ARC-85: Migrate the Astroport Hub to Neutron

Proposals ARC (Astroport Request for Comments)
1

Summary

  • Astroport Assembly to grant the Neutron DAO 5% of ASTRO supply
  • Neutron DAO to grant the Astroport Protocol Foundation an equivalent amount of NTRN based on 5% of ASTRO using a 30-day TWAP (collared to a maximum of 0.5% of NTRN supply and a minimum of 0.3% of NTRN supply)
  • Astroport Assembly to grant the Neutron foundation 1% of ASTRO supply, intended to help fund NTRN liquidity incentives to one or more key Astroport pools
  • Astroport to move hub to Neutron
  • Astroport to release vxASTRO and bribes on Neutron
  • Offchain commitments involved in the proposal to be memorialised in agreement between Neutron Foundation and Astroport Protocol Foundation

Introduction

Neutron aims to establish itself as the “ATOM economic zone” by driving liquidity from around the Cosmos and beyond it into ICS Chains. As part of this, it seeks to become the Cosmos DeFi and liquidity hub, as well as the home for Cosmos multi-chain projects.

The AMM is a key primitive for any DeFi chain, enabling on-chain liquidity and price discovery. Astroport is currently the 2nd largest AMM in Cosmos, and the largest AMM on every chain it’s deployed on (Terra, Injective, Neutron, and Sei). Astroport has a strong focus on efficient passive liquidity provision via its innovative pool types such as Passive Concentrated Liquidity which enables ~2-3x greater capital efficiency compared to xy=k, thus making it ideal for a DeFi and liquidity hub. Alongside Duality and Neutron, Astroport also recently shared a vision for an aggregated liquidity book via integration with Duality’s liquidity book.

Neutron aims to be the hub for multichain Cosmos projects. Astroport’s hub-and-outpost design is perhaps the exemplar of a multichain Cosmos project, with successful outposts deployed on 4 chains so far. As more new chains launch, Astroport can continue to deploy outposts and become the go-to AMM and passive liquidity nexus of Cosmos.

As the Cosmos ecosystem succeeds in attracting liquidity and users, Astroport generates significant fees on its various outposts which will flow to Astroport’s ‘hub’ – i.e, the flagship chain where the Astral Assembly (Astroport’s governance contracts) are deployed. The Astral Assembly governs Astroport’s flagship AMM system on the Hub as well as all Astroport AMMs on other chains–including by directing the flow of incentives from outposts back to the hub.

The Proposal

Given the clear synergies between Astroport and Neutron, we propose a deeper strategic collaboration between the two communities.

Astroport would move its hub to Neutron, launching vxASTRO and a generalised Curve-style ‘bribes’ protocol on top. To align incentives & give the Neutron community a strong voice in Astroport’s governance (including the upcoming “ASTRO Wars II”), the two communities would also engage in mutual grants of ASTRO and NTRN to one another.

Neutron <> Astroport Specifics

Astroport proposes to move its governance hub to Neutron. This entails:

  • migrating the ASTRO token from a CW-20 native standard to a Cosmos Token Factory standard; and
  • migrating Astroport’s governance smart contracts (the Astral Assembly) to Neutron.

As a result, Neutron would become Astroport’s ‘hub’ and all system fees from both the Astroport AMM on Neutron and Astroport AMMs on all other chains would flow to the Astral Assembly on Neutron.

After the hub is moved, Astroport will release its long awaited vxASTRO implementation along with an accompanying Curve-style ‘bribes’ marketplace to its hub on Neutron. As we saw with the “ASTRO Wars” on Astroport’s initial implementation on Terra, many chains and projects would likely look to acquire ASTRO tokens in order to influence incentives–sparking off “ASTRO Wars II” in the broader Cosmos ecosystem.

Given Neutron’s position as not just Astroport’s hub but also a hub for Cosmos liquidity, it would be beneficial for the Neutron community to have a large ASTRO stake and thus a large say in Astroport’s governance. In this manner, the Neutron community would also establish an early lead in ASTRO Wars II. This allows Neutron to influence incentives which can be used to ensure liquidity remains on Neutron for key tokens and act as a carrot to attract new projects to launch on Neutron.

Astroport benefits greatly from any liquidity that Neutron attracts, and given Neutron is likely to invest significant NTRN in attracting wstETH and other assets, it also makes sense that Neutron has significant ownership of ASTRO such that it benefits from the results of these efforts.

Thus, in addition to moving the hub we also propose parallel NTRN and ASTRO grants, as follows:

  • the Astral Assembly would donate 5% of ASTRO (funded from the ASTRO ‘community pool’ controlled by the Astral Assembly) to the Neutron DAO (intended to be held long-term and staked in the Astral Assembly);
  • the Neutron DAO would donate to the Astroport Protocol Foundation an amount of NTRN equivalent in value to 5% of ASTRO; this NTRN would be intended to help fund Astroport hub migration, the implementation of vxASTRO and Curve-style ‘bribes,’ and miscellaneous post-migration operations of the Astroport Protocol Foundation
  • the value of NTRN for purposes of calculating the donation amount would be calculated as follows:
    • time-weighted average prices (TWAP) of NTRN over the 30 days preceding the final onchain proposal for the transactions contemplated in this signalling proposal, using CoinGecko daily price levels as of 11:59pm UTC each day during the period
    • the TWAP would be ‘collared’ so that the maximum amount of NTRN payable for 5% of ASTRO is 0.5% of NTRN supply and the minimum amount of NTRN payable for 5% of ASTRO is 0.3% of NTRN supply
  • the Astral Assembly would donate an additional 1% of ASTRO (funded from the ASTRO ‘community pool’ controlled by the Astral Assembly) to the Neutron Foundation (intended to help fund liquidity incentives for key Astroport pools such as the wstETH pool);

Note: the exact amount of NTRN will be specified in the final binding onchain proposal, based on the above formula.

As a result, the Neutron community collectively would own 6% of ASTRO and the Astroport and Neutron communities would be long-term aligned and deeply synergistic.

All of the above transactions would be cross-conditional. The token donations would occur first, to be followed promptly by Astral Assembly migration and implementation of vxASTRO and ‘bribes’. To ensure migration and vxASTRO/bribes completion actually occurs after the token grants, the Astroport Protocol Foundation would enter into contractual commitments with the Neutron Foundation prior to effectuation of the token grants. The Astroport Protocol Foundation would also covenant that any sales of its NTRN will be conducted OTC, while the Neutron Foundation would covenant to provide certain liquidity incentives to one or more key Astroport pools and that any sales of its ASTRO will be conducted OTC.

This is an omnibus signalling proposal being simultaneously shared on the Neutron and Astroport governance forums. Implementation of the plan may require one or more sub-proposals to be made to each DAO for binding onchain governance approval as well as off-chain agreements by the Neutron Foundation and/or Astroport Protocol Foundation.

DISCLAIMERS/DISCLOSURES

This proposal is being made in whole or in part by or on behalf of or with the participation of 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.
  • One of the P2P group companies incubated Neutron Protocol and an affiliate of that entity is also 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.

7 Likes
2

Fully in support of this proposal!

The proposal mentions The Astroport Protocol Foundation- is this a new body or a new nomenclature for an existing body? I could be mistaken but not sure I’ve heard that term before

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I was waiting for this. Neutron already has more volume than Terra most days, it’s a new chain with a bright future, the right place for Astroport to make a new home. Let’s do it!

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Hey great observation. You’re right it’s not been previously talked about.

It’s an independent not-for-profit foundation devoted to research and development of the Astroport protocol, and is currently in the process of being incorporated

3 Likes
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Sounds like a great idea, appreciate the reply!

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This proposal marks a pivotal step forward for the entire Cosmos ecosystem. We’re supportive of the proposal and look forward to witnessing the positive ripple effects that will follow. Kudos to all involved in crafting this comprehensive plan :raised_hands:

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7

So… what about ARC-57?

Let me remind everyone that the Astral Assembly voted to deploy Astroport on Neutron in the first place because of the deal described by ARC-57, in which Astroport was to receive 5,000,000 NTRN. But did Astroport ever receive that money?

Also, in ARC-57 it was said that Neutron commits to, “incentivise Astroport pools with NTRN rewards.” But has Astroport received NTRN incentives?

We should finalized ARC-57 before beginning the conversation about another deal with Neutron.

8

ARC-57 is just pending some smart contract work to custody the assets that took way longer than expected. That’s done now but needs audit. My expectation is that it still goes ahead but always there’s some risk given time and the nature of DAOs.

FWIW moving the hub is also not an instant thing and will take some months of planning and effort.

1 Like
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Thanks for the update. Very reassuring to hear that ARC-57 hasn’t been forgotten.

Do you think we should put up a signaling proposal on Neutron to establish social consensus around ARC-57? Just want to be careful here. I think Neutron should clearly commit to their last deal with Astroport before we start talking about another deal, even if that commitment is just a signaling proposal.

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Hey ser, it’s being rolled out. Here’s the status:

Status Astroport commitment Neutron commitment*
Done Launch on Neutron at Genesis Use Astroport for TGE and provide Neutron PoL to Astroport + Grant governance power to Astroport LPs
In progress Astroport to share revenue to the Neutron DAO Neutron to grant NTRN to the Astroport PBV Foundation + Neutron to incentivize pools on Astroport

There one small caveat here being that, as you pointed out, *the Neutron DAO never explicit voted to ratify the deal. As @lukedelphi said, the NTRN grant to the PBV Foundation was delayed by the implementation of dedicated contracts for it to receive the tokens, so no proposal was ever made on this topic. I’d support the signaling proposal you suggest.

I think the collaboration between the projects and their communities so far has been pretty damn successful and I don’t see any reason why that would change, on the contrary. I think there is a clear vision for how Neutron and Astroport make each other stronger and this proposal goes into that direction as well.

2 Likes
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Yes we should do this / have done this. Originally the expectation was that the decision on Neutron’s side would be taken by the grants sub-DAO in which case signalling less important, but as things turned out this is no longer the case and it would have to go to main DAO.

In order not to confuse the current Neutron proposal (which is more important imo) I suggest we let that one run to a vote then follow up with this suggested signalling prop.

1 Like
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Guys… IM IN! This is the rocker

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Thank you @lukedelphi and @Spaydh for clarifying the matter of ARC-57.

I do think it would be best to pass a signaling proposal on Neutron about ARC-57 before any further deals are made. Artroport passed ARC-57 more than three months ago, but Neutron still hasn’t ratified it. I think it would be reasonable and proper to have Neutron confirm social consensus around ARC-57 first, as the outcome of that Neutron vote would affect this current proposal, namely ARC-85.

And turning to this proposal, the proposed 5% of ASTRO supply for the Neutron DAO strikes me as rather high, considering the context.

That works out to 55M ASTRO, which the Neutron DAO would stake. There’s currently about 150M ASTRO staked, so Neutron’s stake would represent 25% of Astroport’s vote power.

That’s already a huge amount of vote power, but consider that most ASTRO holders don’t participate in governance. Given the extremely low turnout, Neutron’s share of the active vote power would be closer to 50%, I’d say.

But there’s more! Given that vxASTRO hasn’t been finished, we don’t know the full details. But based on what I recall from vxASTRO V1, users could lock their ASTRO to boost voting power. Assuming that will still be the case, if Neutron DAO decides to max-lock its 55M ASTRO - which it probably will - then it might end up with greater than 50% of Astroport’s entire vote power.

To be clear, I’m totally in favor of Astroport’s deepening relationship with Neutron. In fact, in a comment almost a year ago I expressed support for moving Astroport Hub from Terra to Neutron - and that was six months before Neutron launched! I’m still very much in favor of the idea.

But giving 55M ASTRO to Neutron might be a bit too much, considering how much that is as a percentage of the circulating supply. As I’ve explained, that much ASTRO might give Neutron complete control of Astroport.

3 Likes
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The proposed treasury swap needs to be with an (unstaked) vesting of 4 years. These tokens should not receive any governance power until vested. I aggree with @John_Galt on this one, signing over complete (25-50%) control of governance and incentives over to Neutron DAO is a bad idea.

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@John_Galt @Philipp I appreciate the concerns here. To address them as best I can:

Signalling proposal for ARC-57

Given the extent the wheels are/were in motion on ARC-85 in both DAOs I didn’t want to put this on ice until ARC-57 could be signalled on the Neutron side even though I agree that would have been better. I see ARC-85 as significantly more valuable to Astroport as the resulting NTRN can be used to compensate for future developments. ARC-57 would ultimately result in liquidity to an ASTRO/NTRN pair which is less impactful. And as I mentioned before we will push on with putting that proposal up once this one is concluded.

Concerns over voting power

I think turnout is usually low as proposals are not controversial and if they look like they will pass with a reasonable outcome people don’t bother. I am sure though if Neutron were to propose something against the best interests of Astroport, voters will come together to shoot it down. Lastly the implementation of vxAstro you mention were voting power increases proportional to lock time did not end being the final design, so the Neutron DAO won’t be able to boost their voting power in this way.

So overall even though I don’t think I will have changed your opinions I’m still in favour of this proposal going through. Me or another contributor will post this on chain tomorrow so we can vote on it.

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Some general updates here. The proposal was posted last week onchain to the Neutron DAO and is currently over quorum with a heavy majority in support. See N-13 here.

In order for the two proposals to finish at about the same time, ARC-85 will be posted onchain tomorrow as scheduled.

TWAPs and Final Token amounts

Due to the different onchain voting periods for Neutron and Astroport DAOs, combined with the desire to have both proposals end at approximately the same time, it was necessary to set the TWAPs according to prices as of 11th September 11:59pm UTC, when the Neutron DAO proposal was created. Both prices are now higher, but the ratio between the two TWAPs remains approximately the same.

According to the method described above the ASTRO and NTRN values used were.

  • ASTRO: $0.0229021544460507
  • NTRN: $0.32793066373401

The onchain message of this proposal will send 55,000,000 ASTRO to the Neutron DAO and 11,000,000 ASTRO to the Neutron Foundation.

Destination Address

This proposal sends the above 55M ASTRO to neutron1suhgf5svhu4usrurvxzlgn54ksxmn8gljarjtxqnapv8kjnp4nrstdxvff which is the Neutron DAO on Neutron chain, and 11M ASTRO to neutron13zwlfzwqtegmuguczf3mvefupyfcvhp0df2u0wrk5ek0tr5zer4suj0g0u which belongs to the Neutron Foundation.

How to check the proposal’s correctness

The proposal consists of a two bank send messages over IBC to address on Neutron. To check the amounts and addresses the messages one will need to base64 decode using a tool such as base64decode.org.

To check the addresses:

  1. Compare the message’s address with publicly available resources:
    1. The Neutron DAO should correspond to the address shown in Neutron’s public docs
    2. The Neutron Foundation should correspond to the address receiving funds in this previous Neutron proposal

The onchain message

This is the message to be posted. It’s been simulated using a dummy treasury contract on mainnet.

[
  {
    "wasm": {
      "execute": {
        "contract_addr": "terra12ncurr62xe93xrsh2drp4zvehj0gn32lfnshr8k0p4xfyju2knwq2qgmh2",
        "msg": "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",
        "funds": []
      }
    }
  },
  {
    "wasm": {
      "execute": {
        "contract_addr": "terra12ncurr62xe93xrsh2drp4zvehj0gn32lfnshr8k0p4xfyju2knwq2qgmh2",
        "msg": "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",
        "funds": []
      }
    }
  }
]
1 Like