Prop 993: Neutron and the Hub: A new chapter
Overview
- Support Neutron’s graduation to a sovereign network with strong synergies with the Hub
- Allocate community pool NTRN fairly to support the network’s migration and the adoption of on-chain use cases for ATOM and Hub-related assets
- Signal support for the development of differentiated and complementary on-chain ecosystems on Neutron and the Hub
- Enable continued collaboration to drive the adoption of ATOM, Neutron, and the Hub’s interchain services
See the sister proposal on the Neutron forum here: https://forum.neutron.org/t/mercury-towards-the-integrated-endgame/393
If this proposal is approved by Cosmos Hub governance, the Neutron Foundation has committed to return 50,000 ATOM received as part of Proposal 72 to the Cosmos Hub Community Pool.
Graduation to a Sovereign Network
This proposal signals support for Neutron's graduation to a fully sovereign network via the Mercury upgrade.
From a technical point of view, the migration does not require any code changes on the Cosmos Hub side. Once completed, it will enable the removal of the Replicated Security and Top-N code from the Cosmos Hub binary. Partial Set Security will remain a feature of the Cosmos Hub.
The graduation process will require a Neutron network upgrade, dubbed Mercury, which will be scheduled via a sister proposal to the Neutron DAO.
To ensure a smooth migration, Cosmos Hub validators must continue to validate the Neutron network until the Mercury upgrade (scheduled for the 9th of April) is completed and the core teams confirm that the validator set transition has occurred properly. This will ensure that IBC channels are properly migrated and continue to operate smoothly, safeguarding user funds and protocols across the Interchain.
This proposal allocates 1M NTRN to Cosmos Hub validators as a reward for their continued service over the coming weeks to perform the network's transition. The distribution of the rewards will occur after the upgrade is complete and will be coordinated by the Joint Committee (see below). Rewards will be conditioned upon maintaining > 95% uptime for both block production and price updates and successfully carrying out the migration.
Additionally, this proposal allocates 10.8M NTRN to fund the security budget of the network for the next 2 years and enable the continued payment of the post-migration validator set, composed of leading Cosmos Hub validators:
CryptoCrew, Quokka Stake, Allnodes, Chorus One, cosmosrescue, Cosmostation, Crosnest, Golden Ratio Staking, Hadron Labs, Informal Systems, iqlusion, Kiln, P2P, Polkachu, POSTHUMAN, Provalidator, SG-1, Smart Stake, Stake&Relax, Stakecito.
On-going validator set curation with be carried out by the Neutron DAO and Drop protocol.
Additionally, the collection of validator performance data is being finalized by Numia, and Slinky Beta incentives will be distributed shortly, as planned in Proposal 931.
New Rewards & Opportunities for ATOM on Neutron
This proposal allocates 4,272,795 NTRN to the adoption of ATOM and Cosmos Hub products on Neutron. These tokens will be distributed to ATOM token holders who participate in DeFi on Neutron via dedicated campaigns around ATOM use cases, including liquid staking, liquidity provisioning, lending, borrowing, using ATOM and its derivatives as collateral to trade perpetual futures, tributes, and more.
Once this proposal is executed, the Neutron Foundation (NF) will coordinate with ecosystem protocols to coordinate on-chain campaigns, and NTRN budgets will be allocated by the Joint Committee (see below). These campaigns will provide ATOM holders with new opportunities to use ATOM in DeFi and earn outsized rewards.
Return Excess Tokens to the Neutron DAO
This proposal allocates ~53% of the NTRN currently held in the Cosmos Hub community pool to be distributed to ATOM token holders and validators. The remaining ~47% will be transferred back to the Neutron DAO to fund the continued growth of the network and its ecosystem.
Return Prop 72 ATOM to the Cosmos Hub Community Pool
50,000 ATOM were granted by the Cosmos Hub to contributors of the Neutron Project as part of Proposal 72 and later transferred to the Neutron Foundation as part of Proposal 819. The Neutron Foundation never sold ATOM. Instead, it liquid staked its holdings with Stride, then with Drop to support the adoption of ATOM liquid staking.
In the spirit of fairness, if this proposal is adopted by Cosmos Hub governance, the Neutron Foundation commits to returning the 50,000 ATOM to the Cosmos Hub Community Pool.
Continued Collaboration
This proposal lays the foundation for the continued collaboration of the Neutron and Cosmos Hub teams and communities to create on-chain use cases and demand for the ATOM token and the Cosmos Hub’s products:
- The NF has developed deep knowledge and expertise in ecosystem bootstrapping and will be supporting Interchain Labs’ (ICL) efforts to bootstrap a native ecosystem of new, exciting protocols in and around ATOM and the Cosmos Hub.
- The continued growth of the Neutron ecosystem will drive demand for ATOM and the Cosmos Hub’s bridging, routing, and solving products, driving value to the Cosmos Hub and the ATOM token.
- The NF and ICL teams will collaborate to drive the adoption and growth of the Cosmos developer community, accelerating the growth of both networks.
Implementation
NTRN Allocations
The Cosmos Hub Community Pool received 42,727,950 unclaimed tokens from Neutron’s airdrop. The proposed allocations only concern the airdropped tokens and are summarized below for clarity:
| Item | Amount | % | Destination |
|---|---|---|---|
| Existing programs | 2,160,000 | 5.06% | Already distributed. |
| Migration coverage | 1,000,000 | 2.34% | Joint committee |
| Security budget | 10,800,000 | 25.28% | Joint committee |
| ATOM incentives | 4,272,795 | 10.00% | Joint committee |
| Future partnerships | 4,272,795 | 10.00% | Joint committee |
| Neutron DAO | 20,222,360 | 47.33% | Joint committee |
| Total | 42,727,950 | 100.00% | NA |
Joint Committee
This proposal transfers 40,567,950 NTRN from the Cosmos Hub to an Joint Committee made of representatives from both the Cosmos Hub and Neutron communities. Upon the receipt of the NTRN tokens, the committee will allocate the tokens according to the allocations above.
- 20,222,360 NTRN will be returned to the Neutron DAO
- 10,800,000 NTRN will be transferred to the validator payment module
- 9,545,590 NTRN will be retained in the committee’s treasury to fund ATOM/Cosmos Hub-related campaigns on Neutron as well as the continued collaboration of the network communities.
The Joint Committee is a 3/4 multisig on the Cosmos Hub and Neutron networks, which commands the allocation of NTRN tokens received from the Cosmos Hub community pool and is composed of the following representatives from the Neutron and Cosmos Hub community:
| Signer | Role | Address |
|---|---|---|
| Travis | Cosmos Hub Community Representative | cosmos1hpqgpfsrkqawzjjgql47rrrvkqrry49sxpda7q |
| @agent.kwosh | Cosmos Hub Community Representative | cosmos1945wsvenrnc6vu0p588jswpc56pv27l3kp0aae |
| @luisqa | Neutron contributor | cosmos1ze09kc5ackut7wc4pf38lysu45kfz3ms86w3em |
| @Spaydh | Neutron contributor | cosmos1nu7h4xj3em8mr0huh7906qdv89fnxclr7jy8wy |
The multisig addresses are the following:
- Cosmos Hub: cosmos1fl657t883v2l3s953qngd26wn49v8eddygw9rc44v5ms0cxfwk4qddhuhx
- Neutron: neutron1gxwkypgj884n2gswk3km0ck5js36eqewgx94lxv0pw45w0q6utrsgj4u50
Allocations breakdown
Honor Existing Commitments (Connect Beta + Validator Incentives)
Validator Incentives that have already been allocated to vesting contracts are slated to fully vest on March 26th, 2025.
Connect incentives remain to be distributed. We are finalizing work with Numia to provide the data required to check the validator’s performance and distribute the rewards. Once that is done, we will coordinate with the prop 931 committee signers to execute the transfer.
Fund Validator Operations Leading Up to Migration
Since the migration’s success relies on smooth validator operations, we propose to allocate an additional 1M NTRN to be distributed to validators pro-rata their voting power based on the following criteria:
- ≥ 50% participation on the last 10 Cosmos Hub proposals
- ≥ 95% block uptime on Neutron over the past 3 months, looking back from migration time
- ≥ 95% Slinky uptime on Neutron over the past 3 months, looking back from migration time
- Properly carry out the migration upgrade
Fund Neutron’s Security Budget Following Migration
To migrate from ICS, Neutron will need to bootstrap a sovereign validator set and fund its operations. Most/all of this set will be inherited from the best/most aligned Cosmos Hub validators.
Tokens will be allocated to the Base Comp mechanism to cover validator costs for the first 24 months of the network’s operations as an independent blockchain.
Fund ATOM-related Campaigns on Neutron
To sponsor the continued alignment of the projects and their communities, ~4M NTRN will be reserved for incentives/campaigns tailored to the Cosmos Hub’s assets and community.
- Liquidity incentives to ATOM, dATOM, and other Cosmos Hub assets
- Incentives to cover the opportunity cost of converting from native staking to liquid staking
- ATOM spot and perps trading campaigns
- Other ATOM-aligned campaigns
Allocation for Future Joint Ventures
Tokens earmarked to support future joint ventures benefiting both ecosystems, such as supporting the growth and adoption of Cosmos, joint hacker houses and hackathons, etc.
Return Excess to the Neutron DAO
The remainder will be returned to the Neutron DAO Treasury.
Governance votes
The following items summarize the voting options and what it means for this proposal:
YES - You support Neutron’s migration to a sovereign network, the proposed allocation of Community Pool NTRN, and the return of 50K ATOM from Proposal 72 to the Cosmos Hub Community Pool.
NO - You disagree Neutron’s migration to a sovereign network and/or the proposed allocation of Community Pool NTRN.
NO WITH VETO - A ‘NoWithVeto’ vote indicates a proposal either (1) is deemed to be spam, i.e., irrelevant to Cosmos Hub, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Cosmos Hub governance. If the number of ‘NoWithVeto’ votes is greater than a third of total votes, the proposal is rejected and the deposits are burned.
ABSTAIN - You wish to contribute to the quorum but you formally decline to vote either for or against the proposal.