[Proposal #792][ACCEPTED] Launch Neutron on Replicated Security

image 1920×1080 80.7 KB Change log • 2023-03-21 Created initial post • 2023-03-30 Added provisional report from Informal Systems • 2023-04-05 Economics and timeline update • 2023-04-20 Last call: Added final report, soft opt-out, downtime window and cleaned up technical requirement section Summary Proposal 72 passed in July 2022, providing support and $ATOM funding to the development of Neutron, a DeFi Hub and permission-less CosmWasm execution layer to be launched on Cosmos Hub as a consumer chain. Neutron’s initial development is now complete: all core modules have been implemented, audited, and successfully run on testnet (`Quark`, `Game of Chains`, `Baryon`, `Rehearsal`, `Meson`, `Pion` and others). Through bleeding-edge Interchain Transaction and Interchain Queries modules, Neutron is now ready to bring truly interoperable smart-contracts to the Cosmos Hub. This document provides detailed information about Neutron and its future relationship to the Hub, and proposes to launch Neutron as a consumer chain using replicated security. It also incorporate community feedback in the form of a soft opt-out feature for the bottom 5% validators, an extended…

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yeah, sounds great. Nice job to your team, Neutron was very expected, soon it will be live. See you to the launch period !!

Excited for this and looking forward to seeing additional information once the final audit report is completed.

One question, how exactly are you handling both NTRN and ATOM being fee tokens? Not familiar w/ how a chain using the cosmos-sdk would handle this.

Thanks!

Lets go. Yes from Citizen Cosmos

Will there be any inflation associated with staking that will go towards Cosmos Hub?

Using the 25% value presented, combined with tx fees and MEV income on Osmosis, this seems like annualised apr won’t even reach 0.001% for Neutron (if it was the size of Osmosis). When you further consider that validators only get a small percentage of that income, Neutron is just burning a bigger hole for Cosmos Hub validators.

Huge fan of Neutron. 100% onboard!

Couple of questions about token economics & governance:

• Payment to ATOM holders & validators: transaction fees alone are terribly low as @Orageux101 has mentioned. MEV is still very early in Cosmos. Have you done any modeling as to what the expected revenue is on Neutron that you can share?
• Is there any information about the token emission schedule available yet? If not, will this be shared prior to this proposal going on-chain?
• Who wields governance power on Neutron? ATOM holders or NTRN holders? Does this apply to upgrades as well?

Very excited about this!! Congrats on getting this draft out

I can not scale the cost of Neutron’s ICS but I also am having hard time understanding what the NTRN token really brings.

1. Is Neutron mainly relying on smart contracts being built and used to generate transactions ?
   (on top of MEV and regular wallet transactions)

2. Let’s say $ATOM is used for one transaction fee, will the revenu (from being a security provider) be NTRN or ATOM ?

LFG! Full support from Polkachu and its army of interns!

Good question! From a high level, validators can set which denominations they accept as gas. In Neutron’s case, we’ll be recommending both uNTRN and uATOM. Wallets such as Keplr already allow advanced users to select which denominations to pay gas fees in. Neutron’s tx fee collector and distribution modules are both capable of handling multiple denominations. uNTRN is treated slightly differently since, in the current design, uNTRN fees that aren’t sent to the Hub are burnt. Other denominations are simply split, 25% goes to the Hub, the rest goes to the Neutron DAO’s Treasury.

In the current design, the NTRN supply does not inflate at all. Beyond tx fees and mev, there are multiple ways consumer chains can drive value to the Hub. If ATOM is ~1.45% more valuable because of the existence of Neutron, then the whole validator set is breaking even or in profits, and delegators get that amount as pure profits, before even counting fees and/or mev.

Hey Noam, good questions!

1. Transaction fees are low in parts because the minimum fees are set very low on numerous chains. Using 0.05$-0.1$ as the average tx fee range, our models shows annual revenue ranging from $2m to $20m depending on the comparables used (Evmos, Juno, Osmosis, Terra).
2. Not yet, but this information should definitely be out before the proposal goes on-chain.
3. NTRN holders, it applies to upgrades as well. ATOM governance has the power to shut down the chain, so governance decision on Neutron that directly and negatively impact the Hub are unlikely.

1. Neutron is a platform: if no-one uses it or builds on top of it, its value will be zero, and the Hub can cut its losses but shutting it down. If it is successful, it will host a thriving ecosystem of applications that users interact with because they benefit from their product and services. The interactions between these participants is what generate revenue for Neutron and the hub.
2. In the initial model, transaction fees aren’t swapped, so the ratio of assets making up the transaction fees depend on what users prefer to pay fees in. If I pay fees in ATOM, the Hub gets ATOM, and vice versa.

That’s what I was dreading. I was hearing Neutron here and there without giving it too much attention.

I do believe this is much needed in the ecosystem but since it’s firstly targeted to devs (until Smart Contracts are done and used), I hardly see a smooth and fast transition to virtuous economy.

Will the platform, perhaps X first smart contracts perhaps reaching X number of use, be incentive to bring traction to that gigantic gear?

EDIT: Insanely clean and clear prop btw with my question answered I think I can vote with total understanding.

Where do the other 75% fees and MEV revenue accrue?

Great write up and happy to see the answers given, to some great community questions. Absolute yes vote!

Full support! Very excited to see this get passed.

This proposal is concise, yet detailed and clearly has been well thought out from the beginning. A breath of fresh air . The symbiotic partnership between the Hub and Neutron is surely a very interesting development in regards to advancing how the cosmos is shaped. Let’s make ATOM >~1.45% more valuable!

Excellent…full support

How will the remaining 75% of transaction fees and MEV revenue be distributed? It Goes to NTRN holders?

The whole cosmos community was looking forward to onboarding Neutron, I support this proposal. But, there are a few things that should be well explained in the discussion period, so we all can take an informed decision. 1- Neutron: the genesis state attached to this proposal will contain an allocation to the Cosmos Hub’s validators and delegators. When the ICS prop went live on the Hub, there was this considerable discussion of validator funding, and how half of the validators are running at a loss. I am glad you have mentioned both validators and delegators but some numbers would be more appreciated during the discussion phase. 2- Neutron: An initial security agreement between Neutron and the Hub was set by Proposal 72 : in exchange for providing security to Neutron, the Hub would receive 25% of its transaction fees . To better align incentives, Neutron proposes to also share 25% of its MEV revenue : It was clearly mentioned in the ICS proposal that the Community should expect 25% of the Fees generated only if the Consumer chain dose does not have its own native coin. While With Neutron, the native token NTRN is present so there should…

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LFG! Can’t Wait.

Sounds great! Can’t wait for $NTRN

LFG to the team, congrats !!

Concerning transaction fees :

• do you have an adoption table that forecast amount of fees depending of the usage compared to other blockchains.
• Is the 75% left of the MEV revenue and fees for the Community pool, team or users ?

Very excited about this

The remaining 75% accrue to the token and network Treasury (the Neutron equivalent of the community pool).
@carrot @Rakesh_sj @mr.hyunh

1. As the proposal mentions, further information will be provided as soon as possible.
2. I don’t remember any such requirement being voted on. Requiring consumer chains to have inflation weakens the value proposition of Replicated Security and is not desirable in my opinion. Neutron’s design doesn’t feature inflation, but it includes an allocation to the hub that grows over time since the hub is the only community to continuously receive NTRN tokens via tx fee and mev staking rewards (the rest is burnt). In my opinion, a growing share of a deflationary asset is more valuable that a stable or decreasing share of an inflationary asset.

Thanks for the answers Spaydh! Looking forward to reading more about the economics!

@waqarmmirza and @Spaydh - some governance archival work for you guys I’m wondering if this is the idea being referenced (this is from the text of Proposal #72 ) (emphasis mine). Key Attributes of a Consumer Chain • Majority of gas fees go to developer DAO: On this type of consumer chain, gas fees are paid in Atoms. For example, 25% of the gas fees are sent to the Cosmos Hub validators and delegators for securing the chain, and the remaining 75% go to a DAO supporting the development of the consumer chain. I don’t think this was intended as a ‘requirement’ of consumer chains so much as a speculation about what a consumer chain might be, so that people had the context to vote on an ICS-related proposal before many of the core features had been designed or developed (May 2022). There was also something in the appendix text of Proposal #187 : How should validators think about revenues and costs? There are multiple ways a consumer chain could remunerate the Cosmos Hub validators: • Transaction fees: By default, 25% of the consumer chain fees will be distributed to the provider chain. This number can be set differently for each consumer chain. Note that…

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Thank you once again, @lexa. I had actually mistaken the FAQ section for a part of the proposal(Although I think this is some sort of commitment, this is only me). I do appreciate their good intentions and the generous sharing model they have proposed.

Regarding the Whole ICS discussion, it seems that adding more utility for ATOM and the entire ecosystem was a priority. While a one-time major payment of NTRN with subsequent fees may not be as suitable, a continuous airdrop would be more appropriate.

But I will wait for their genesis allocation details, for further comments.

Fully support neutron!
and I have a question about Replicated Security. Should the inactive validator also running the consumer chain such as neutron? to ready for when the validator go to active from inactive status.?

Are you planning on building a DEX on Neutron yourself or would this not be part of the Neutron team but others building on top of Neutron?

GATA DAO Support this proposal to onboard Neutron, Waiting for details on genesis allocation.

still can not find token distribution info, any update on this?

Thanks for the answer. Any details you can share on how fees will accrue to tokenholders? Will tokenholders have to stake/LP and claim fee rewards or will there be some kind of rebasing model?

Token Allocation Amounts and Method Hey! Can you clarify what you mean by token distribution info? Do you mean • how exactly the tokens will be paid out to ATOM holders? • what quantity of tokens will be paid out? For 1 (for ATOM stakers), tokens will accumulate in the same way that ATOM rewards do, and then delegators / validators just need to claim them, just like claiming normal staking rewards. For 2, the proposal has this: Neutron: An initial security agreement between Neutron and the Hub was set by Proposal 72 : in exchange for providing security to Neutron, the Hub would receive 25% of its transaction fees . To better align incentives, Neutron proposes to also share 25% of its MEV revenue : • Transactions fees: Transactions fees protect the network from spams and can be paid in ATOM or NTRN. Native USDC may be added shortly after launch. Transaction fee revenue scales with user and application adoption. • MEV revenue: Neutron will be running on a version of tendermint that features a blockspace auction, enabling searchers to bid for specific bundles to be included by block producers at the top of Neutron’s blocks. MEV revenue scale with…

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sorry, might be a bit confusing

actually meant for Neutron token distribution/allocation (community, founders, airdrops etc)

they’re releasing it before the prop goes up for vote. This is the first draft of the prop and the token allocation will be public shortly (probably next 1-2 weeks).

Excellent proposal. Well done Neutron team, congrats on making it here. The importance of this section from the problem statement can’t be understated: Neutron: • The economic security of Cosmos smart-contract platforms is low, increasing risk for TVL-intensive applications and bottlenecking growth. Unlike most new L1s, Neutron launches with clear product market fit from the jump: give developers and protocols from other ecosystems a smart contract platform to build on that can leverage all of Cosmos’s unique cross-chain infrastructure (ICT, ICQ, IBC, etc) without needing to bootstrap their own appchain validator set and worry about long-term L1 economic sustainability. There’s already proof points for this need: blue chip Ethereum protocols (like Lido) already have research posts on their gov forums that highlight the value in leveraging Neutron to expand into the Cosmos ecosystem. So not only does Neutron unlock the design space for the types of cross-chain applications to be built (interchain money market, interchain “quantum” DEX) but it also gives the sidelined power dapps outside of Cosmos ecosystem a way to get into the interchain without…

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The relaxed slashing/jailing requirements for consumer chains for now means that validators should have enough time to spin up their consumer chain nodes without too much risk of getting jailed for missed blocks. Still, if your validator is close to getting into the active set, you should definitely be monitoring its status

We built the platform so that others can build applications like DEXes easily and securely
In the early days of the network, we may contribute to the development of a few applications which we think will be critical value-adds, but in general, we expect other teams to build applications on Neutron

validators should have enough time to spin up their consumer chain nodes

can you elaborate on that please. Once 2/3 are running, how much time does the rest have? Is it a few hours, days, a week?

My first post on the forum, if that’s not hype! I would vote yes and I give my full support to this project and its vision.

However, I have a small question regarding the Neutron model. When I read the idea, I immediately think of Juno and its failures. Not everyone may share my opinion, but I tend to believe that one of Juno’s problems is the lack of quality applications and, on the contrary, the proliferation of poor quality applications which, taken as a whole, give a bad image of this network (I skip over governance).

In the end, aren’t you afraid of undergoing the same pattern?

Do you have a plan to attract developers and qualitative applications that could really drive value on the network? Can you tell me more about this.

Thank you for your work, I’m really enthusiastic

Congratulations Neutron team.

Like others have said, I to see details of the initial Neutron distribution as this will likely be more important economically than revenue in the early days.

I think Neutron brings fantastic opportunities to the hub and this is a hugely exciting moment.

@jtremback how many blocks will it take before a validator is jailed pls?

That’s a fair concern, and I cannot give you guarantees: at the end of the day, it will be up to the respective protocol’s governance and to the Neutron DAO to strike the right agreements to build a very strong ecosystem.

What I can say is we’re in touch with a lot of really strong teams that are excited to build on Neutron. We are excited to help them make proposal to their respective DAOs and to Neutron’s, as many of them have strong products which we think would perfectly complement Neutron’s thesis.

There’s also a lot of work to be done on the education/onboarding front. We’re looking forward to joining hackathons and organizing workshops, to showcase Neutron’s infrastructure and help good teams leverage it. We’re in touch with great training program that are interested in teaching about Neutron’s technology.

It’s impossible to predict that a network will be successful, but I’m personally very enthusiastic about Neutron’s future. I think it has all the chances to grow a strong ecosystem of DeFi dApps.

Thank you for your reply. I have no doubt that neutron will succeed. Count on me to talk about the product whenever I can!

what will be the ticker of the token? NTRN ?

Can i ask where you get this 1.45% number from?

Validstors at thr bottom set currently make ~3000 dollars a year. Thats just enough to run a simple node+backup system. So a lot more than 1.45% is needed to get these people from loss making by adding another chain.

Yep, it was picked by the community back in the days

Thank you for the proposal. It’s very thorough with good details.

Neutron:

DeFi applications struggle to compete with high staking rewards, and suffer from shallow liquidity.

I found this statement in the Problem Statement part. What do you think could be the solution from Neutron to help those DeFi apps?

Tessellated is fully supportive and excited to see this launch!

hi, any update on this?

what will be the precision of the NTRN token? same as ATOM, 6?

@Spaydh thanks for all your answers!
Another question regarding the ticker “NTRN”. On coinmarketcap is already one called NTRN but it’s not this Neutron. Do you plan to call yours aNTRN or something or keep it with NTRN?

what will be the precision of the NTRN token? same as ATOM, 6?

Yes, 6, same as ATOM.

On coinmarketcap is already one called NTRN but it’s not this Neutron.

Websites such as Coinmarketcap and Coingecko allow multiple tokens with the same tickers to be presented so I don’t think that would be an issue at all. Case in point, someone already successfully registered NTRN on Coingecko

Hello @Spaydh !

Seeing that Quasar (congratulations to them on the launch!) is experiencing some relay issues in managing the flow from ICA and ICQ (if i’ve understood well), due to a certain success, a question arises: How do you anticipate a potential high demand at launch in this area? Have you already established partnerships in terms of IBC relays that are likely to support the load?
Thank you!

hey (:

no doubt about P2P’s skills and quality of their infra.

seing this tweet

valeyo 🛰️

i also wonder if you work hand to hand with StrangeLove to optimise the relayer software/take some experience from them regarding the new kind of “loads” the relayers have to deal with.

Anyways thanks for your answers. And good luck with the next steps. (:

@Spaydh can you answer this question?

I could be wrong, but here are some back-of-the-napkin numbers Im seeing:

Validator #175 has ~86000 ATOM. Lets assume 5% commission and current 16% inflation @ $11.5/ATOM (current price)

Validator Revenue = ~$8k/yr

The minimum cost to run a validator is ~$400/monthly today.

Validator Cost = ~$4800/yr

Now Hub validators will have to run 2 of these systems ($9600/yr)

To break even, a validator would have to bring in $9600/yr.

Using the same input parameters (86k ATOM, 5% commission, 16% inflation), ATOM would need to be $13.80 (or a ~20% increase from current price) for validators to break even.

The commission rate for the bottom validators changes this number drastically.

For example - I used 5% commission, but they actually have 8% commission and are actually profitable as long as ATOM is at least $8.6 (a 25% decrease from current price).

Ultimately if validators in the bottom tier are losing money, they either need to increase commissions (some currently have 0.5% commission and wouldn’t be profitable until $130 ATOM), or make a business decision to drop out.

The 1.45% increase might’ve been an aggregate average of the bottom quartile validators. In either case, I think we can all agree that Replicated Security, and Neutron, should make ATOM more valuable and make 99.999% of active set validators whole

We’ve worked closely with Strangelove in the past, your suggestion is welcome, I’ll get in touch with them to learn from their experience with Quasar. Thanks Tom

Sorry I missed your question initially, fortunately Effort cap just answered it
Another way to see it is as a “compensation budget for the hub”. At $400 base cost per node per validator per month, that’s roughly $840 000 to be distributed across the set yearly. +1.5% increase in ATOM price also corresponds to the increase in aggregate earnings that would be required to finance that compensation budget.

Hi @Spaydh the downtime period can currently be set individually per consumer chain, but we are recommending 30,000 blocks, like Osmosis has. This should be a little less than 3 days, which is 3 times longer than the Hub itself.

We’ll get you a full set of recommended parameters for launch soon.

is there a different way to reduce the global cost to run a validator ?

I believe NTRN is only a governance token.

We very much appreciated the Twitter spaces the other day. It answered our questions and we are excited.

machines can get cheaper over time, but $400 is pretty bare bones.

Really cool!

POSTHUMAN will support it!

I cant say i subscribe to that reasoning as that considers the ATOM validator set to be a centralized clump, i was thinking more in line of @effortcapital calculation. Assumed here however is that Neutron will increase the price of ATOM and seeing as there is close to 0 value accrual back to the hub (as TX fees aren’t material and the percentage is low) i dont see why this would be true at all. We know already from other chains (for ex GRAV) that TVL is not a guiding factor in increasing the MC and economic security of a chain so dont see how that story would be different from the hub/Neutron. To me it is clear that this proposal is a step towards freeloading on 175 Infrastructure providers by giving them crumbs merely on the hype of ICS and not actually benefiting ATOM long term at all. This added complexity and economic strain will have centralizing effects on the Cosmos Hub and there doesnt seem to be a clear benefit to weigh of against that negative. So to summarise my points: • There is little to no economic value accrual back to Atom Stakers and therefore infrastructure providers of the Hub for launching Neutron. • Value accrual due to Economic security request…

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Like, how do you know? What calculations or metrics are you using to determine that things are going to happen as you say they are, especially as this is the first time ICS is being used?

I think you’re missing the purpose of the type of service Replicated Security is.

As a bootstrapping mechanism for new chains, while the Hub may be getting little revenue at first, if Neutron (and other consumer chains) are successful, MEV revenue + tx fees + ATOM becoming the dominant currency of these ecosystems can bring tremendous value to the validators and delegators.

It’s like a young startup being asked by their VCs to be profitable on day 1 or else they won’t invest in their business…that’s mostly not possible, especially in this industry.

Obviously everyone is allowed to vote how they want, but I recommend all validators wait at least 1yr to gather data and see how successful Neutron (and others) will be until we kill off the only potential avenue for value accrual for the Hub at this current time.

The proposal has been updated to include the provisional report for the audit of Neutron’s codebase by Informal Systems, which can also be found below. This report covers the following tasks: • Audit of Neutron’s custom modules and application source code • Audit of the Neutron SDK, a set of CosmWasm bindings intended to be used by smart-contracts to interact with other blockchains through Neutron’s custom modules • Audit of the Neutron DAO, a set of governance and tokenomics smart-contracts • Audit of the WasmD fork adapted to meet the specific needs of the Neutron blockchain The report concludes that “the Neutron design and security model in general is very well though out. Despite the general high quality, [Informal Systems] found some details that should be addressed to raise the quality of the code. One Critical Severity and one High Severity issues were found during this audit; the rest were marked as Low or Informational.” The vulnerabilities identified in this report have since all been fixed and reviewed by Informal System. They will appear in the final version of this report. To ensure the highest degree of security, the thorough auditing of Neutron’s…

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I dont think i am at all missing the purpose of replicated security at all. Chains dont have to be profitable at all, they can then still pay infra providers.

The revenue proposed here with current numbers i see on other chains doesnt seem significant enough to support any lower tiered validator. I think this is a real decentralisation risk to the hub and think we should be honest about that.

All for supporting startups, but they can think of a way to support the infrastructure providers that give them that platform. An airdrop to stakers or minimal fees does not do that.

I think on the contrary we’ve been very mindful of potential centralization risks and the livelihood of infrastructure providers:

1. We kickstarted the research and conversations around the sustainability of ICS with Informal, Hypha and other core teams of the Cosmos Hub
2. We openly discussed the potential issues as well as short and long term remedy in our publications and on Spaces
3. We are testing out a soft opt-out feature that would allow the bottom x% of the voting power to opt-out of running a consumer chain while preserving its economic security. The validators would bear no additional cost and still get their rewards. It hasn’t been included in the proposal so far because it hasn’t been tested out in production-like conditions, which we’re planning to address on testnet next week.
4. We kickstarted conversations on how to improve the stake distribution and design alternative revenue distribution models which would allow Replicated Security to scale much faster while preserving the financial stability of the validator set.

@Ertemann hey, could you please share here the solutions you would recommend, if any, to address the problems you mentioned?

The growth of the ATOM economic zone Hey @Ertemann . I think you raise some really important points. I’ll respond to them with my own thoughts, and also mention briefly the work that Neutron and core teams are doing to mitigate the centralisation risks you mentioned above. This is primarily in response to Ertemann: So to summarise my points: • There is little to no economic value accrual back to Atom Stakers and therefore infrastructure providers of the Hub for launching Neutron. • Value accrual due to Economic security request is not a proven metric and there is no way to correlate Atom price to usage and success of Neutron • Increase in infrastructure complexity will already have a centralising effort on the hub validator set TL;DR • Consumer chains will take time to become profitable. They need time to prove themselves. • Picking winners is less likely to be effective than off-boarding losers. • The ATOM economic zone will have emeregent qualities, we cannot predict the Interchain relationships in it. • More chains (that have strong teams behind them and provide strong use case) in the zone means more potential for synergies to develop…

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Being mindfull is different though of the design showcased here in the draft. With all due respect, intentions dont matter, the final proposal does.

We are requested to provide feedback on the current proposal and that does NOT include either opt-out mechanisms or alternative revenue distribution mechanisms as you propose here in point 3/4.

To come back to the question of @tom , what is a potential solution? → Inflation.

This mechanic has been a core part of Cosmos stake incentivisation from the start and even the Hub still follows it. It will instantly resolve any of the economic disincentives for infrastructure providers. Alternatively Neutron can look into airdropping or paying validators (similar to Kujira) or forcing revenue splitting (like for ex Stride) - chains that both run without inflation but with proper incentives for stakers and validators.

Definitely yes! We are super excited about the first consumer chain using replicated security - Neutron

Looking forward to the official launch!

Opt-out mechanism is a very bad precedent for Replicated Security.

If you opt-out of validating for consumer chains, why should you continue to receive a security subsidy for validating the Hub when the entire purpose of the Hub was to become a security provider for consumer chains?

The more the validators lean on inflation, the worse off ATOM is.

Validating is not a public good; it is a business. If you believe in the long-term vision of the ATOM and the economic zone, then unfortunately, there is a risk all validators must take that they may operate at a loss in the interim.

We can’t expect Neutron and other consumer chains to make validators/stakers whole at inception and even if Neutron gives 100% of fees to validators for 1yr, it likely won’t change the economics of RS in the short-term.

ATOM price appreciation alone drastically changes the validating economics, and the more we rely on inflation the worse price appreciation we can expect (in my opinion).

I personally believe the centralizing forces of RS is drastically overstated.

We can fix stake distribution through more liquid staking and simple improvements in wallet UI.

Inflation cannot be the answer.

Hi everybody just very briefly, I want to say that on a personal level I trust the neutron team and I very frequently make decisions based on personal trust, but this one is not even solely based on personal trust.

They had the guts to go first. So to me this means a couple of things:

• I don’t need to understand the economic model because I don’t think anybody does

• If the proposal is sane (it is) and the code doesn’t have crazy hidden slashing functions that attack the hubs validators (it doesn’t) then I’m voting yes

Do I think that ICS will be in its ideal form at launch? Hell no. We’re going to grind on that thing for years. We’re going to improve it, we’re going to make it better, we’re going to make it easier, and we’re going to figure out how to model economies around it. The thing is that in order to do that stuff, well we need to start doing stuff, and neutron stood up and volunteered to be the first, if our organization never makes a penny on it, but neutron leads to the community figuring out how to model RS/ ICS economies every single penny of the $500,000 was well spent, as well as every minute of every validator and community members time on neutron.

I am sorry but I think your arguments are not consistent with your own actions: • You want to tell people that it is not economical to provide RS, but you validate multiple chains (including meme chains), somehow you think this is economically viable and totally fine, but not RS. ALmost every validator validates multiple chains, so people obviously think the risk reward is beneficial. • There are already plenty of videos about the economics of RS, watch the Cryptocito video about, they did the math and almost every validator made enough money, so the additional costs shouldn’t be a problem. As far as I remember they even talked about additional measures for the smaller validators. • The validators of the hub already made a shit ton of money, even if hub validators would lose money, they made more than enough before. • One key aspect of RS is that the consumer chains can experiment with their tokenomics, they can use new/unconventional mechanisms to attract additional users/volume etc., shutting this down before we even know how this will play out is absolutely unreasonable in my opinion • Small validators should speak for themselves, it’s the same as whales shouldn’t speak…

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where can I find information on NTRN token allocation, distribution, vesting, etc.?

Neutron:

Hardware requirements:

• 4 Cores
• 32 GB RAM
• 2x512 GB SSD

Baryon has a block time of < 3 seconds. It seems unlikely one can reliably run Neutron on SSD. BTW, why 2x512 GB SSD? Raid 0? Raid 1?

Additionally, Soi lists different [HW requirements in Discord] (2x RAM, 4x CPU) (Discord) on March 10th:

image712×427 39.8 KB

Please clarify.

Wunderbernd: I am sorry but I think your arguments are not consistent with your own actions: Regarding point #5 , quite the opposite, when a larger member of the ecosystem speaks on behalf of smaller members, the incentive is clearly the health of the ecosystem (which needs the smaller players) and of a more altruistic nature. @etermann has made it clear why they are able to afford running smaller chains which are not profitable: “So although larger validators like us are not scared by the increase in complexity and smaller margins we think the current proposal will have a larger impact on the Hub decentralisation than can be expected of an economically viable ICS chain.” (bolding by me) To point out that they do validate on smaller unprofitable chains (your point #1 ) is irrelevant in this context. Maybe they do it to be good members of the ecosystem? To give their investors more chains to stake on w/o going to another provider/operator? Or maybe they can afford to do it because their infra is so efficiently managed that the cost of adding a new chain is nearly negligible (yes that is possible)? Also, your point #3 seems to forget that not all validators have made…

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Spaydh:

We are testing out a soft opt-out feature that would allow the bottom x% of the voting power to opt-out of running a consumer chain while preserving its economic security. The validators would bear no additional cost and still get their rewards. It hasn’t been included in the proposal so far because it hasn’t been tested out in production-like conditions, which we’re planning to address on testnet next week.

This would be excellent if it hits the testnet by the coming week, do you see this feature going live with the Neutron launch?

Yes, more information will be released on this shortly but our engineering team and Hypha’s are working closely together to ensure the feature is tested both internally and in public testnet conditions so that, if proven safe and satisfactory, it may be included in the mainnet release.

The proposal has been updated to contain the latest information on the launch process, including the specific allocations to the hub, an updated timeline and technical requirements. This update builds upon the changelog to provide more context around the following changes: • NTRN Allocation to the Cosmos Hub • Release of additional features and final version of Neutron • Proposed fixes to the economic constraints of ICS for validators • Updated Launch Timeline Initial NTRN Allocation Neutron’s NTRN Economics have been released. This update will highlight some of the information contained in the article, which can be found in full here: https://blog.neutron.org/ntrn-economics-dcb520e2a776 The initial supply for NTRN is 1,000,000,000 and inflation is set to 0. The initial token allocations can be seen in the graph below. They include a detailed breakdown of the NTRN airdrop: • 70,000,000 NTRN Tokens (7% of the total supply, 58,3% of the initial circulating supply) will be distributed to the Cosmos Hub community as part of Genesis: • 40,000,000 NTRN Tokens (4% of the total supply) will be distributed to account with more than 1 ATOM staked on Block #12900000…

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hi, thanks for the update on tokenomics.
I understand why you would want to exclude CEXes from the airdrop but in the case of Consumer Chains I’d argue you should also consider that there is no opt-out for them. I do not think it’s fair to force them validating your chain and then not reimbursing them and their clients with the airdrop.
Thus, I ask you to reconsider it with also considering this angle.

I guess I’ll be the first to bring up US exclusion from Neutron. Everyone was ready and raring for Neutron, everyone was looking forward to it and to find US residents so thoroughly cut out of the ecosystem is seriously disappointing. As far as I know, No Cosmos project has attracted US regulation or lawsuit and to pre-emptively cut off this portion of the community seems counterproductive and somewhat dangerous.

Screenshot 2023-04-05 8.58.25 AM819×998 161 KB

U.S. citizens aren’t blocked from Neutron, the exclusion applies to the token. Anyone can use the platform, gas fees can be paid in other currencies including ATOM.

From what was said, I don’t think the spirit of the Disclaimer is one of inclusion. But let’s say we can use atoms to pay fees. Can we use atoms to vote in any governance proposals? How about buying NTRN for liquidity pools? How about LSD? Again, I don’t feel the love…

Neutron needs to protect itself regarding its initial tokens share. it’s fair.

what users are doing after that genesis’ emission is a different story.

It’s not just the initial token share though.

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i guess they have a legal team. they don’t do that for fun or because shady conspiracies. are you really aware of what’s happening in the US ?
a serious and long term focused project just can’t ignore this kind of potential legal “attack” vectors.

but i’m going to let them answer.

what i’m sure of is if they could be open (regarding NTRN tokens) to the whole world, they would.

I have 1000 ATOM staked before #12900000 (2022–11–19)，but now I redelegate my ATOM to a new validator which becomes an active validator in 2023, can I get my airdrop?

Incorporating pertinent Community feedback, the following adjustment has been made to the NTRN airdrop: tokens left unclaimed after 3 months may be permissionlessly transferred to the Cosmos Hub community pool.

This is overall a good change to send unclaimed tokens to the community pool. Regarding the US residents on token claiming: I think it’s a wise decision, we have to consider how aggressive SEC has been at targeting small protocols. Last thing we want is that kind of attention to cosmos ecosystem. I don’t think Neutron or any protocol is happy with such difficult decisions but we have to put thing in a neutral perspective here.

@Spaydh @Neutron please kind sirs. I cannot follow the motivation to exclude them. Please elaborate and reconsider. What have they done to you?
If it’s because of decentralization, then why just blocking CEXes and not also infrastructure providers that may run a multitude of validators? Why don’t you offer an opt-out for them then from the start off?
Don’t CEXes bring in institutionals and retail customers alike? Kind of like a marketing campaign? How come you exclude them?

Suspect the Neutron team won’t want to talk too much about Gary and the SEC but considering the landscape right now I am not surprised they are being cautious. I understand why it is frustrating to individuals but that is more the fault of their government than Neutron.

The good news is that those tokens that can’t be claimed will go the ATOM community pool and anyone can use the dapps on Neutron using ATOM.

I urge everyone looking into the tokenomics to take a long on a longer time frames rather than being discouraged because of then trying to navigate restrictive regulations.

I was surprised to see delegators to centralized exchanges and custodians excluded from the airdrop. What is the rationale behind this choice? It is clear that the reason is not: (i) centralization per se, as centralized staking providers are in, or (iI) incentivizing a stake redistribution towards smaller validators, as we have one excluded validator with a voting power as low as 0.05% As the airdrop aims to reward the “Community”, I can imagine that you want to exclude entities who didn’t use their voting power. That would help me understanding why do you draw a line between centralized staking providers and exchanges (I am not sure if there are exceptions here but the trend is clear). However, you have already a distinction here for the 30 million NTRN reserved to who voted on Prop 72. It seems excessive to me to use practically the same rationale to exclude exchanges (and their delegators!) also for the remaining part of the airdrop. It seems a bit unfair to me to discriminate delegators relying on exchanges for staking their ATOM as if they were not part of the community at all. It is true they do not contribute on governance, but I am not sure that’s enough to…

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First I’m not USA Citizenship and i’m not live in USA. Hope don’t ban to USA citizens to claim there airdrop because USA citizens are big part of our Comos Hub community and maximum Usa Atom staker are stake big amounts of Atom for long time. Second Do rektdrop everyone who eligible get same amount of token. So whale staker are not manipulated token price because everyone get same amount token. If Neutron not able to do rektdrop for Atom stakers so do Rektdrop for proposal #72 voter who vote proposal everyone get same amount token. Last Don’t Give vesting period for airdrop token unlocked 100℅ of token when claim is live and when claim period is end unclaimed token claw back to community fund.

Bro_n_Bro:

sorry, might be a bit confusing

sorry, might be a bit confusing its a great project but we user waiting for neutron airdrop and i want that you should give us a rekthdrop and i would be great thing ever in crypto history

The way i see it $NTRN has not a economically feasible tokonomics for the infrastructure providers. We can revise it in the future? Yes. Because we have to test the modal first.

I also realize, it is not what we have expected but we have to start from somewhere.

Totally fine with me, this is how governance works, if people are not happy with the decision they can move with their money

Neutron’s token launch plan is well-designed and balances the risk early stakeholders are taking with the opportunity for anyone to accumulate ownership and voting power over time. ATOM holders will subsidize the security, taking a risk on Neutron’s success, so it makes sense to focus on their support in the proposal. • Removing CEXs: Discouraging centralized pooling of assets is not a bad thing. There have been lots of exchange issues over the past year, and anyone should be able to delegate to high-quality infrastructure without pooling. Not having control over your coins can lead to major headaches if tokens end up in the wrong hands due to exchange hacks or bankruptcy. • Focusing on ex-US: Unfortunately, the present regulatory climate makes it necessary to focus on ex-US users. It’s important to contact your representatives and ask them to be more supportive of innovation and opportunity in crypto. • Ownership: Investor plus team ownership at 34% is in line with Stargate and materially better than the recent Arbitrum plans of 44.5%. The team will not have voting power for a year and then only partial voting power through a 3-year unlock, which is notable compared to…

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Great job @Neutron in the initial proposal plus updating the proposal. Two suggestions: 1. Grace Period for opt-out validators in bottom 5% Neutron: Releases patched to include a “soft opt-out” feature will be launched and tested as part of the internal and public rehearsal described in the timeline below. This feature would allow the bottom 5% of validators by voting power (74 validators at the time of writing) to be free of any penalty for “opting-out” of running nodes for the Neutron network. These validators would still be considered part of Neutron’s validator set and earn a small share of the staking rewards but would not be jailed nor slashed for downtime. Great job here as the economics of staking is key to longer-term sustainability. If we didn’t put this clause into the scope, then it would be economically deteriorating, compounded over time, for the node operators who hasn’t earned enough just yet. Meanwhile, here’s an edge case to consider – when a whale delegator (maybe ICF delegates a huge sum to a few bottom 5% operators), is there a grace period for them to 1) realize the windfall, 2) understand Neutron, 3) start the Neutron chain and catch…

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Neutron:

|Public Rehearsal: All Cosmos Hub validators are invited to rehearse the possible launch of Neutron on Replicated Security by deploying the finalized binary on the Replicated Security testnet. The stability of the soft-opt out configuration is assessed in production-like conditions.|
||

So as validators, we shall receive email regarding this? Or where should we keep track?

@ckxpress Information on this is in the Cosmos Network Discord ( Cosmos Network ) in the #replicated-security channel and ICS announcements channel. Feel free to DM me on Discord (`Lexa Michaelides#1481`) to get the Replicated Security role and stay in the loop. @jacksteroo Meanwhile, here’s an edge case to consider – when a whale delegator (maybe ICF delegates a huge sum to a few bottom 5% operators), is there a grace period for them to 1) realize the windfall, 2) understand Neutron, 3) start the Neutron chain and catch up … like maybe a couple of weeks? I’d recommend that all validators participate in the Replicated Security testnet so that they already know about Neutron and are familiar with the technology if and when they rise up in the set. The downtime window means that there will be the same grace period as any other validator experiencing downtime - likely a few days, before running the chain will be mandatory. I think KysenPool participated in Game of Chains but is not currently on the Replicated Security testnet! If you’d like to join, the info is here and you can DM me on Discord to get help We’d love to have you and it’s a great way to stay informed about…

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Thank you for the feedback! Including voters on the proposal to launch Neutron into the airdrop would not be technically practical, because this data would need to be included into the genesis file which, itself, needs to be included in the proposal. Since we cannot predict who will vote before the proposal is live, I think it’s best to just stick to airdropping based on past event to limit how the airdrop affects the course of the governance process

The public Consumer Chain Launch Rehearsal on the Hub’s Replicated Security testnet is about to start. If you are a Hub validator and want to practice launching Neutron in production-like conditions, now is your chance. Instructions are on the Cosmos Hub’s discord (replicated security section): Discord

Assuming the chain successfully launches today, we’ll be conducting the full set of test on the rehearsal chain throughout tomorrow. Positive results would open the door to the publication of the on-chain proposal

Edit: We have blocks

Edit 2: The chain has halted after ~800 blocks due to a bug. That’s what testnets are for
We’ll investigate and provide an update tomorrow.

Edit 3: The bug has seemingly been identified. An update will be provided tomorrow.

As the team mentioned they are looking for alternative ideas for the fee sharing model its good but in the meantime the users will flock to bigger validators. As mentioned earlier

Neutron:

This feature would allow the bottom 5% of validators by voting power (74 validators at the time of writing) to be free of any penalty for “opting-out” of running nodes for the Neutron network.

this will make the situation worse. Should we wait for a little bit longer to have a viable solution.
2. Initially the Neutron will be a net negative for the hub both economically and on centralization parameters. Is it possible in the future that neutron can leave the hub when their governance makes such proposals. Do we have any say in that(the hub).
3. In your tokenomics docs you have mentioned for two grants 10% each of the entire supply for growth. Do you guys have any alternative if that doesn’t passes.
if those props passes most of it will do to the founders as they are going to be the core members doesn’t it risk decentralization. Can we have a fee sharing module for Dapps like juno.

@Spaydh hi, any update on that matter?

Spaydh:

ing the chain successfu

can you share explorer link, to see the validators who took part in the rehearsals?

Update on the public rehearsal: • Rehearsal-1 (Neutron) successfully launched • A bug on the Provider chain led Rehearsal-1 to halt at block 779 The bug that led to the halt has been identified and replicated. It allowed an incorrect validator set to be passed from the Provider to the Consumer, leading CometBFT/Tendermint to panic. A consumer-side patch has already been developed and will be deployed on testnet shortly. A provider-side patch will likely be needed, and may require a coordinated network upgrade. The bug prematurely ended the tests that were being conducted on Rehearsal-1. Two additional rehearsals will therefore be organized: • Public rehearsal: Thursday 13th of April • Final rehearsal: Tuesday 18th of April, 4PM UTC Every Cosmos Hub validator is warmly encouraged to participate in the final rehearsal next week to ensure consumer chain launches are as smooth and successful as possible. You may join through the Cosmos Network discord in the #replicated-security-testnet channel. Ask @lexa , @uditvira or @dante for the “ICS” and “Replicated Security” roles if your team does not already have it This, unfortunately, will cause a slight delay to…

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You can see the list of validators on the testnet here: Ping Dashboard

Centralized entities who want NTRN are welcome to buy the tokens from community members

Thank you for the update.

It is good that the bug was found. I am sure everyone appreciates why this rightly moves the timeline back.

I’ve written a Swiss booklet for this proposal with help from @Spaydh and @uditvira. The intent is to build on the fine governance work started by Sacha Saint-Leger and address some of the common questions I’ve seen arise on the forum and elsewhere on this proposal.

Swiss Booklet: Launch Neutron on Replicated Security Essays

Introduction Introduction Replicated Security Neutron: The First Potential Consumer Chain Neutron and the Hub Neutron and Hub Validators Neutron Governance Motivation The Cosmos Hub recently launched Replicated Security as part of the successful v9 Lambda upgrade. Neutron, the first potential consumer chain, is ready to launch on the Hub and has put up a draft proposal on the Cosmos Governance Forum so the Hub community can discuss whether we are ready to onboard our first consumer chain. Th…

Another rehearsal was successfully held yesterday. The bug has been been successfully crushed

The final rehearsal of Neutron’s launch is set to take place on Tuesday 18th of April, 4PM UTC . The proposal is expected to be submitted on-chain shortly afterwards if the rehearsal is successful. Every Cosmos Hub validator is warmly encouraged to participate in the final rehearsal next week to ensure consumer chain launches are as smooth and successful as possible. You may join through the Cosmos Network discord in the #replicated-security-testnet channel. Ask @lexa , @uditvira or @dante for the “ICS” and “Replicated Security” roles if your team does not already have it. Announcements and important reminders will be posted in the Interchain Security announcements channel Information for all the testnet chains is available in the testnets repository. For newcomers to the replicated security testnet, first get some tokens from the faucet . Then with those tokens, join the provider chain as a validator by following these instructions . A proposal to launch Neutron on the testnet will be published with the spawn time for the rehearsal chain set to April 18, 4PM UTC. It will include details of the final binary and a partial genesis file (without “CCV state”, i.e.,…

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Neutron: Releases patched to include a “soft opt-out” feature will be launched and tested as part of the internal and public rehearsal described in the timeline below. This feature would allow the bottom 5% of validators by voting power (74 validators at the time of writing) to be free of any penalty for “opting-out” of running nodes for the Neutron network. These validators would still be considered part of Neutron’s validator set and earn a small share of the staking rewards but would not be jailed nor slashed for downtime. With this soft opt-out feature, several scenarios are possible depending on several variables: • This feature seems critical to maintain a decentralized and healthy validator set in the Cosmos Hub so thanks @jtremback . Without this feature, after several consumer chains are onboarded, many validators would likely not be able to cover these additional costs, especially in the current market conditions • Delegators will be receiving the rewards from consumer chains, but they will not be covering any costs to run the additional nodes. So, delegators would be happy with many consumer chains to receive more rewards, while validators need to…

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Cosmic_Validator:

it is mentioned that validators opting out from the bottom 5% of voting power would still earn a ‘small share’ of the consumer chains rewards

To clarify: the soft-opt out as currently designed does not affect rewards distribution at all. Whether or not they opt-out, all validators will receive rewards proportional to their stake. The share is only described as “small” because ~75 validators share 5% of the rewards pie.

Modifying the distribution mechanism is a powerful idea and we’ve been discussing mechanisms with Informal and others, but it’s also important to realize it could have strong adverse effects.

For example, weighting revenue towards the bottom of the set could incentivize Sybil attacks (large vals/holders could break into multiple smaller validators to capture multiple spots at the bottom of the list, kicking out honest validators). This might not be too much of a concern if only the consumer chain revenue is distributed with the new method as the majority of the yield will still come from ATOM inflation early on but should still be considered carefully by the Hub Community.

Spaydh: For example, weighting revenue towards the bottom of the set could incentivize Sybil attacks (large vals/holders could break into multiple smaller validators to capture multiple spots at the bottom of the list, kicking out honest validators). This might not be too much of a concern if only the consumer chain revenue is distributed with the new method as the majority of the yield will still come from ATOM inflation early on but should still be considered carefully by the Hub Community. Many thanks for the clarifications. Modifying the distribution mechanism indeed involves a lot of complexities and risks but also if done properly some potential advantages as well. Here are some thoughts: • Firstly, as you mention ‘this might not be too much of a concern if only the consumer chain revenue is distributed with the new method as the majority of the yield will still come from ATOM inflation’ so sybil attacks would not be highly incentivized since the distribution mechanism modification would be only for a consumer chain • Other consumer chains may keep the current distribution mechanism so overall there could be an offsetting effect, and again not incentivizing…

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Once again, I’m not against any of these ideas, but they’re unrelated to the Neutron proposal. How the hub handles the fees it receives from ICS is for the hub to decide, not the consumer chains. A separate network upgrade proposals can be made to add the required logic to the Hub.

Hey @Cosmic_Validator , @lexa and I will soon be releasing an essay that explores the design space around this and why it’s important. Just wanted to mention it here because we can have a dedicated space on the forum to pursue this workstream & related conversation in that thread.

Thanks for your thoughtful comments here and will be looking forward to continuing the convo in there as soon as the essay is out.

We just published it

I do think there are a lot of interesting possibilities in this design space, but it’s fundamentally a Hub issue as it’s about our own validator set.

Scaling up with conditional basic income Essays

Introduction With the launch of the replicated security functionality from the Lambda upgrade on March 15th, the Cosmos Hub has the technical capacity to establish itself as a key social and economic Hub of the Interchain. However, replicated security has a critical issue: validators are going to incur costs for running consumer chains, and consumer chains are going to need time to generate meaningful revenue. This essay explores how ATOM holders might choose to leverage existing social, fiscal…

The proposal has been submitted on-chain and is currently in the deposit stage:
https://ping.pub/cosmos/gov/792

The proposal has entered the voting period. If you’re ready to cast your vote, you can do so here:
Interchain Explorer by Cosmostation
Proposal #792 | Cosmos Hub | Keplr Dashboard
Ping Dashboard
Interchain Governance

Proposal #792 was accepted, Neutron may launch between the 8th and 21st of May (until the Hub’s light-client trust period expires).

Given that a security upgrade was conducted on the Hub today (Monday 8th), the coordinated launch time has been moved to Wednesday 10th of May.

Pretty Proposals. I’m very sorry for my late response. Still onboard with this project" I voted yes for this and it’s has been approved right from now.

The cosmos hub needs to adopt as many VMs as possible, Neutron was the first step in the right direction, by adopting more VMs we can only grow cosmos developer community, no other chain has such a diverse ecosystem as cosmos.