November 29, 2023
In September 2022, we presented our thesis on why Cosmos offered the best architecture to build DeFi products on top of. Specifically, we argued that appchains offer a set of intrinsic advantages that make them the more likely architecture to win over the long run. These advantages include lower and more predictable costs (better UX), sovereignty (lower platform risk), higher value capture (since no revenue leaks to the underlying layer) and customizability. These features, if used correctly, should allow appchains to offer innovative, highly differentiated products that are better than what’s possible to be delivered as standalone applications on top of an L1.
We believe the appchain thesis as a whole remains as strong as ever. What has changed since we wrote that thesis, however, is the appchain infrastructure competitive landscape. In particular the Ethereum ecosystem has developed attractive alternatives for those seeking the benefits of customisation such as OP Stack, ZK Stack, and Polygon Supernets. Given accelerating adoption of these alternatives we believe Cosmos has a short window of opportunity to react and not be overshadowed by Ethereum in a paradigm in which it had the initial advantage.
We believe more consolidation, collaboration, and alignment is necessary within Cosmos to compete. Specifically, it’s necessary for the key teams to align around a shared vision, and collaborate to achieve it.
Mars and Neutron have synergistic visions:
Mars intends to build the winning DeFi super-app. An app that allows users to access the best of DeFi from a single, delightful UX: from spot and margin trading, to perps, to DeFi-native yield generating activities. An app that can rival and outcompete the best CEX experience.
We believe Neutron is the best platform to build Cosmos apps, providing many of the benefits of an app-chain without the cost, and providing features enabling apps to be better.
While both Mars and Neutron have worked closely together during the last few months, we believe there’s an opportunity to strengthen the bond between the two projects and further align efforts. Deeper collaboration between both projects will allow both Mars and Neutron to achieve more.
Neutron can benefit from having a flagship DeFi project and a core leverage primitive to build an ecosystem around which wouldn’t be possible without Mars. Having Mars v2 deployed on Neutron can open up a host of opportunities such as:
Mars can leverage synergies to achieve its ambitious vision faster by focusing efforts on one chain while spending less time on infrastructure. Particularly when working in tandem with a synergistic chain such as Neutron.
To date, Mars has pursued a multi-chain model that requires additional resources and effort to implement and maintain. However, given our belief in the need for a new strategy within Cosmos, we no longer feel that this is the best approach. Specifically, we believe that focusing efforts on a single chain, at least in the medium term, while not maintaining Mars Hub, offers Mars the best chance to succeed. This positions Mars such that it only needs to commit to a single home while still serving the entire Cosmos.
Per the proposal:
The Mars Protocol Foundation will also commit to proposing and supporting migration of the Mars Governance from Mars Hub (Mars’ governance chain) to Neutron, and will further commit to proposing and supporting the following targets, all subject to final approval by the Martian Council:
Note that the proposal would have no impact on Mars’ existing Osmosis outpost. With proper approval by governance, Mars' Osmosis outpost will continue to add and remove new assets and vaults as well as actively manage risk parameters. Rovers have been designed and will continue to be designed to voyage wherever traders wish to go.
The summary of the proposal in this post should be read together with, and is qualified in its entirety by, the more detailed information in the proposal. Please read the full proposal for additional details, including with respect to proposed vesting schedules, potential protocol upgrades such as a Mars v2 perps integration and why we believe this alignment represents Mars’ best chance of becoming crypto’s winning DeFi super-app.
We encourage everyone to share their thoughts to help us craft the next phase in Mars’ evolution. The Council awaits your arrival: https://forum.marsprotocol.io/t/mrc-67-mars-x-neutron-alignment/1128
Mars is a novel interchain credit protocol primitive that enables non-custodial borrowing and lending for the Cosmos ecosystem and beyond. Its hub and outpost architecture allows Mars to operate on any chain in the Cosmoverse, and enables a new primitive: the Rover. Live now, Rovers give their pilots DeFi superpowers to engage in virtually every governance-approved activity they might encounter on a centralized exchange: spot trading, margin trading, lending and borrowing — all in a single decentralized credit account represented by a transferable NFT. Your Rover awaits at app.marsprotocol.io.
All forward-looking statements set forth herein and in the proposal are subject to numerous risks, assumptions and uncertainties, including that the detailed terms of agreements between the Mars and Neutron Foundations could differ from the verbiage of the proposals and will nevertheless be the binding definitive terms of the two Foundations’ agreements, and that the Martian Council could fail to approve some or all initiatives agreed to be supported by the Mars Foundation, in which case actual events may differ from expected events as described herein. Some or all features of Mars may not be legal to use in certain jurisdictions, including in the United States with respect to leveraged transactions. No person is solicited to use Mars or receiving an offer to enter into any transaction, through this post or otherwise. Users are responsible for ensuring their own legal compliance and may be at risk of serious liabilities for violating their local laws or the laws applicable to other users interacting with them on a peer-to-peer basis through Mars. Remember, Cosmos, Neutron, Osmosis and Mars are experimental technologies. This post is subject to and limited by the Mars disclaimers, which you should review: https://docs.marsprotocol.io/docs/overview/legal/disclaimers-and-disclosures