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.

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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.

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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.

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Performance Requirements

Performance MetricMinimum ThresholdTarget ThresholdResult if Below Minimum
Block Signing95%99.5%Partial or no rewards
Oracle Price Updates95%98%Partial or no rewards
For comprehensive validator setup and operational details, see the Validators documentation.

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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

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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.

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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.