Get ready to dive into the revolutionary world of Neutron, the blockchain network that’s breaking barriers and connecting over 50 independent blockchains through smart contracts.
Neutron, also known by the market ticker NTRN, is a blockchain network that brings smart contracts to a network of over 50 independent blockchains, referred to as the Interchain.
Now while you might be thinking that doesn’t sound too impressive, it means that smart contract-based applications could run seamlessly across the Interchain.
But, not only does it connect these independent blockchains instantly, it also does so in a low-cost, and energy-efficient manner.
On top of this, it holds no barriers to entry, allowing anyone with an active internet connection the ability to use its network.
But what exactly does that all mean? And what really makes Neutron a game changer?
Today we find out!
What is Neutron?
Neutron was founded by Avril, with the Neutron network going live in 2023.
At its core, it aims to make smart contracts interoperable, by providing anyone and everyone the ability to create smart contracts which can be used across the Interchain, a network of 50 independent blockchains powered by Cosmos.
Powered by Cosmos’ Tendermint consensus mechanism, and built with the Cosmos SDK, it uses Cosmos’ Inter-Blockchain Communication Protocol or IBC to grant their smart contracts the ability to be used on any network also built using the Cosmos SDK.
To achieve this, Neutron uses Cosmos’ Interchain Accounts, or ICAs, to let the Cosmos blockchain control accounts, such as wallets, across multiple blockchains.
I will come back to how this all works in a moment, but to put it simply, it means smart contracts on Neutron can interact with models, zones, and apps from any other ICA and IBC-enabled Cosmos blockchains.
But, to make sure we’re all on the same page, let’s break down our definitions.
How does Neutron work?
Neutron was built using the Cosmos Software Development Kit, or SDK.
In short, the Cosmos SDK is a framework for building blockchain applications.
This means Neutron is a Proof-of-Stake based project, with Proof-of-Stake being the more scalable, and energy-efficient way to confirm a blockchain’s consensus, at least compared to Bitcoin’s more famous Proof-of-Work consensus mechanism.
The SDK enables the creation of independent, interoperable blockchains called “zones” that can communicate with each other through a shared hub, Cosmos.
The SDK provides developers with tools to design and customise their blockchains, defining features like consensus algorithms, tokenomics, and governance.
This modular approach allows for flexibility and scalability, enabling a diverse ecosystem of interconnected blockchains to collaborate and share information seamlessly.
Next, we have Tendermint.
Tendermint is a consensus algorithm and the software required for building secure and consistent distributed applications.
Tendermint ensures agreement among a network of nodes, allowing them to reach a common decision on the order and validity of transactions.
Tendermint’s Byzantine Fault Tolerant, or BFT, consensus mechanism maintains reliability even in the presence of malicious actors or network failures.
By using the Tendermint consensus algorithm, the Cosmos SDK ensures security and consistency across connected zones.
Lastly, we have smart contracts, with smart contracts being self-executing agreements with coded terms that automatically enforce and execute the predefined rules when the conditions are met.
These contracts run on blockchain platforms, originally pioneered by Ethereum, and enable decentralised and trustless execution of contractual obligations.
In summary, smart contracts eliminate the need for intermediaries by automating and securing the execution of contractual clauses through computer code.
They can be used for a wide range of applications, including financial transactions, digital identity verification, and decentralised applications.
What makes Neutron unique?
The unique selling point of Neutron is the fact it enables anyone to create smart contracts that can be deployed across multiple independent blockchains, allowing for a new wave of potential blockchain application innovations.
While it is easy to think Neutron only provides smart contract cross-compatibility, it has also allowed for developers to create entire applications that can run across these various blockchains, bringing us closer to a one-blockchain experience.
By allowing smart contracts to be cross-compatible, it ultimately leads to a more convenient user experience.
Instead of having to remember multiple accounts for each blockchain, innovations like Neutron allow for a “one user” experience across multiple blockchains.
Currently, blockchains are mostly closed systems that do not talk to each other by default.
This was originally designed as a security feature, but innovations like the Inter-Blockchain Communication Protocol have made these security concerns a thing of the past.
So how does it do this?
In short, Neutron can retrieve raw data from Merkle proofs on the various blockchains, it then verifies this data and then processes the raw data into a usable form for developers and smart contracts.
For clarity, Merkle proofs are cryptographic proofs that provide a concise and efficient way to demonstrate the inclusion or absence of a specific piece of data within a Merkle tree structure.
A Merkle tree, also known as a hash tree, is a binary tree of hashed data where each leaf node represents individual pieces of information.
To create a Merkle proof, you only need to provide a path of hashes from the leaf containing the target data up to the root of the tree.
This compact proof allows anyone to independently verify the integrity of the data without having to traverse the entire tree.
But how about the tokenomics?
NTRN Tokenomics
Like most Proof-of-Stake projects, NTRN can be used for transaction fees, staking, and governance, with transaction fees forming the main source of income for Neutron.
In total, there will only ever be 1 billion NTRN tokens, all of which were pre-mined. As is typical for projects that have pre-mined their tokens, there is a vesting period.
This means the tokens that will be given to early investors, the team, or even just tokens which are still held in the Neutron reserve, are released slowly over time to ensure the price is not collapsed by excessive sell pressure from newly released tokens.
Unfortunately, although a blockchain explorer exists, it has not listed which of its wallets are connected with exchanges, or even their own reserves, making it challenging to work out if any exceptionally large holders of NTRN could potentially affect the price of the asset.
If blockchain technology is to succeed in the long term, interoperability will likely be a requirement to encourage non-crypto enthusiasts to join the ecosystem.
For that to happen, the experience needs to be as simple as possible.
Applications like Neutron bring us closer to that reality, and as long as the Cosmos network continues to thrive, it is likely the best days still lay ahead for Neutron.