Core Concepts
Proof of Liquid Staking
Neutron’s revolutionary staking model that combines network security with DeFi capital efficiency
Neutron’s proof-of-liquid-staking model reimagines traditional PoS economics with a fixed token supply, delegator protection, and deep liquid staking integration—creating sustainable security while enabling capital to remain productive in DeFi.
For comprehensive validator setup and operational details, see the Validators documentation.
Core Principles
Fixed Supply & Performance-Based Rewards
No inflation or block rewards. All staking rewards come from the Neutron DAO Treasury, with validators compensated based on strict performance metrics rather than token inflation.
Delegator Protection & Capital Efficiency
No slashing for delegators eliminates asset reduction risk, while staked NTRN can be represented as liquid tokens and used throughout the ecosystem.
Economic Structure
Validator Compensation: $3,000 USD per month base compensation with performance-based adjustments. No commissions on delegator rewards, creating clear role separation. Delegator Rewards: Stable 3% target APR funded by the Treasury, with options to magnify returns through DeFi participation.Performance Requirements
| Performance Metric | Minimum Threshold | Target Threshold | Result if Below Minimum |
|---|---|---|---|
| Block Signing | 95% | 99.5% | Partial or no rewards |
| Oracle Price Updates | 95% | 98% | Partial or no rewards |
Liquid Staking Innovation
- The network actively encourages liquid staking derivatives like dNTRN
- Staked NTRN can be represented as liquid tokens and used throughout the ecosystem
- Capital simultaneously secures the network and participates in DeFi applications
- DAO stakes a significant treasury portion with validators for network security
- Staked NTRN provides governance voting power through dedicated vaults without unstaking
Advantages Over Traditional Models
Sustainable Economics
No inflation preserves token value while Treasury funding provides stable, predictable compensation for both validators and delegators.
Capital Efficiency
Liquid staking eliminates opportunity cost by allowing simultaneous network security participation and DeFi yield generation.
Technical Implementation
The liquid staking model operates through several integrated mechanisms:- x/revenue Module: Tracks validator performance and distributes rewards according to service quality metrics. See the Revenue Module for technical details.
- Staked NTRN Voting Vault: Ensures native stakers can participate in governance without unstaking their tokens.
- DAO Treasury Management: Strategic deployment of treasury assets secures the network while fostering ecosystem growth.