Dexes. Osmosis employs Osmosis Dex/Twap and Pyth, while Neutron utilizes Astroport and Pyth. The transition between the two platforms is manageable from a technical standpoint.

Working closely with Osmosis developers has been a positive experience, benefiting from their extensive knowledge and support. They have implemented crucial modules such as TWAPs with a downtime detector and a testube that we frequently use. In contrast, Neutron represents a new field that requires exploration, introducing an element of uncertainty from a development perspective.

Liveliness issues, such as rewards distribution, chain upgrades, and potential overloads, are pertinent considerations. Osmosis, with its rapid development and innovation, possesses the strength of quick iterations and feature releases. However, this pace could be a weakness, as it limits the time available for ensuring quality and security. Neutron, backed by ICS as a permissionless, universal platform, offers Mars the flexibility to choose from various DEX options.

Economic/Product Overview:
Delving into the economic and product aspects, Osmosis stands out as the largest Cosmos Dex with a great community. There exists the possibility that Osmosis may independently develop a comprehensive suite of products, potentially including perpetuals, where Mars might become less relevant within their ecosystem. On the other hand, Neutron emerges as a serious contender with P2P support, providing a platform where Mars faces no competition from the chain itself. However, Neutron currently exhibits a smaller liquidity and community.

Summary:
In weighing the technical and economic/product aspects, the decision is multifaceted. From a technical standpoint, Osmosis has been a known and reliable partner, while Neutron represents a new frontier. Liveliness issues on Osmosis, coupled with its fast-paced development, pose both strengths and potential drawbacks. Neutron, with its backing from ICS and a more open platform, offers flexibility but comes with the challenge of building a community.

Economically, Osmosis, being the largest Cosmos Dex, holds promise for Mars integration but may potentially overshadow our relevance. Neutron, although currently with a smaller community, provides an environment where Mars can thrive without internal competition.

Neutron represents a universal platform without chain-level DeFi products, embracing permissionlessness. This aligns well with Astroport, making it my preferred choice for Mars governance.

In conclusion, while Osmosis may be a strong choice for Mars product in the short term, Neutron’s potential for alignment and support over the long term makes it a compelling option for Mars Protocol’s future development.

[JonathanE]

I agree with Jose’s thoughts, as well as with his conclusion. In the interest of not being redundant here, I’m just gonna add some additional, complementary thoughts (consider them a “Quote Tweet” over his post):

In my opinion, the most important reason for taking the Osmosis deal is not to jeopardize what we have already built. In its current form, Mars is already the most sophisticated leverage protocol on Cosmos and it stands to benefit significantly as activity within Cosmos (and Osmosis by extension) continues picking up. While I think Neutron will also benefit considerably from a Cosmos resurgence, I think Osmosis will keep being the de-facto hub at least in the short and mid-term. And, in that scenario, Mars would be the canonical leverage protocol of the de-facto hub of Cosmos.

If Mars chooses the Neutron deal, my fear is that the protocol will jeopardize this enviable position in which it finds itself right now. We have already seen hints of this with the Umee <> Osmosis merger proposal and I think further steps from Osmosis in this direction are to be expected.

TLDR: We’d be sacrificing being kings on Osmosis for a potentially brighter future on Neutron. This is a riskier bet than I’m willing to take at this point.

–

P. S.: I will fully support any decision the community makes. I think this is what decentralization looks like and in the end I’m convinced the decision we end up going for will make the protocol stronger.

LFG.

[lex_node]

Adding my thoughts on the Mars Hub migration proposals:

• Osmosis and Neutron teams/visions/tech are both excellent, both full of people who are somehow simultaneously visionary/brilliant and really dope human beings. The Cosmos ecosystem is truly spoiled to have both of these chains, and I think Mars can thrive through a partnership with either one of them.
• That being said, my own view is that the proposed partnership with Osmosis is a better bet for Mars. This stems from a mix of assumptions and predictions I have about the state of each chain, Mars, and the broader market:

Mars Has Much More to Lose by Taking the Neutron Deal

1. Although the plan is to keep Mars outposts on both Osmosis and Neutron, because Osmosis currently has more power/influence and is a true appchain, whereas Neutron is meant to be more of a neutral Ethereum-style platform within Cosmos, I don’t believe the Mars outpost will remain viable on Osmosis for long if it takes the Neutron deal.

2. Because Osmosis literally is a DEX app, the Osmosis’ team’s close cooperation with any guest app on Osmosis is critical, and without it, the guest app will simply break and/or wither away.There are all kinds of areas where Osmosis’ team’s close collaboration has been and will be necessary–maybe it has not been perfect so far, but it would assuredly get even worse if Neutron is seen as Mars’ main partner If Mars takes the Neutron deal, Mars will become a second or even third class citizen on Osmosis, will likely be replaced with similar app(s) that are treated as first class citizens (as Mars currently is), and Mars will not remain long-term viable on Osmosis.

3. By contrast, although the Neutron team’s support will definitely help Mars thrive on Neutron, Mars could work on Neutron without that support, it would just be less relatively successful among Neutron apps (b/c let’s face it Neutron community will probably do a similar deal with another dApp instead) and probably less fun (less cool collaboration).

4. The 3-month exclusivity of new major features to Neutron also means that Mars will not have state of the art features on Osmosis, leaving opportunities for a competing protocol (including Osmosis itself) to launch those features there first.

5. When added to the fact that Osmosis currently has a significant lead in users and TVL and mindshare both inside and outside the Cosmos ecosystem, and that Mars’ Osmosis outpost is currently considered its flagship outpost, (2) + (3) + (4) simply means that a Mars outpost is unlikely to remain viable on Osmosis, and thus Mars as a project/community has more to lose by taking the Neutron deal over Osmosis. Therefore, focusing on Neutron has to be not just a good bet (which I believe it is), but so much better of a bet that it warrants the (in my mind, likely) result of ultimately not having a viable outpost on Osmosis at all–I am not sure that’s true, but maybe.

DeFi is Simply Too Competitive, all DeFi Apps Trend Toward the Same Features, and Therefore a Merger/Consolidation Path with a SuperAppChain is more Attractive

1. Mars is very ahead of the curve on its thinking and features, but in a crypto industry with open code, breakneck innovation speed, and already having a few dominant multi-chain DeFi incumbents like Aave and Uniswap, no mere tech/idea edge lasts long. We’ve already seen how Uniswap has become a ‘fast-follower’ on AMM innovation by smaller protocols, quickly adopting bleeding-edge ideas from CoWswap and others into new versions of Uniswap–the same will be true of the larger credit markets like Aave with Mars’ ideas like credit accounts etc… All the big Ethereum DeFi DApps are already multichain within Ethereum–now that dYdX has moved from Ethereum to Cosmos, then if the Cosmos ecosystem really starts popping, it’s only a matter of time before the big Ethereum DeFi daddy incumbents look to have outposts in Cosmos as well. At the same time, it is very easy to launch ‘vampire-attacks’ by smaller/newer protocols as well. So, every DeFi app, including Mars, is going to face fierce competition both from incumbents and from upstarts–over and over again, ceaselessly. I think the Mars community is excellent and definitely could “win Cosmos”, but there’s a very real chance it could fail to be the clear winner or that if it is the clear winner, that could be a Pyrrhic victory as there will be too many competitors or Ethereum DApps will launch their own versions on Cosmos that eventually beat Mars.

2. Speaking as a former M&A lawyer, what I foresee in a hypercompetitive environment like this where the pace of overall innovation slows and players become indistinguishable from a feature perspective–is that some kind of merger/consolidation wave is inevitable. This can either happen by smaller DeFI protocols dying off because they are not viable in such a hypercompetitive landscape, or by DeFi protocols ‘merging’ in one sense or another (we’ve already had multiple protocol merger ideas floated in Cosmos, including merging Osmosis into the Cosmos Hub and OSMO into ATOM).

3. If Mars were to go with the Osmosis deal, then because Osmosis is a true appchain, I believe as Mars gets more and more deeply integrated with Osmosis, and given that the Osmosis community will own a lot of MARS and have revenue from Mars, a strong or likely option is an eventual Mars/Osmosis merger where all MARS gets swapped for OSMO at some reasonably attractive ratio and Mars ceases existing as a separate brand/dApp. To me, while we would not be forced to take this option, having it is a very good thing in light of the market dynamics I noted above–as bullish as I am on Mars, I also have to be realistic and acknowledge the strong possibility that it might not be forever viable as an independent DApp in a hypercompetitive landscape. But a merged Osmosis/Mars that has a way more unique value proposition as a deeply integrated, hypersovereign DeFi appchain would have a much more meaningful moat and a chance at remaining highly distinctive longer-term even in a world of fast-followers, DeFi incumbents and vampire attacks. Because Neutron is a general-purpose chain, a merger of Mars with Neutron is unlikely.

The AppChain Vision is a Better Bet for Mars, and Osmosis is a True AppChain

This is a little bit similar to the ‘DeFi competitive / merger good’ point so I’ll keep it brief, but, basically, the reason why Mars stayed committed to the Cosmos ecosystem after the Terra collapse is because we bought into the appchain vision. Appchains offer the possibility of a much more optimized, sovereign, autonomous, DeFi experience as compared to deploying smart contracts on a general-purpose chain. dYdX and Osmosis are the two pioneering leaders on this vision. We have learned, unfortunately, that having Mars as an appchain was much harder than we expected, but to me this does not mean we should abandon the appchain vision and morph into an Ethereum-style DeFi dApp–there are already too many of those, and they are bigger and have way more resources than us. We will probably lose that way in the long run–or at least have more limited success. Rather, we should stick with the appchain vision and try to create things that can only be done or best done on appchains. That way Mars will be truly unique. It’s just that since our own appchain did not work out, we should integrate deeply with Osmosis’ appchain to keep pursuing the same goals.

This is not to say that I don’t have doubts about the appchain thesis. Maybe Ethereum-style DeFi will always win, because it is more composable and so forth. But my point is–do we really need another Ethereum-style DeFi app? Or is it more interesting to try to create something unique, using the appchain thesis, and leveraging the Cosmos’ ecosystems truly unique/distinctive properties? I think it is a better bet to try to become the DeFi DApp in Cosmos that achieves the Cosmos appchain vision, because if we win like that, it is likely to be a much bigger and more sustainable win than being the top or one of the top Ethereum-style DApps in the Cosmos ecosystem.

Some Counterpoints/Doubts

That being said there are some counterpoints to the above, reasons why I could be wrong, doubts I have, etc.:

• The appchain thesis is still generally unproven, whereas the model of Ethereum style DeFi dApps composing together on a general-purpose credibly neutral chain is very proven. Neutron is a far better bet for pursuing that existing model.
• Neutron community could and sounds like they plan to integrate some chain-protocol-level changes Mars would need to optimize, meaning Neutron can also deliver somewhat of an appchain-like experience in its own right.
• If we take the Osmosis deal, there is no guarantee that we will ultimately merge with Osmosis, and if we don’t, Mars may be kind of fucked as it could have abandoned or failed to zealously pursue the Ethereum-style path of being an independent dApp.
• The Osmosis deal puts us much more at the mercy of the Osmosis community/devs/validators etc. than we would be at the mercy of the Neutron community/devs/validators if we take the Neutron deal. Again, this is the ‘dark side’ of being a guest app on an appchain–they can fail to truly make us first class, give us what we need, etc. to succeed and, worse, they can even give those same things to other dApps. On an appchain, a guest dApp is not competing on a level playing field–I think this would actually end up redounding to our favor if we take the deal as I trust the Osmosis community to treat Mars as first class, but “the grass is always greener,” things could change, and if Osmosis team/community decided to treat another competitive dApp better, Mars could be rekt. There is already an Umee/Osmosis integration proposal. OTOH, we can keep our Neutron and other outposts (Osmosis deal does not require exclusivity) and would still have those as a backup, so perhaps this risk is mitigated.
• Building on an appchain is much much harder than building on a general purpose chain. This makes it potentially slower to ship, with higher execution risks even after shipping.
• Neutron has incredible biz dev and because of that and all the other counterpoints noted, their biz dev could dramatically outpace Osmosis’ because there could be way more teams willing to build on credibly neutral ground than on a true appchain–a general purpose chain is more composable and more credibly neutral and is intrinsically designed to attract lots of DApps on it. This could mean that Neutron ultimately outcompetes Osmosis through network effects, TVL, etc., and if Mars is not the favored credit protocol on Neutron, merely having an outpost there may not be enough to fully harness this growth.

Finally, I would just like to reiterate that there is no bad option here. Neutron and Osmosis are both amazing, and Mars is very fortunate to have two strong communities looking build a deeper integration with Mars.

[simba]

I will echo much of the sentiment posted above - I see a great opportunity for Mars with both Osmosis and Neutron and the product vision remains the same regardless of where the governance hub is located.

The major difference between the proposals is the 3-month exclusivity. While 3 months is not a long time, and practically speaking it would be hard to deploy certain major new features (for example, perps) simultaneously across both chains, it does mean that Neutron will receive the focus for new product development.

The main question then becomes, what is the risk of always having to deploy first on Neutron with a 3 month delay before Osmosis?

For me, the main risk comes down to the opportunity cost related to user adoption. I am a big fan of Neutron’s vision as a permissionless DeFi hub and I have great respect for the team and the traction so far, but the fact remains that Neutron is a new ecosystem and does not have the same level of usage and mindshare as Osmosis at this time. This means that Mars is taking a greater risk with respect to user adoption through its requirement to always focus first on Neutron.

In the case of Osmosis, it has a solid history of attracting users and has shared a compelling vision for onboarding new users as Sunny presented at Cosmoverse. In the fast-moving market that we operate in, a 3 month delay can be highly disadvantageous depending on the level of activity that Osmosis may generate as we enter a new cycle.

Therefore, when I look at both options, I see the exclusivity as a constraint and the optionality of being able to focus new product development on whatever outpost makes the most sense at any given time as the compelling reason for me to vote for Osmosis.

[markwatney]

Agree with a lot of the points added above, but in general I think I weight the pros and cons differently which impacts what protocol I favour.

First, some context:

While Mars post Terra was focused on being some sort of ‘money market-as-a-service’ type product that serviced multiple chains, this has not really eventuated(for various reasons I won’t get into here). It seems more likely that the path to success for Mars is diving deep and optimising for a very high quality product that attracts users to that chain, rather than just becoming a product that users of that chain use.

Pros (Osmosis)

• Liquidity hub - Osmosis has seemingly won the liquidity hub. Generally in crypto the early winners continue to be very sticky, despite potentially better alternatives. Uniswap, Aave et al are good examples. Astroport is obviously the main competitor here and has made significant gains. While I am bullish Astro (and hold a decent bag), and think PCL is amazing, I think Osmosis will continue to be the dominant trading venue and liquidity hub for some time; the trading center for many cosmos natives, as well as the first port of call of many new entrants to the interchain.

• I think this brand recognition will lead to many people buying OSMO as some sort of ‘index’ token for Cosmos’ success. Both these factors will create a strong flywheel for mars, leading to increased liquidity and activity.

• Further ahead in the dev roadmap - both Mars and the primitives that we interact with are more mature technically on Osmosis. Astroport has only just launched PCL and Mars has not yet deployed v2, while on Osmosis CL, along with V2 and vaults already exist, to varying degrees of success.

Cons

• Potential Conflict - Osmosis seems to be building out a defi super app. Mars is building out a defi super app. While now we are starting from opposite ends of the super app spectrum I think we are going to converge and start to increasingly overlap. While Osmosis community + devs have shown nothing but support and dedication towards the success of Mars and have been a huge factor in any success it has had so far, this could change in a future where the profitability of mars negatively impacts the profit of the Osmosis protocol. If we both compete for the same pie and it seems we (mars) take market share - which leads to conflict. This would put Mars in a vulnerable position. Personally I think at least some level of conflict here is inevitable.

Pros (neutron)

• Neutrality - While Neutron may invest in the application layer on their platform (as you would expect) there is no direct product that they build. This means that unlike on Osmosis, there is no product that directly accrues value to Neutron, as is the case with osmosis (i.e swap fees going to osmosis holders). This means that while competition may arise, there is no incentive for Neutron to favour protocol a over protocol b, so long as they are driving demand for blockspace.

Cons (neutron)

• The unknown - Unknown issues are hard to price so to speak, but I think they garner significant weight. The biggest con for me with neutron is that it is largely unknown - they have f * ar less time live than osmosis, have less users, less liquidity - all these factors make it a bigger risk. The scalability of neutron and consumer chains in general is untested, and we don’t really know if they will attract the same or better level of crypto wide attention that osmosis has.
• Permissionless - This one might be controversial but in general I think permissionless chains are more susceptible to state bloat, congestion and other scalibility issues. Blockspace on a popular chain is scarce and blockchains are hard to scale. This is an issue for mars, as it effects users, liveness and safety. Personally I think the tradeoffs here are not great. Poorly optimized project launches or arbs grinding out a couple cents per tx can choke up a chain leading to issues for mars and its users.

Ultimately I think this decision comes down to how you weigh the different strengths and weaknesses.

Ultimately I prefer Osmosis, because I think its a higher probability of success and potentially giving up the advantage we won there could potentially be a mistake. Having said that I think that either option is great - both teams are great and I this we can be happy with whatever way the mars community votes.

[lex_node]

I don’t think this is the best move tbh…it would actually make me less bullish on Mars going with the Osmosis deal…I think Osmosis should be a bet on the appchain vision rather than just Mars on another neutral permissionless platform

[RoboMcGobo]

Also just to add here, Mars is whitelisted by gov to permissionlessly instantiate contracts on Osmosis already.

I know @redphone 's original point was that allowing for fully permissionless contracting is more in line with the ethos of decentralized finance, but I personally feel that governance-approved contract uploads are well in-line with the ethos of a decentralized protocol.

Permissionless deployments won’t help Mars (as they can already permissionlessly deploy contracts) whereas being fully permissionless may actually cause Mars further headache (see, e.g., the numerous liveness failures on Juno due to improper or malicious contract deployments)

[Winfred]

I’m not big into typing, but I shared my personal views here, it’s a 1.5 minute long video that explains how I personally intend to vote: https://x.com/winfredkmandela/status/1732484930922291291?s=46&t=vaxn5D934yrGU4i-RMv7zg

[Spaydh]

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.

Bitcoin Sage 🔴✦ | Delphi

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.

[lex_node]

Great post. Will think about all this.

[lex_node]

In light of Neutron’s removal of the exclusivity clause, Spaydh’s post above (clearly outlining how Neutron can achieve an appchain-like experience for Mars through chain-protocol integrations), and, most importantly, the clear preference of the most dedicated Mars builders to focus on moving the Mars Hub to Neutron, I now plan to vote for the Neutron proposal.

[Spaydh]

The proposal to the Neutron DAO has reached quorum and is expected to pass in roughly ~5 days with flying colors.