Neutron is one of the most popular and frequently utilized chains in Cosmos. This thread unveils the fundamentals of Neutron while also revealing things that a significant portion of the community might be overlooking at the moment.

What is Neutron?

Neutron is a general-purpose L1 platform that enables developers to launch their dApps permissionlessly using CosmWasm. This means that anyone can create and deploy their quality product or even a degen dApp on-chain for the community to use, while leveraging the superpowers of CosmWasm! CosmWasm, currently utilizing Rust and possibly more languages in the future, offers significant benefits through its smart contracts, including high performance, increased security, and easier deployment and upgrades.

This means that it can leverage IBC, enabling it to be an exceptionally interoperable chain. IBC serves as a "language" that enables different chains to communicate without the need for risky third-party bridges.

Neutron is also the first ever shared-security chain of Web3 (consumer chain). It doesn't have its own validators or a staking token, but all of its security comes from the validators of the well-established and secure dPoS of the Cosmos Hub. As a result, it is more secure than any other chain in Cosmos (same as Cosmos Hub and other consumer chains), making it a great option for builders to deploy on the IBC ecosystem.

In simpler terms, Neutron is like the playground of the Cosmos Hub (or the Atom Economic Zone ecosystem in general). The Cosmos Hub handles the "boring" tasks, while Neutron is where all the useful, funny, silly, or wild things are created!

As a Cosmos chain, Neutron also features a cool functionality called IBC! It enables communication with other chains (currently limited to Cosmos SDK chains) and facilitates the transfer of assets and messages in mere seconds, all in a trustless and secure manner. With no requirement for risky and slow third-party bridges in Cosmos, Neutron can serve users from other chain environments without them even realizing it! IBC is the kind of technology that makes the Web3 experience user-friendly, and leads to real chain abstraction.

However, in Web3, performance, security and cool features are not the most important factors. What matters the most is liquidity and a strong community. As we'll see below, Neutron has both!✌️

The ecosystem.

Its convincing liquidity and CosmWasm's superpowers have led to many great dApps landing on Cosmos Hub's execution layer (Neutron) already!

Firstly, Astroport has achieved great success on Neutron, reaching almost $60M in TVL. Astroport's user-friendly interface, making it easy to create a pool and add liquidity, has led to the emergence of many new tokens and memecoins on Neutron (for example, $NEWT and $BADDOG). At first glance, memecoins may not seem significant, but this space has repeatedly proven that memecoins are a form of community culture and strength. The volumes generated and the hype shared across media show that Neutron is one of the cosmos community's favorites.

Neutron is often referred to as the "Lido-chain." This is because it serves as the hub that Lido connects to in order to distribute staked Ethereum liquidity to Cosmos. While wstETH is the wrapped version of liquid staked ETH, Lido is a battle-tested provider. The partnership between Neutron, Axelar, and Lido to bridge wstETH to Cosmos from Ethereum in a controlled and secure way makes wstETH one of the safest bridged assets in Cosmos, if not the safest.

There are a couple of other exciting projects on Neutron such as EclipseFi (launchpad), Nolus (leasing protocol), Red Bank (Lending protocol), DaoDao (create your own DAO in seconds), Isaac (telegram trading bot). Of course, there are some confirmed cool projects on their way such as Amulet Finance (self-repaying loans), Craft Marketplace (NFTs), Astromint (decentralized stablecoin), and Velo (predictions market).

Last but not least, Neutron, Kujira and Manta DAO recently collaborated to provide $1.2m in Protocol Owned Liquidity on Astroport and BOW. This collaboration will sustainably deepen liquidity for $NTRN, $KUJI, $MNTA, and $USK across the ecosystems, resulting in a net increase in trading volumes on both sides. Neutron's DeFi ecosystem is growing, and this partnership could be a great step forward.

The Grants Program.

Neutron has launched a grant program (many of the projects mentioned were funded by Neutron). The goal is to make Neutron the main DeFi Hub in Cosmos, and the Neutron Grants Program’s areas of focus will facilitate that in various ways. While initiatives like these exist in many blockchains and ecosystems, what's notable with Neutron is that the grant program is managed by a specific structure and composition (known names and entities), KPIs, and transparency reporting. Drawing lessons from the past, community voting for grants has proven to have many mistakes and flaws.

The Neutron pioneers seem to learn from others' mistakes, and the community supports them (the grants program is approved by governance). The grant program has much in detail, so if you'd like to read about it, check it out here.

Innovations.

Neutron doesn't solely depend on existing tech stacks; it has already made significant contributions to the cosmos stack, empowering its builders with... superpowers! Let's see some of them 👇

➡️Interchain Transactions
The Interchain Transactions module manages the creation of IBC Accounts and executing interchain transactions on behalf of CosmWasm smart contracts. (similar to Interchain Accounts but for dApps).

➡️Interchain Queries
The ICQ module implements a mechanism to retrieve data from remote chains connected to Neutron via IBC! Neutron dApps can now "ask & learn" what they need, even if that's outside-Neutron information.

➡️Cron Module
Cron module implement a mechanism to add cron schedules through governance proposals to execute arbitrary cosmwasm messages with given period. The network itself can guarantee the execution of certain DeFi functions without relying on incentivizing third-party bots or trusted third-parties for automation.

➡️Packet-Forward Middleware & IBC Hooks
This extensive cross-chain support allows applications built on Neutron to serve user bases across different networks and ecosystems (such as Cosmos, Polkadot and Avalanche) expanding their reach and utility.

While these technical details can mean a lot to end-users as they make their user experience a lot smoother, they can also serve as signals to investors that the developers behind Neutron are highly skilled.

You can always check what Hadron (Neutron's core team) does since all of their work is open-source and documented before it even gets into production! If you're curious, dive in here.

Tokenomics.

Neutron has unique tokenomics that you'll likely find appealing. It doesn't have inflation because it doesn't need to "reward" anyone for keeping it secure (the Cosmos Hub already handles this for Neutron). What's remarkable is that what you currently own will only become scarcer over time. As the network sees more usage (for instance, through the use of dApps), more tokens are burned, permanently reducing the circulating supply! Of course, this procedure is slow and depends heavily on the network's success.

The total supply is 1 billion tokens, and more than 100,000 of them have already been burned! Out of the remaining 999.89 million tokens, 133.5 million belong to the community pool!

The tokenomics primarily affect investors, and I only wanted to highlight the burning mechanism. Make sure to conduct your own in-depth research here if you're considering investing in Neutron.

Thanks for reading!

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