Make Osmosis the Home of Mars Protocol

Proposal Discussion
1

Change log

-Edit 1, December 6th: clarified that this proposal does not ask for a revenue share agreement with Mars. This prop mirrors the Neutron deal, except it does not 1) ask for an exclusivity clause or 2) ask for revenue share.

Summary

The Mars community is considering deprecating its chain and relocating Mars Hub to an existing generalized smart contract chain.

This morning, a forum post on the Neutron governance forum proposed that the Neutron DAO make a strategic investment in Mars protocol in exchange for Mars Hub relocating to Neutron.

But it would make more sense for Mars Hub to relocate to Osmosis.

Also, the Neutron forum proposal would establish an exclusive relationship between Mars and Neutron, whereby there would be restrictions on Mars launching new features on other chains beside Neutron. Also, the Neutron proposal would require Mars to share 10% of its revenues from all outposts with the Neutron DAO. This exclusive relationship is inconsistent with a “grow the pie” approach to interchain development.

Therefore, this proposal aims to offer the exact same deal to Mars that Neutron is offering – with two important difference: 1) this proposal does not require a restriction on deployment of new Mars features, and 2) nor does it require a revenue share agreement with Mars.

Specifically, this proposal aims to grant Mars $3M USDC in installments over a period of two years. In exchange, Mars would grant Osmosis 60M MARS tokens, and would agree to relocate Mars Hub to Osmosis, while retaining Mars’ ability to deploy outposts on any chain.

Why Osmosis?

First - since the relaunch of Mars in February of 2023, Mars and Osmosis have had a very tight relationship. Mars’ first outpost was on Osmosis. In order to help Mars with its go-to-market, Osmosis governance generously provided a grant of 310K OSMO to bootstrap Mars token liquidity. In a follow-up proposal, Osmosis governance approved MARS token for regular OSMO incentives.

Second - Mars has the majority of its TVL and token liquidity on Osmosis. Mars currently has two outposts: on Osmosis and Neutron. But according to DeFi Llama, over 95% of Mars’ TVL is on Osmosis. In addition, while the MARS token is listed on both Osmosis and Neutron - again, over 95% of MARS token liquidity and volume is on Osmosis.

Third - Osmosis has by far the highest IBC traffic and IBC connections, as can be seen on Map of Zones. As Mars is an interchain protocol with outposts on potentially many chains, it makes sense for Mars Hub to be located at the center of the IBC network.

No exclusivity

As a leading Cosmos interchain protocol, Mars could be painfully limited by the exclusivity clause in the Neutron proposal. According to the Neutron proposal, Mars would be restricted from deploying new features to non-Neutron chains for three months after deployment on Neutron. This restriction would presumably be effective in perpetuity.

In the future, Mars could potentially have outposts on Osmosis, Neutron, Sei, Terra, Injective - and perhaps chains that haven’t even launched yet! With potentially such a large network of outposts, this exclusivity restriction from the Neutron proposal could hamper Mars’ growth.

Exclusive deals are not the way to grow the pie! As such, this proposal for Mars Hub to relocate to Osmosis does not have any exclusivity clauses. Mars governance would be free to deploy new features wherever it wanted whenever it wanted.

Implementation

This proposal would mirror all the details of the Neutron proposal.

Specifically, Mars would receive $3M USDC from the Osmosis community pool, vested according to milestones. This USDC would be sourced from the USDC in the community pool, the sale of non-OSMO tokens in the community pool, or the sale of OSMO. Potentially, the Osmosis community pool may wish to arrange an OTC deal to raise a USDC treasury, similar to the Stride incentive diversification action earlier this year.

And for its part, Mars governance would grant 60M MARS to the Osmosis community pool. Osmosis governance would only use this MARS token in ways that are friendly to Mars. And Mars Hub would be relocated to Osmosis.

Final thoughts

This proposal asks Osmosis governance if it would approve such a deal with Mars. In order for the deal to take effect, Mars governance would have to ratify it.

Given the long and close history between Mars and Osmosis, it makes sense for Mars Hub to relocate to Osmosis. Also, Mars’ TVL and token liquidity are heavily concentrated on Osmosis. And Osmosis is currently the main IBC hub, with the most traffic and connections - an ideal place for the headquarters of an interchain protocol!

For further details around this proposal, see the Neutron proposal - which this one mirrors. Also, feel free to ask any question you may have.

Pending community discussion, this proposal will go onchain as a signaling proposal soon.

6 Likes
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Great write-up @John_Galt.

I’m personally in strong support of this. Mars has been one of the closest partners for Osmosis, and it makes sense to double down on this partnership together.

p.s. the Osmosis team has already begun development of a margin trading UI for Mars v2 in the Osmosis frontend!

4 Likes
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Strongly support this proposal! I’d even go as far as to say that we should be willing to accept fewer than 60M MARS tokens as part of this proposal (or be willing to effectuate a token swap of OSMO in addition as part of this).

I see the MARS grant as a way to help foster alignment between Mars and Neutron, but Osmosis and Mars are already so strongly aligned that imo we could afford to “sweeten the pot” by having Mars retain more of these MARS tokens for its own treasury and growth. Maybe we could afford to have this be 40-50m MARS tokens instead?

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Tbh, I seriously would consider if there are politics at play here (yes, the paranoid part of me speaking).

Let’s think out loud. Would Osmosis / Osmosis governance / Osmosis community go ahead with a 3 million dollar fund to buy-out Mars if that would be the only option they have?
I don’t think so.

OR, does this give more credibility and a sense of urgency for Osmosis to act to keep Mars inside?

I’m not decided yet, but the whole play coming together kinda stinks imo.

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Very much in favor of this proposal. I think removing the exclusivity will be much better for the broader ecosystem and get Mars to where they want to be. Makes a whole lot of sense deploying on Osmosis where most of the defi in the ecosystem occurs

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I support this prop and will be surprised and sad if the Mars community chooses to migrate and take on the exclusive terms that they’d be required to.

Just going to leave this here (p.s. I know TVL isn’t the best metric but it speaks volumes here, no pun intended):

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Screen Shot 2023-12-04 at 6.39.57 PM2034Ă—1028 286 KB

1 Like
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Here are some thoughts:

  • Would it make sense to have both Mars and UX (Umee) natively deployed on Osmosis? Both protocols are lending platforms and basically competitors.

  • The merger Deal with the UX chain seems to be much welcomed in both the Umee and Osmosis community. How would this change and what would be the implications of Mars also migrating to Osmisis?

  • To me the whole story of Mars migrating to Neutron looked a bit fishy tbh. Why would Mars do that, as 95% of their TVL and volume is on Osmosis compared to Neutron + the Mars team has close ties to Osmosis as both teams have worked closely together since the Terra crash.

Mars migrating to Neutron doesn’t make any sense. My gut feeling tells me that it has to do with Delphi Digital, an early investor in both Mars and Neutron. They might have the incentive seeing Mars succeed on Neutron and it’s native DEX Astroport (also funded by Delphi) rather than on Osmosis which is a direct competitor of Astroport.

2 Likes
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Wow. Umee and now Mars. We are getting so busy building here in Osmosis.

Who’s the representative for Mars Protocol governance on this subject? Or it’s just to let the governance decide?

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Yeah, the story doesn’t add up for me as well.

I didn’t know about the investor, but that throws an interesting angle indeed.

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Updating here two weeks on - There was a very thorough discussion on the Mars forums which is well worth a read.

Neutron has a proposal on going to provide the funds to the Neutron Foundation to negotiate this for Neutron.

The Mars team seems to be leaning toward Neutron from what I have seen, mostly due to the relative smoothness of the chain’s operation recently. While Osmosis has both an Epoch period and has had massive traffic recently, Neutron (barring the upgrade yesterday) has been operating smoothly, partially because it is at a different stage in chain usage.

The next step appears to be a Mars chain vote. @John_Galt are you planning on taking this to the Mars forums to enable the equivalent proposal on Mars chain and/or Osmosis chain to signal that the alternative option is available for Mars?

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No.

It would be great if a BD person from Osmosis could take this over the finish line. I’m just an Osmosis community member with a different full time job.

A lot of Delphi guys cited Neutron’s uptime as a reason for picking that chain. But Neutron has had at least two long halts this year, one of which was only yesterday.

They may want to reconsider - so an Osmosis prop might still be successful.

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This sounds all the more reason for Mars not to migrate imo

Since you downgrade effectively in terms of chain usage and protocol maturity. Or am I wrong?

It still feels like a play to get some things done on Osmosis which the team / the community was initially not planning to do… but under the pressure of the threat of losing Mars things might become possible…
Otherwise you could just make the choice to go, not publish the intention to start investigating. I find the whole play a bit weird.