Note: all of the below is subject to a similar proposal being passed by the Neutron Grants SubDAO.
This is a non-binding signaling proposal to encourage discussion around and assess support for deploying an instance of the Astroport smart contract system onto Neutron (“Astroport satellite on Neutron”) at or shortly after Neutron’s genesis, as follows:
- The Astroport satellite on Neutron will donate in perpetuity 10% of accrued Maker fees with the Neutron DAO’s on-chain Treasury.
- 0.5% of Neutron supply will be allocated to a to-be-formed foundation entity devoted to holding protocol-beneficial-value (PBV) related to Astroport, with details of the governance of this entity and the permitted uses of the associated PBV to be submitted to the Astroport Assembly in a separate signaling proposal that is under development with legal counsel.
- Neutron commits to:
- Incentivise Astroport pools with NTRN rewards
- grant governance power to Astroport NTRN LPs (i.e. so-called ‘superfluid staking’ where LP’d NTRN can still be used in Neutron DAO governance)
- Lock the liquidity obtained during its Token Generation Event into Astroport’s satellite on Neutron.
As a result of this deployment, the Neutron and Astroport communities would be naturally incentive-aligned and Astroport’s satellite could emerge as the flagship AMM of Neutron. Completion of the transactions contemplated by the proposal is conditional on a mirror-image proposal passing any advisable or required votes in Neutron DAO as well as any binding on-chain proposals needed for the implementation ultimately passing the Astroport Assembly.
Neutron is an upcoming Cosmos chain specialised for cross-chain smart contracts. It is the first interchain-security consumer chain secured by the ~$2.5b staked ATOM on the Cosmos Hub.
Neutron’s launch presents an opportunity for an AMM protocol like Astroport to launch simultaneously and be the chain’s inaugural AMM with a deep starting integration and natural incentive-alignment between the communities, creating a strong starting point for long-term synergies.
Additionally Neutron’s highly secure nature, neutral positioning and feature set designed for cross-chain smart contracts makes it an attractive home for cross-chain dApps such as Astroport’s.
As a multi-chain AMM, Astroport is incentivised to deploy and become a leader in any ecosystem that features economic activity or shows a high potential for future economic activity. Neutron meets these criteria.
Astroport Fee Share and NTRN Grant
After Neutron’s liquidity bootstrapping event it will need a decentralised venue to contain and further incentivise the resulting NTRN liquidity. Given this venue will be Astroport, it makes sense to align incentives between the L1 and AMM, and provide some benefit to Neutron to balance the benefit being granted to Astroport.
It also gives Neutron a schelling point for projects launching there to bootstrap and incentivise liquidity for their own tokens, resulting in Neutron being an attractive place to launch a project, improved UX for users and minimising the fragmentation of liquidity between multiple AMMs.
This proposal seeks to achieve this incentive alignment between Neutron and Astroport by granting the L1 a share of revenue from Astroport and in return an Astroport PBV entity receiving a gradually unlocking allocation of NTRN tokens to be used to benefit the Astroport protocol community.
As a reminder, on other chains, Astroport’s user fees for each particular pool are divided between LPs and the Maker contract, where the Maker contract is dedicated to purchasing ASTRO and apportioning it to ASTRO stakers in the Astroport Assembly). The fee split varies per pool: on XYK pools, there’s a ⅔ (66.67%) split to Astroport LPs and ⅓ to the Maker contract. Stableswap fees are split 50/50.
Instead, if this proposal is implemented, the Maker contract of Astroport’s Neutron satellite would send 10% of accrued ASTRO (originating from Maker fees) to the Neutron DAO, with the remaining 90% going to ASTRO stakers.
From the Neutron DAO side, 0.5% of NTRN supply would be allocated to a Foundation entity specifically designed to hold “protocol-beneficial value” related to Astroport, as further described below.
Liquidity is vital to an L1 and support from the L1’s community is similarly vital to the AMM. We believe this arrangement creates a good alignment between Astroport and Neutron that will be mutually beneficial.
Donation of NTRN to Astroport PBV Entity
To receive the NTRN donation, a new Astroport-adjacent foundation entity will be designed and incorporated using Delphi Labs’ new approach to ‘cybernetic organizations’ (aka “CybOrgs”, aka “BORGs”)–the Astroport PBV BORG. This entity will be devoted to holding “protocol-beneficial value” (PBV) related to Astroport. PBV is a legally compliant, transparently entity-owned and entity-managed alternative to the kind of “protocol controlled value” innovated by OlympusDAO and others (which, unfortunately, can cause numerous legal problems in its native form (including a major risk of turning the PCV-’owning’ DAO into a taxable partnership)).
Although the Astoport Assembly will not “own” this value and cannot receive it as dividends, distributions, etc., the Astroport PBV BORG will have encoded into its governing documents and multisig smart contracts constraints requiring that all PBV be used for the good of the entire Astroport community (liquidity providers, traders, the Astroport Assembly, etc.). A possible use of the donated NTRN would be providing liquidity to an ASTRO/NTRN pool and donating the resulting fees to an Astroport Grants Foundation that could fund further protocol research and development related to the Astroport Protocol. It could also be used to obtain voting power and participate in potential future incentives distribution or other governance decisions.
The Astroport PBV BORG would be designed to have both legal and technological checks-and-balances with the Astroport Assembly (within legal limits)-–for example, one feature under discussion is whether the Astroport Assembly could directly and permissionessly vote staked NTRN on Neutron DAO proposals. The exact details of this entity and copies of its draft governing documents would be submitted for public review/discussion and an Astroport Assembly signaling vote before being finalized.
If the above is agreed then Astroport will be the inaugural AMM on Neutron, and we propose that the Neutron DAO also agree to the following:
- Neutron to deposit and lock the liquidity raised during its Token Generation Event into Astroport
- Neutron provides voting power to Astroport’s main NTRN liquidity pools via Voting Vaults, unless justified by disproportionate technical or governance risk.
- Neutron to match ASTRO incentives for the main Astroport pools on Neutron.
- The Neutron community would be incentivised by its fee allocation to support Astroport with integrations and order flow.
There is a strong alignment between Neutron and Astroport: cross-chain expansion model, providing voting power to LPs, etc ; as well as synergies between Neutron, Astroport, Lido and Mars protocols.
This proposal is being made by Delphi Labs Ltd., a British Virgin Islands limited company. Delphi Labs engages in incubation, investment, research and development relevant to multiple ecosystems and protocols, including Astroport Protocol and Mars Protocol. Delphi Labs and certain of its service providers and equity holders own ASTRO tokens and have financial interests related to this proposal. Additionally, Delphi Labs is one of several entities associated with one another under the “Delphi Digital” brand. Delphi Digital’s associated entities and/or equityholders or service providers of such entities may hold ASTRO and may have financial interests related to this proposal. All such entities, service providers, equity holders and other related persons may also have financial interests in complementary or competing projects or ecosystems, entities or tokens, including Neutron/NTRN. More specifically:
- Delphi Ventures invested in NTRN-token-related contract rights in a venture financing round related to Neutron.
- Delphi Labs is in discussions to potentially acquire NTRN tokens (independently of this proposal).
- One of the P2P group companies incubated Neutron Protocol and its affiliate is an investor and shareholder in Delphi Labs.
These statements are intended to disclose relevant facts and to help identify potential conflicts of interest, and should not be misconstrued as a complete description of all relevant interests or conflicts of interests; nor should they be construed as a recommendation to purchase or acquire any token, asset or instrument
This proposal is also subject to and qualified by the Astroport Disclaimers/Disclosures. Delphi Labs may lack access to all relevant facts or may have failed to give appropriate weighting to available facts. Delphi Labs is not making any representation, warranty or guarantee regarding the accuracy or completeness of the statements herein, and Delphi Labs shall have no liability in the event of losses or damages ensuing from approval or rejection or other handling of the proposal. Each user and voter should undertake their own research and make their own independent interpretation and analysis of all relevant facts and issues to arrive at their own personal determinations of how to vote on the proposal.