Neutron has powerful financial primitives: Supervaults for CEX-grade execution and liquidation backstops, Mars for cross-collateralized perpetuals, and Amber for isolated lending.
But powerful primitives do not suffice for fully fledged markets to form - that also requires liquidity and lending supply.
On-chain activity today is dominated by two trades: leverage looping and basis trading. Together, these represent billions of dollars deployed on Aave, Morpho, Euler, and similar protocols. Yet Bitcoin is underserved in this space because there is no sustainable, real-yield BTC derivative to use as collateral, and no perpetuals venue designed to accept such collateral.
With the launch of maxBTC, Neutron can fill this gap. A focused, multi-epoch campaign can bootstrap the liquidity and lending supply needed to make Neutron the primary venue for leverage looping and basis trading on Bitcoin.
Summary
This signaling proposal seeks approval from the Neutron DAO to launch and fund Bitcoin Summer, a multi-epoch incentive program designed to establish Neutron as the leading venue for Bitcoin finance.
The program authorizes an envelope of 100,000,000 NTRN, to be distributed through per-epoch funding requests. Epochs last two months, with budgets set in USD terms and later converted to NTRN at the end-of-epoch TWAP.
The first batches may be co-funded from the Joint Committee’s allocation under Prop 993. Approval of this proposal ratifies both the funding envelope and the campaign design, enabling the bootstraping of liquidity, lending supply, and adoption of BTC-based trades on Neutron.
Value to Neutron
Bitcoin Summer positions Neutron to capture and lead the BTC yield and leverage-looping market.
If successful, the campaign will significantly expand Neutron’s TVL and transaction volume, while opening new monetization streams across transaction fees, vault fees, trading fees, ecosystem app revenue share, and more. Under Neutron’s deflationary tokenomics, these revenues would accrue to Neutron’s Bitcoin treasury and drive ongoing NTRN burn.
By further reducing the circulating supply of NTRN, the Boost mechanism is designed to reward long-term aligned holders, ensuring they capture the largest share of campaign benefits.
Together, these dynamics create a self-reinforcing flywheel: as the demand for BTC yield increases, the circulating supply for NTRN decreases, making it more scarce and more valuable.
Detailed Proposal
Ratify the program envelope
Authorize a maximum envelope of 100,000,000 NTRN for Bitcoin Summer, to be distributed in per-epoch installments over the next 12 months. Each Epoch and its budget will be approved and funded by the DAO via subsequent proposals.
The first batches will be funded by the Joint Committee allocation from Prop 993.
Ratify the campaign design
Overview and partners
Bitcoin Summer is a multi-epoch program that pays dollar-denominated rewards for deposits into defined BTC positions on Neutron. Rewards are accounted in USD and converted to NTRN at the end of each epoch.
Partners include:
- Asset issuers: Structured, Bitglobal, Lombard, Etherfi, Solv, Bedrock, Pump. Asset Issuer Partners have committed additional rewards to be distributed as part of the campaign.
- Infrastructure: Valence (vault logic), Interchain Labs (IBC Eureka bridging)
Understanding Epochs
The campaign is structured in consecutive Epochs, each lasting 2 months. We propose to run at least 6 epochs, more if the campaign is successful and is approved by the DAO. To provide campaign participants with visibility, the following parameters are fixed before the start of each epoch:
- The dollar value to be distributed as incentive during each tranche
- The list of campaign vaults
- The list of eligible DeFi positions and their multipliers
Budgets are fixed in USD per epoch, then settled in NTRN at end-of-epoch TWAP. The initial tranches will have lower budgets to account for lower initial visibility, and later tranches will have larger budgets to help scale the campaign.
Epoch 1 parameters
- Budget: $250,000
- Eligible assets: MaxBTC, wBTC, LBTC, eBTC, SolvBTC, uniBTC, USDC.
- Target positions: correlated BTC liquidity on Supervaults; isolated lending supply on Amber; wBTC and USDC lending on Mars; and participation in maxBTC Batch 2 through Structured’s KYC vaults.
- Fees: No vault fee, except a 2.5 bps deposit and withdrawal fees to cover Eureka bridging costs and prevent gaming the vaults.
Reward mechanism
Rewards are distributed to users who deposit into eligible DeFi positions either directly on Neutron, or remotely via the Ethereum campaign vaults. Points are used as an accounting mechanism to facilitate the distribution of rewards to all depositors and account for boost multipliers.
NTRN rewards are distributed on a “forfeitable” or “soft-lock” model, meaning that while depositors can withdraw their principal at any time, doing so before the end of the current epoch forfeits the portion of rewards generated by that capital during the epoch.
At the end of an epoch, each user’s entitlement is converted to NTRN at the TWAP price and made available to claim. When claiming, users can select their preferred claiming style:
- Lock & Boost: Lock the rewards for up to 4 years to increase their reward multiplier in future epochs
- Vest: Linearly vest the tokens over 2 months to receive 100% of the rewards.
- Instant Claim: Forfeit 50% of the rewards to claim the rest instantly. Forfeited tokens are returned to the campaign budget.
Boosts
Users can amplify their rewards by depositing more capital or by collecting Boosts. Boosts apply a multiplier on the user’s rate of reward, enabling them to accrue up to 3.25x more NTRN rewards on their deposits. There are two sources of boost:
- Locking NTRN: Lock NTRN up to 4 years to receive up to 3Ă— boost. Locked NTRN is liquid-staked with Drop to receive staking yield and potential additional rewards such as Droplets. Users who lock NTRN receive a Receipt NFT, which is transferrable and represents their locked amount and duration
- NFT boosters: Hold Collection NFTs from specified collections on Neutron to secure up to 0.05x boost per collection, stacking for up to five collections for a total of 0.25x. NFT Boosters will not be available in Epoch 1 and are expected to launch with Epoch 2.
Once a user has obtained Collection NFTs or Receipt NFTs, they must stake these NFTs to the Boost contract and designate an address to boost (e.g. the address from which they deposited to eligible positions or vaults, either on Neutron or Ethereum). This is used to allow users who have deposited BTC TVL from Ethereum to choose their EVM address as the recipient for the boost. A given NFT can only be used to boost a single address.
Campaign Vaults (Ethereum → Neutron)
Campaign Vaults are designed to simplify depositing capital from Ethereum. They are completely optional: users who wish to optimize their DeFi allocations and Boosts are encouraged to deposit directly from Neutron rather than remotely through vaults.
Most Campaign Vaults accept a single Deposit Asset and charge a 2.5 bps Deposit Fee to cover bridging costs. They then bridge deposits via Eureka and deploy them to specific Amber, Mars, and/or Supervault positions in order to earn market making spreads and lending rates, NTRN rewards, Asset Issuer Rewards and more.
Withdrawals can be initiated on Ethereum at any time by burning vault shares (e.g. no lock up), but withdrawing before the end of an Epoch forfeits the portion of rewards generated by the withdrawn TVL. Withdrawals are processed by transferring the vault’s underlying positions to the user’s Neutron address.
Bespoke Structured maxBTC Vaults
Epoch 1 will feature 2 bespoke vaults in partnership with Structured (the issuer of maxBTC): The maxBTC Deposit Vault and the maxBTC Liquidity Vault. The former simply mints maxBTC, but receives no/limited incentives, while the latter provides all minted MaxBTC as liquidity to the MaxBTC - wBTC Supervault to generate trading fees, and receives boosted rewards.
Structured Vaults are subject to a few additional requirements:
- KYC: Depositing into the Structured Liquidity or Deposit Vault requires completing KYC with zkME and minting a cryptographic credential on Ethereum. This does not reveal any information about the user on-chain.
- Lock up: The Structured Liquidity Vault is subject to a principal lock-up until the full launch of Structured protocol, expected later this year.
Implementation
We propose to fund the distribution first via the Joint Committee Treasury, then via direct proposals to the Neutron DAO for each epoch.
The Joint Committee was established by Prop 993 / Mercury. It governs a ~9M NTRN allocation via 3/4 multisig with the following signers and addresses, on both Cosmos Hub and Neutron:
| Signer | Role | Address |
|---|---|---|
| Travis | Cosmos Hub Community Representative | cosmos1hpqgpfsrkqawzjjgql47rrrvkqrry49sxpda7q |
| Agent Kwosh | Cosmos Hub Community Representative | cosmos1945wsvenrnc6vu0p588jswpc56pv27l3kp0aae |
| Luisqa | Neutron contributor | cosmos1ze09kc5ackut7wc4pf38lysu45kfz3ms86w3em |
| Spaydh | Neutron contributor | cosmos1nu7h4xj3em8mr0huh7906qdv89fnxclr7jy8wy |
- Cosmos Hub multisig:
cosmos1fl657t883v2l3s953qngd26wn49v8eddygw9rc44v5ms0cxfwk4qddhuhx - Neutron multisig:
neutron1gxwkypgj884n2gswk3km0ck5js36eqewgx94lxv0pw45w0q6utrsgj4u50
This allocation was earmarked for joint incentives to Hub-related assets and initiatives, such as Eureka bridged assets which Bitcoin Summer leverages. It is sufficient to fully cover the proposed budget for Epoch 1.
Governance votes
YES — You approve of the campaign design and the overall 100M NTRN envelope. You support the submission of funding proposals for future Epochs.
NO — You rejects the campaign and/or its funding envelope and oppose any future funding.
ABSTAIN — You wish to contribute to the quorum but you formally decline to vote either for or against the proposal.