I think this is timely conversation and will go ahead and do a brief brain dump :
First and foremost, relationships are repeated games and as such it’s in the Cosmos Hub’s best interest to use it’s NTRN in a way which is long term aligned with it’s own interests - growing ATOM as money and the success of ICS - which were what led to the airdrops reception in the first place. Thinking about this as a repeated game makes me weary of anything that can be viewed as adversarial since 1) it’d discourage future participation in ICS and the AEZ and 2) it’s directly against the ‘no harm’ clause that was specified as part of the transfer. Now some more specifics.
- Use some of it for Liquidity-as-a-Service: we have a chance to increase NTRN / ATOM liquidity on Astroport, Osmosis and other DEXs. More liquidity = more frictionless economy in the AEZ. This also ties into the ATOM as interchain Money narrative. Stride made an interesting proposal on how to approach this and what the benefits would be here . If Neutron is willing, I think we could figure out a mechanism where the LPed NTRN tokens would allow the Hub to maintain its voting power. The AAT would be part of that mechanism.
I think this is something that’s incredibly exciting for both Neutron and the Cosmos Hub. Stride’s proposal that you linked is particularly well thought out and also incorporates Stride’s success. I think if the POL was used on Astroport on Neutron, a voting vault that retains governing rights would also still be in the question although I’m not sure whether the same would make sense for Neutron to incorporate if it was liquidity provided elsewhere as it’d signal a lack of governance alignment.
- Use some of it to pay validators: a common concern with consumer chains right now is that the operational costs that validators incur aren’t being covered by the revenue generated. We could set aside a portion of the NTRN tokens and set a time period (3 years?) in which we pay out a flat fee to each validator in the active set. If we were to aim for $500 a month per validator, we’d end up with a total cost of 3.24 million USD over the course of 3 years. Something I think is quite manageable.
I know a few Neutron contributors are working on a forum proposal for this right now. I’ll wait for them to post it but I think it’s definitely something worth doing. I would say that it makes sense to allocate this on a shorter timescale as it’s likely Neutron’s validator set size will decrease when opt-in or top-N ICS is available and so only Neutron validators should receive the ‘UBI’ stipend (shoutout @velvetmilkman @VelvetMilkman1 for the first UBI proposal I saw).
- Use some of it for grants: I’m personally not quite sure about this one. We already have the Neutron Grants program and the AADAO on our side. However, I could imagine that there would be scenarios where developer funding similar to the recent Informal/Hypha proposal could be partially paid out in NTRN in order to further incentive-align teams with the larger AEZ.
I generally agree that while grants are an option, we have grants programs that exist. It could certainly make sense to do a joint program between AADAO and the NGP (Neutron Grants Program) if properly organized.
- Buy-back ATOM in the bull market or convert some to USDC: Due to Neutrons low market cap and weaker distribution, it’s not unlikely it will outperform ATOM in terms of percentage gain within the next year. Buying back ATOM would allow some of that to affect the ATOM price. But something I’m more passionate about is the opportunity we have to convert some of this to USDC in order to cover our USD-based costs in the next bear market.
I tend to think this is a bad idea. Firstly, it’d signal short-term alignment between the Cosmos Hub and it’s consumer chains as it doesn’t seek to grow the ecosystem and instead just install finite, short term buy pressure. Future consumer chains will also be deterred from similar agreements if they see that this is a viable option. To your point about performance as well - NTRN has outperformed ATOM on almost every time frame this year so I’m not sure your claim is true about ATOM, although it might be self fulfilling if this action is taken. I also don’t think this is a bug in ATOM - ultimately ATOM is money and money is supposed to be stable. I’d also point out that this doesn’t seem aligned with the ‘no harm’
clause mentioned in the proposal to transfer the funds in the first place.