[APPROVED] [PROPOSAL #19] Make Neutron Timewave’s Home Through Long-Term Incentive Alignment

Dear Neutron community,

Timewave’s first proposal ultimately did not reach quorum due to a number of technical difficulties. While unfortunate, we’ve worked with the Hadron team to fix a number of these issues and these issues were not wholly unexpected when using a novel governance system. With these challenges behind us, we have made a few revisions to the proposal to incorporate constructive feedback from the community.

The key concern we heard was the portion of the token supply Timewave was seeking at this early stage for Neutron. Responding to this feedback, we have cut our token request in half and reduced the duration in a commensurate manner.

Also, since posting the last proposal, we have spoken with the Hadron Team and other community members about additional scopes of work they are interested in our help with. Examples of this work include custom covenants between Neutron and several potential partners, as well as a user interface for the public good infrastructure mentioned below. Because the tokens in this proposal are meant exclusively for long-term alignment with Neutron, we may approach the Neutron grants DAO for service agreements specifically scoped for this custom work.

Thank you for the constructive feedback you shared on this forum, in the Twitter space, in group chats, in DMs, and in-person conversations. We want the Neutron community to be as excited about this partnership as we are and believe these new terms will set Timewave and Neutron up for greater long-term success.

Change Log

  • [September 14th, 2023] Original post
  • [October 8th, 2023] Extended unlock and revenue share periods from 18 months to 24 months and reduced guaranteed amount from 0.17% to 0.125%


We, Timewave, are a team primarily composed of co-authors of the Cosmos Hub white paper. There are several Interchain institutions that we are interested in building, including the Interchain Allocator, and we are seeking a community with which to partner to build these institutions and invent new ones. This proposal is for Timewave to enter into a long-term, incentive-aligned partnership with Neutron to make Neutron Timewave’s primary home, which would lead Timewave to work on endeavors that are directly and/or indirectly value accretive to Neutron, such as the Rebalancer, Covenants, and public goods funding infrastructure.

We are reaching out to Neutron with this partnership proposal because of our cultural alignment with Neutron in building robust permissionless software, our belief that Neutron can serve as a best-in-class technical platform on which to build the Allocator, and because a Cosmos Hub-secured Neutron can be an effective attractor of liquidity.

With this proposal, we seek to align on terms and expectations for an enduring partnership.

Summary of proposed terms:

Timewave to:

  • build its flagship products on Neutron, including the Interchain Allocator

  • share 20% of Allocator revenue with Neutron for the first 24 months

Neutron to issue Timewave tokens on the following schedule:

  • 0.00% of Neutron token supply upfront

  • 0.125% of Neutron token supply unlocking at the end of month 6

  • 0.375% of Neutron token supply unlocking linearly over months 7-24


Timewave believes that crypto has laid the foundation for permissionless digital institutions that enable humanity to collaborate with unprecedented scope and scale. We have strong ties to the Cosmos ecosystem, deep knowledge of the tech stack, and are best positioned to execute on the vision outlined here. Our core team includes:

Max Einhorn: Lead architect of Interchain Allocator, interchain maxi since 2017, former financial services management consultant at Oliver Wyman, and Wharton finance.

Sam Hart: Formerly Board of Management, Grants Manager, and Cosmos Stack Product at ICF; wrote Cosmos Hub white paper; currently Head of Product and Strategy at Skip.

Udit Vira: Co-founder at Hypha Coop, leading Replicated Security testnets, managed Game of Chains and helped bring ICS to Neutron’s Baryon and Pion-1 persistent testnets, engineer and governance consultant for many decentralized communities.

Timewave’s First Contribution to Neutron: Interchain Allocator

The Interchain Allocator was initially described in the Cosmos Hub white paper. The Allocator is an internet-native institution that seeks to play a leading role in advancing crypto as an alternative financial system. Timewave is the team leading the buildout of the Interchain Allocator, intending for it to enable permissionless collaboration with unprecedented scope and scale. In our vision, all who endeavor to grow the interchain are limited not by tools or resources, but only their own imaginations.

The Allocator is initially composed of two components: Rebalancer and Covenants.

Rebalancer: The minimum viable implementation of the Rebalancer will enable protocols to set a desired portfolio construction (e.g., 75% native token, 25% stabletoken) and automatically rebalance the portfolio to remain at the desired construction as prices shift.

Covenants: The early implementation of the Covenant system will enable protocols to 1) swap tokens, 2) convert tokens into liquid-staked tokens, and 3) create liquidity provider (LP) tokens with a timelock.

While these two primitives start simple and independent, we intend for the primitives to evolve toward one another. The Covenant system will become a general-purpose initiator of DAO-to-DAO economic relationships while the Rebalancer allows DAOs to more easily manage internal resources and foreign economic policy. The primary form of economic relationship the Allocator seeks to foster is liquidity sharing between DAOs (e.g., Cosmos Hub lending ATOM liquidity to Neutron).

The Interchain Allocator is an inherently multichain institution. As such, pieces of the Allocator may be built in the Cosmos SDK or outpost contracts on other chains. Timewave commits to making Neutron the default chain upon which to build Allocator components and only build elsewhere when there is a positive-sum reason to do so. Additionally, components of the Allocator generate network effects, benefit from liquidity aggregation, and will be difficult to effectively fork elsewhere. While we’re interested in a long-term partnership regardless of what we build, these characteristics of the Allocator make a long-term partnership even more appropriate.

Allocator’s Value Proposition

The Allocator will add value to Neutron in the following ways:

1. ATOM liquidity

Attracting ATOM liquidity would enable Neutron to outcompete incumbent Cosmos power centers that already have significant liquidity. By using the Allocator to develop economic ties with the Cosmos Hub—the chain/community with the most liquid and valuable token—Neutron increases its chances of success.

By building the Allocator on Neutron, Neutron would be well positioned to lobby the Cosmos Hub for ATOM liquidity. In return, MEV originated by the Allocator is shared with ATOM stakers as per the replicated security agreement between Neutron and the Hub.

2. Increase Neutron MEV revenue

While we will prioritize our customers by doing everything we can do to get them the best possible execution, some transactions will inevitably result in MEV opportunities. As currently designed, the Rebalancer will host regular Dutch auctions to rebalance treasuries to their desired compositions. By building the Allocator (including the Rebalancer) on Neutron, we would route all of the orders to auctions that take place on Neutron, thus increasing the value of Neutron’s blockspace and increasing MEV opportunities.

MEV is especially valuable because replicated security is unprofitable for some validators. Increasing MEV opportunities would decrease pressure on Neutron to subsidize validators with Neutron tokens.

3. Solidify Neutron as Cosmos power center

The Allocator was one of the most popular elements of the Cosmos Hub white paper and the first piece that Polkadot embraced. It is widely considered to be the next natural step in the story of the ATOM Economic Zone. By choosing to build the Allocator on Neutron, the Allocator will act as a powerful social signal as Neutron seeks to recruit blue-chip projects. The Allocator validates Neutron as the premier DeFi platform of the Interchain.

4. Attract new capital to Neutron

The Allocator not only seeks to improve protocol-to-protocol coordination and treasury management—it also seeks to become the primary entry point for new capital to enter the Cosmos ecosystem. New non-retail capital primarily enters Cosmos via venture capital investment into new projects or follow-on investments via growth capital. Venture and growth capital are two small sources of capital relative to the financial markets as a whole and there are not enough viable venture- and growth-style investment opportunities to absorb the many billions of dollars seeking deployment into crypto. The Allocator is an excellent tool for anyone to use to structure new financial products that cater to new funding sources.

5. Demonstrate Neutron’s capabilities

One of Neutron’s key advantages relative to incumbents will be cutting-edge cross-chain features, such as interchain queries. The Allocator is a set of inherently cross-chain primitives. By building the Allocator on Neutron, Neutron would immediately have an experienced team building a flagship product that demonstrates the capabilities that are available for teams that choose to build on Neutron.

Example of Timewave’s Value Beyond the Allocator: Public Goods Funding on Neutron

As an early example of the value that Timewave seeks to bring to Neutron beyond the buildout of the Allocator, Timewave is collaborating with core Neutron teammates and other Cosmos core teams to make Neutron a major home for Interchain public goods coordination and funding. Timewave is helping to make this happen by architecting a public goods funding solution that is inspired by Protocol Guild. By making Neutron the primary home for a Protocol-Guild-like solution, Neutron would ensure that its voice is heard when seeking to build public goods that Neutron is especially interested in and Timewave would benefit by gaining additional users for the DAO-to-DAO tooling that Timewave is developing via the Allocator.

The Allocator and this public goods funding solution are just the first two ideas that Timewave is bringing to Neutron. By entering into this partnership, Neutron would attract Timewave’s mindshare, which would likely lead to new ideas and products that are uniquely enabled by working together.

Key Performance Indicators (KPIs)

1. Covenant

a. Number of covenants made

b. TVL of liquidity shared via covenants

c. TVL of liquidity shared via covenants on Neutron-based DEXs

d. TVL of NTRN-paired liquidity shared via covenants

e. Market share of blockchain-to-blockchain liquidity sharing

2. Rebalancer

a. Number of DAOs using the Rebalancer

b. Volume of swaps made via the Rebalancer

c. Net purchase of NTRN made via the Rebalancer

d. Market share of DAO treasury management

e. Execution quality relative to other Cosmos DEXes

3. Public goods

a. Number of grants made via Neutron-based funding system

b. Amount of public goods funding directed via Neutron-based funding system

4. M&A

a. Number of M&A deals facilitated by Timewave teammates

b. Size of M&A deals facilitated by Timewave teammates

c. Return on investment on M&A deals facilitated by Timewave teammates

d. Number of developers attracted to Neutron to build upon the Allocator and other Timewave-supported institutions

Timewave will provide quarterly reporting on these metrics to the Neutron community.

Proposal Terms

Timewave to:

  • build its flagship products on Neutron, including the Interchain Allocator

  • share 20% of Allocator revenue with Neutron for the first 24 months. Timewave’s revenue share exclusively applies to revenue generated from usage of the Allocator (e.g., Rebalancer fees and Covenant fees). This excludes grants, investments, and other income that Timewave may receive.

Neutron to issue Timewave tokens on the following schedule:

  • 0.00% of Neutron token supply upfront

  • 0.125% of Neutron token supply unlocking at the end of month 6

  • 0.375% of Neutron token supply unlocking linearly over months 7-24

Timewave will have full voting power during the token transfer restriction period. Timewave will only be able to vote if/when delegations are enabled.

Termination Clause: The Neutron community may terminate the vesting of tokens to Timewave if Timewave leaves the Neutron community, builds core Allocator components on other chains that it could have built just as easily on Neutron, terminates revenue share, or fails to generate meaningful value for the Neutron network. Deploying components such as outposts on other chains would not qualify as a breach because they add value to the Allocator, thereby adding value to Neutron. If Neutron terminates prior to the end of month 6, Timewave will still receive 0.125% of Neutron token supply at the end of month 6. This compromise addresses Neutron’s concern of preventing early token dumping while also helping to strengthen Timewave’s negotiating position with investors in case Timewave is unable to secure a grant to pay for the first 6 months of development.


Thank you for considering our proposal to enter into a long-term, incentive-aligned partnership. We hope that we have clearly articulated why it is in both of our best interests to work together and that you agree that we have proposed fair terms. We welcome any questions you may have.



Max Einhorn: @max_einhorn

Sam Hart: @hxrts

Udit Vira: @uditvira


Thanks for the revisions all.

Since Timewave is asking for a large supply with advantageous unlock compared the community who put money into the liquidity bootstrapping program and time-locked for a year I would still like to see an “option to invest $1MM @ $15 MM post money cap” given to the Neutron DAO as part of this proposal if TImewave goes on to raise funding. The precedent set by Astroport re: the mutual benefit and long term alignment with the DAO in the swap of shares helps us all build something big together. If the DAO chooses not to fulfill the option that will the a decision but I think it would get the community over the hump on the proposal.


Acknowledging I may be a little late on this, but does this not alarm anyone else?

This is a trade offer for ~1.5 -3m USD worth of NTRN for 20% of rev share for 2 year on a product that can’t possibly return that nor has a highlighted business value.

On top of that you get grants?

Am I missing something or is this all accurate?


This is day 1 of my Cosmos ecosystem exploration and if this is normal in Cosmos, please let me know. I’m more familiar with the EVM ecosystem.

…and if this is normal. I will 100% be putting a team together to leverage these same benefits. :muscle:

Hi @protonaf, we explored various ways to structure an investment with Neutron, but all of the options added significant complexity given Timewave’s and Neutron’s current legal structures and would delay our work together by months. We are open to deepening our financial alignment in the future. In the meantime, we have extended the lockup and revenue share durations from 18 months to 24 months and reduced the guaranteed amount of tokens from 0.17% to 0.125%. We hope that these changes are enough to earn your support for this proposal.

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Hey @DeFi_Chad , while the 20% revenue share is designed to deepen financial alignment, we did not bother mentioning the revenue share in our value proposition section because the other elements (attracting ATOM liquidity, increasing MEV, solidifying Neutron as a power center, attracting new capital to Neutron, and demonstrating Neutron’s capabilities) would likely significantly exceed the revenue share in value.

While we are a relatively new team, our team is composed of core Cosmos contributors that have years of experience working with every layer of stack. We also have long-standing relationships with core Neutron community members, some of which began prior to Hub prop 72. We are offering to build our core products on Neutron and forgo building our own chain—the amount we are requesting is designed to compensate for this opportunity cost and align our incentives.

As for the grants, they would only apply if the Neutron community wants us to build products/functionality that would take resources away from Timewave pursuing our core roadmap. Timewave pursuing our core roadmap would generate the value mentioned in the value proposition section.

All that said, if you’re interested in putting a team together to grow the pie, we’d be happy to help.

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Have you tried to justify the value exchange for the tokens?

How do you quantify MEV, attracting new capital etc? How did you settle on 1-2m USD worth of tokens?

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And Is this type of token alignment incentive open to any team? I am genuinely interested in pulling together a few people as this is quite an enticing offer.

Perhaps @Spaydh is a better person to ask, judging by the activity in this forum I assume he is part of the core team?

Let’s do it. I don’t want to hesitate wait or pull punches, let’s do it. Let’s make the alligator a reality on neutron and get these teams incentive vibing.


Here’s something that makes people uncomfortable early on as investors: you really don’t invest in products.

You invest in the people building the product. You invest in their ability to adjust to the market as circumstances dictate and and even to adapt the product entirely if need be.

I think these guys can do that.


Nice to see you guys taking the feedback and trying again. Neutron, and the Hub by proxy, need strong teams that want to align over the long term rather than just come in for a paycheck and disappear.

This is an easy Yes for me.