Dear Neutron users,
We, the Equilibrium team, are making this proposal in response to Build the Interchain Allocator’s Rebalancer on Neutron.
Equilibrium is the winning project at HackWasm 2022 in Medellín, Colombia; it is an auto-rebalancing protocol that allows protocols and users to create weighted portfolios of Cosmos assets. Creating these portfolios is enabled by the Abstract and CronCat protocols and supports a multitude of assets with configurable allocations.
In the Atom 2.0 whitepaper, the Rebalancer is described as “a system for automatically managing asset portfolios with public liquidity.” Equilibrium can provide this functionality as well as allowing for rebalancing of private liquidity.
We believe that the Neutron team and community will find that this proposal strongly aligns with Neutron’s core values of robust, open source, permissionless software; and that Equilibrium is in the prime position to deliver the Interchain Allocator’s Rebalancer to Neutron and the Atom Economic Zone. All within a shorter time frame and at a much better price point.
Equilibrium proposes to build & deploy a prototype Rebalancer to Neutron Testnet within the next 6 weeks and to deploy the Rebalancer on Neutron within the next 6 months:
- 0.10% of Neutron supply up front
- 0.08% of Neutron supply on prototype completion
- 0.15% of Neutron supply upon delivery, unlocked linearly over 2 years (backdated)
Equilibrium enables protocols and users to set a desired portfolio allocation (e.g., 75% $NTRN, 25% stablecoin) and automatically rebalance the portfolio to remain at the desired allocation as prices fluctuate. Redundant rebalancing is mitigated through CronCat’s query-triggered actions, which allows rebalancing to only occur when required. A TBD price-oracle will be employed to protect against malicious price manipulation.
Through usage of the Abstract platform, Equilibrium contracts are lightweight, secure and extremely cheap to maintain. They are highly composable and allow for rapid deployment and iteration.
Contracts from Abstract as well as CronCat have been audited by Oak Security:
Users across the Interchain will be able to buy into portfolios created by other users or entire protocols exclusively on Neutron. 25% of the fees generated from these transactions will go directly to the Neutron community pool, benefiting not only Neutron but also its provider chain, the Cosmos Hub.
Fees will be divided as follows:
- 50% to the Equilibrium DAO
- 25% to the Neutron community pool
- 25% to Abstract, as a platform fee
New capital entering the Cosmos ecosystem can easily gain exposure to baskets of the most influential Cosmos projects through an Equilibrium portfolio. Through this new mechanism of diversified investment, new Neutron projects will have a greater chance of attracting large investment and liquidity.
The Atom Economic Zone is poised to magnetize fresh MEV value. Thanks to the intrinsic functionality of cross-chain swaps, Equilibrium introduces a natural habitat for MEV opportunities that get activated every time portfolio rebalancing is set into motion. Our deliberate decision to build the Rebalancer on the Neutron platform guarantees a direct profit line for Neutron’s blockspace value from all Equilibrium transactions.
Because Equilibrium contracts are composable, external protocols can easily innovate upon the rebalancer contract, enabling $SPX-style portfolios with functionality that is beyond the scope of the base Equilibrium contract.
At Equilibrium, we’re laying the groundwork to synergize our efforts with the Timewave team to accelerate the Rebalancer’s market introduction. Undeniably, Timewave carries an esteemed reputation as thought architects within the Cosmos ecosystem. Although we have faith in Timewave’s potential to successfully commercialise a Rebalancer product, we’re also convinced that our team stands a higher probability of realising this product to its fullest potential. Hence, we’re suggesting an innovative plan of action. We propose that, once the Rebalancer is successfully constructed, and following the approval of a fresh Neutron proposal, Timewave transitions into the role of de facto promoters for the Interchain Allocator’s Rebalancer product. It’s a strategic move designed to make the most of our collective strengths.
Should Equilibrium fail to deliver the Rebalancer within 6 months, or displease the Neutron Community in any way such that they vote to cancel the proposal, we will respect the voice of the Neutron community.
Our team has years of development experience in Cosmos and beyond, and have contributed to a multitude of public goods projects throughout the Interchain, as well as winning the HackWasm 2022 hackathon.
Adair Kelley: Co-founder of Abstract, top contributor to Cosmology and ts-codegen, prev. Amazon Web Services.
Robin Bisschop: Ideator and co-founder of Abstract, creator of cw-orchestrator, prev. CTO at White Whale, launched flash loan vaults on Terra.
Josef Leventon: Co-founder of Swift Protocol, lead front-end eng. Mesh Security, prev. Stargaze.
Jake Hartnell: Co-founder of Juno, Stargaze, DAO DAO, general partner at Analog Interchain, and maintainer of key infrastructure such as cw-nfts.
Ethan Frey: Creator of CosmWasm, founder of Confio, early contributor to Cosmos.
A major part of the funds requested in this proposal will be used to hire additional team members to bring the Equilibrium vision to fruition.
3.3M NTRN total
- 1,000,000 NTRN upfront
- 800,000 NTRN on prototype completion
- 1,500,000 NTRN on delivery, unlocked linearly over 2 years, backdated to the proposal passing
Funds will be overseen and spent by the Equilibrium DAO.