Timewave Quarterly Report #2: February 14, 2024 — May 13, 2024

Dear Neutron Community,

We will keep this quarterly update shorter to make it more digestible. Please respond in the comments if you would like additional detail on any of our initiatives.

1. Covenants

Oak Security audited our Covenant System and we recently finished incorporating their findings. Covenants are now ready to handle protocol-to-protocol deals on mainnet. We’re hoping to help Neutron make more history by being a party in the first ever trustless protocol-to-protocol deal. Will the counterparty be Nolus, Shade, Stargaze, or a different protocol? We’ll find out soon.

Covenants support token swaps, liquid staking, single-party protocol-owned liquidity (POL), and two-party POL. It also optionally allows for fixed price fluctuation tolerations, deposit durations, lockup durations, ragequitting for a fee, and various liquidity ownership structures. Covenants are compatible with Stride and Persistence liquid staking and with Astroport and Osmosis DEXs.

2. Rebalancer

Our Rebalancer is live on mainnet in private beta. We have been dogfooding it ourselves by managing Timewave’s onchain assets and we plan on onboarding at least one external user this quarter.

3. Valence

We began work on Valence, which is a protocol that will unite Covenants and Rebalance into a single integrated whole. Covenants machinery will become a subsystem of Valence Protocol that will initiate protocol-to-protocol deals and Rebalancer machinery will become a subsystem that maintains deals over time. Stay tuned for additional details.

4. Liquid restaking

Liquid restaking protocols (LRTs) are a promising avenue for Valence’s go-to-market strategy because liquidity is becoming an increasingly essential aspect of shared security deals. We spoke with many LRTs and identified issues with nearly all of them that can be overcome with several relatively straightforward design changes. We published this blog post to help guide LRTs toward making these design changes to help add more value to their depositors and AVSs.

Wrapping Up

If you are a member of a protocol (e.g., blockchain, dApp, DAO) that is interested in doing business with another protocol, we’d love to hear from you.