Strategic guidelines for allocating the Hub's NTRN
Introduction Proposal 835 approved the transfer of ~42,727,950 NTRN tokens from Neutron DAO to the Cosmos Hub Community Pool, in respect of the unclaimed NTRN airdrop to ATOM stakers and voters. These NTRN tokens, valued at ~$50m at current prices, represent the most significant return for the Hub’s (an initial funding of 50,000 ATOM ($500,000)) in it’s entire history, and a significant voice for the Cosmos Hub in the future direction of the first ICS consumer chain. It was established in prop 835 that use of these tokens should be governed by two basic principles. • Do no harm : The Cosmos Hub, its governance and community pledge to only use or deploy the NTRN tokens in ways that do not harm the Neutron network or DAO. • Cooperation : The Cosmos Hub, its governance and community pledge to use or deploy the NTRN tokens in ways that benefit both the Cosmos Hub and the Neutron network and DAO. Under these two guiding principles, the Cosmos Hub’s governing community pledge to only use or deploy the NTRN tokens in ways that do not harm Neutron, and benefit both the Cosmos Hub and Neutron. The incentive alignment between Hub and Consumer Chain means the success of each…
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Great writeup thanks Spaydh. Excited to see these funds start to be deployed strategically, especially to expand liquidity, use cases, and activity on Neutron.
Curious what kinds of thing you would prioritize in terms of ICS research and governance tooling?
Here are a few thoughts we have regarding the ideas shared above: Spaydh: The Cosmos Hub has pioneered Interchain Security, by bringing the first restaking product (Replicated Security) to market in Cosmos. After almost a year of Replicated Security being live, Eigenlayer is proving the value and demand of great shared security offerings - so much so that pre-launch, Eigenlayer has ~$10b of ETH TVL staked to secure future consumer chains. We are fully aligned with that statement. The Hub has pioneered shared security with a significant head-start. Now that competition is about to hit the market, we already have pioneered innovation beyond economic security sharing, as we now share a cooperative framework within ICS (InterChain Security). The forthcoming arrival of Partial Set Security (PSS) will be the more flexible option without this additional flavor. Spaydh: Since providing POL for volatile pairs is generally unprofitable, the main reason for an entity such as the Cosmos Hub or Neutron DAO to enter such a position is strategic: it can sometimes be sensible to accept monetary losses in exchange for bolstering the platform’s ecosystem growth.…
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Spaydh:mintscan.ioNeutron recently proposed to allocate 10,000 NTRN (~$11k) over 12 months to all Neutron operating Cosmos Hub validator to align incentives and subsidize operation. The total amount being allocated to validators is 1.8m NTRN (~$2m).
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The proposal has been approved. Transactions and smart-contracts to provide the validator incentives are being prepared.
Any updates about the above @Spaydh? You claimed on the 31st January 2024 that the transactions and smart contracts were being prepared to allocate the NTRN vesting to Cosmos Hub validators, and this was approved by both Cosmos Hub (proposal 867) and Neutron governance. It has been almost 2 months since your last update regarding the allocation of NTRN vesting which has to be implemented asap since it was approved by on-chain governance at both the Cosmos Hub and Neutron
In my opinion…
Governance :
- Timewave’s covenants
- Voting vault technology
- Work that clearly defines the Cosmos Hub’s primary objective. In my opinion this should be winning shared security, and everything downstream should reenforce that.
- Work that clearly defines how to mobilize a decentralized community around a primary objective.
- Work that clearly defines what policies need to be in place to achieve that objective.
ICS Research :
- Sustainable economics and standardizing ICS “SPAs”
- How to do POL in a way that reenforces the Cosmos Hub’s key objectives (instead of rushing into ATOM Wars)
Spaydh: • Making ATOM the default interchain capital and gas token on Neutron. • Launching additional use cases for ATOM on Neutron All of these suggestions sound good in principle but now that NTRN is in the Cosmos Hub treasury it needs to manage the pot of NTRN intelligently. I don’t see any reason why the NTRN in the Cosmos Hub POL should be deployed to fund grants for projects running on Neutron. This is essentially the Cosmos Hub treasury turning into a Neutron system venture capitalist which I don’t think is a good idea given that Neutron is going head to head against Solana (and Polkadot to a far lesser extent) in the WASM execution engine market. I wouldn’t fund anything against Solana. Solana is a formidable competitor, it’s not an Ethereum, which is like beating a dead horse (from technology perspective). If projects can’t raise money in the market, I don’t see why Cosmos Hub should be fronting money. The only 2 situations in which I see the Hub Treasury investing in a Neutron smart project is IF: • Project raises money on its own in the market from independent (from the Hub) VCs who are fronting their own money and then the Hub Treasury…
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Hi, yes indeed. We’ve faced a number of issues with 4 different multisig UI implementation for cosmos sdk multisigs and signer coordination limitations which delayed the process, but have since then worked with the UI maintainers to get issues addressed, which has allowed signers to proceed. The allocations should be done shortly. We’re also working on monitoring/automation solutions to update the allocations dynamically based on validators joining/leaving the active set to make the operations smoother going forward.
I don’t think Neutron is competing with Solana, and I don’t think ecosystem adoption is primarily driven by development language. Working with entrepreneurs and developers has consistently shown that the primary considerations of teams choosing the right stack to build on are primarily driven by (by order of importance): • Economics: What is the total market/opportunity size, how easy will it be to attract capital? • Narrative: Will launching on one stack/ecosystem give the project an advantage in G2M/fundraising/marketing of the project? • Network: Does the team have relationships with key partners in the ecosystem that could meaningfully support them? • Technology: does the product/vision require a specific technical stack to be realized? In reality, competent teams will simply learn to use a new stack if it enables them to deliver their vision or give themselves better chances of success. We’ve seen this with Duality, dYdX (coming into the eco) Vertex and other Terra protocol leaving for the EVM world, and countless other projects over the years. Based on this, I think it is on the contrary extremely justified for the Hub to allocate resources to boosting the…
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What you think about Neutron is not what the rest of the world thinks about Neutron. In this case, what matters is how smart contract developers think about Neutron. For developers, they look at Neutron as a place to deploy WASM smart contracts. Well… Neutron isn’t the only blockchain to offer WASM smart contract execution. Solana does, Polkadot does, etc. After that a dev team would look at how expensive are transactions and what the throughput is, etc. On that account, Solana is both more decentralized (800 validators vs 180) and faster. Or at minimum the discrepancies aren’t as large. After that, devs would look at how big the market place is. How many Neutron wallets are installed (Keplr has 1 million downloads) vs how many Solana wallets are installed (Phantom is at 3 million I think). By many measures, Solana is a bigger system than Neutron and has network effects and that makes devs sign up there. Obviously, Neutron has an advantage in that it is in an IBC chain but in the long run Solana will be implementing IBC connectivity so that won’t be a huge advantage either. You may not be competing with Solana but Solana is competing with you. Comparison to DYDX are not…
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Solana, more decentralized ? hub is not juste 180 … but more than 600 but 180 are rewarded
That’s how people perceive it. Whether its right or wrong doesn’t matter. Perception is reality. As far as I am concerned 180 is decentralized enough. So long as you have a deep bench of validators ready to step in, that’s all that matters. The chances of Cosmos Hub going out are far less than Solana. In fact, Cosmos Hub has never shut down whereas Solana shuts down a few times a year. I am not a Solana advocate, I am just saying how other people think about this (judging by their behavior).