Summary
Asteroid Protocol contributors expect to launch a token bridge between Cosmos Hub and Neutron in the coming weeks. With the bridge, users will be able to move any of the 4,900+ unique CFT-20 tokens that have been created on Cosmos Hub to Neutron and back again. Upon arrival on Neutron, all bridged tokens will be minted as tokenFactory tokens, which are fully compatible with Astroport’s LP pools.
With thousands of tokens available for bridging, we believe that offering ASTRO rewards for one of the most anticipated CFT-20 liquidity pools will help attract LPs and immediately establish Astroport as the premier destination for CFT-20 liquidity.
Asteroids (ROIDS) makes an ideal token for incentivization for several reasons: it was fairly launched with no advance marketing (and therefore no bot minting). It was the first CFT-20 on Asteroid Protocol and has the most brand awareness as well as a large and distributed holder base (2,700+ wallets).
This signaling proposal aims to get community approval to establish ASTRO emissions for a 3-month period in the ROIDS-ATOM PCL pool. If approved, 625,000 ASTRO will be sent to the Astroport builder’s multisig (neutron1ac2fddfcr3ax4ggarhx0vcaj32fmatsx8p5d6a) so that emissions can be applied shortly after the launch of the CFT-20 bridge.
Background
Created by Astroport contributors, Asteroid Protocol is the leading inscriptions and tokens protocol on Cosmos Hub. With its launch in January, the protocol brought NFTs to the Hub for the first time in its 5+ year existence. That has spawned the creation of more than 50,000 NFTs and 247 collections to date. The protocol also introduces a new fungible token standard on Cosmos Hub dubbed CFT-20s, which has seen more than 4,900 unique tokens and counting deployed on-chain.
All this activity has been driven by 213,000+ Cosmos Hub addresses and – much like ordinals have done for bitcoin – helped spark a cultural renaissance on the Hub. It has also offered significant benefit to Astroport as well. That’s because all Asteroid-based marketplace trades feature a 2% swap fee, which is IBC’d to Neutron and deposited in Astroport’s xASTRO staking pool with each transaction. Roughly $50,000 in ATOM has been programmatically converted to ASTRO and deposited in the xASTRO staking pool to date.
Because Cosmos Hub does not support permissionless smart contracts, it does not currently have a native AMM. That means CFT-20 trading on Asteroidprotocol.io is more akin to trading NFTs. Specifically, users have to post “lots” of tokens for sale at a specific price (i.e. 1,000 ROIDS for 5 ATOM).
The upcoming bridge will allow CFT-20s to be used by AMMs like Astroport. And this will enable the missing piece for CFT-20s: programmable liquidity. This liquidity can unlock new use cases on Cosmos Hub as well as potentially lead to the creation of dozens or hundreds of new liquidity pools on Astroport over time.
With the help of a grant from the Neutron Grants Foundation, the CFT-20 bridge to Neutron has successfully passed an audit by Oak Security and is expected to launch in the coming weeks.
Once a CFT-20 token is bridged to Neutron, it can be IBC’d to other chains throughout the Cosmos. To help cement Astroport as the leading destination for bridged CFT-20 liquidity, we propose a tapered, 3-month emissions campaign for a ROIDS-ATOM PCL pool that would reward LPs with ASTRO emissions with the following schedule:
- 300k ASTRO for Month 1
- 200k ASTRO for Month 2
- 125k ASTRO for Month 3
We also propose a modest increase to standard LP fees of 0.5% to ensure APYs remain attractive for LPs even after the conclusion of this emissions campaign.
Note that if other pools (i.e. ROIDS-USDC, ROIDS-NTRN, ROIDS-ASTRO) also attract meaningful liquidity, a portion of the Month 2 and Month 3 ASTRO emissions (up to 50%) could be redirected as rewards for those LPs. Any adjustments would be communicated in advance.
Proposal benefits
There are numerous benefits to quickly and immediately establishing Astroport and Neutron as the home for bridged CFT-20 liquidity including:
- Increased liquidity and trading volume on Astroport (and consequently fees shared back to ASTRO stakers)
- Prominent exposure to a new, Cosmos-native userbase
- Strengthens the ATOM Economic Zone (AEZ) by directly linking Cosmos Hub, Astroport and the Hub’s first interchain security chain, Neutron
- The ability for CFT-20 token deployers to use Astroport’s permissionless incentives framework to reward LPs in other pools. For example, anyone could permissionlessly create a CFT-20 and offer $NTRN rewards (or any other token) to anyone who LPs their token in a specific pool on Astroport
With programmable liquidity on Astroport, Asteroid-based applications could also theoretically tap Astroport liquidity in interesting ways including:
- The ability for Asteroidprotocol.io to expand to enable the buying and selling of Cosmos Hub inscriptions and tokens with any asset in your wallet (i.e. $NTRN or $OSMO). Bridging could happen in the background
- Making payments in CFT-20s, which you don’t hold (the conversion could happen in the background via the bridge and AMMs)
Conclusion
By approving this signaling proposal, the Astroport community can attract a new userbase, strengthen the AEZ, differentiate itself from other Cosmos DEXes, and become the canonical home for bridged CFT-20 liquidity. Assuming Astroport does become the de facto home for CFT-20 liquidity, it has the potential to attract dozens or even hundreds or thousands of additional CFT-20 pools over time.
Copyright
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