Neutron, a key DeFi hub in Cosmos, is making a significant transition—migrating from the Cosmos Hub’s Interchain Security (ICS) model to becoming a fully sovereign proof-of-stake (PoS) network. This shift, known as the Mercury Upgrade, represents a major step for both Neutron and the broader Cosmos ecosystem.
The move follows months of discussion around the viability of ICS as a long-term mechanism for ATOM alignment. Now, Neutron is charting its own path, with a new governance structure, staking incentives, and network upgrades designed to scale its DeFi ecosystem.
What the Mercury Upgrade Changes
The Mercury Upgrade marks the next phase in Neutron’s development. By moving to sovereignty, Neutron will have full control over its security model, governance, and upgrades—free from the constraints of the Cosmos Hub’s validator set.
Some of the key changes include:
Higher network performance – 11x higher throughput, with the potential for 18x faster block times by the end of the year.
New DeFi innovations – Features like Supervaults and liquid staking introduce new ways for users to participate in Neutron’s ecosystem.
Better user onboarding – Faster account creation, ATOM reward programs, and improved liquidity mechanisms.
Increased TVL and liquidity – The network expects a 2x increase in total value locked, alongside a $10M liquidity boost.
With these upgrades, Neutron aims to become a more attractive platform for users, liquidity providers and developers.
Why Neutron Is Leaving Interchain Security
When ICS launched, it was meant to be a way for the Cosmos Hub to extend security to consumer chains while creating demand for ATOM. However, in practice, full-set ICS presented challenges:
It didn’t create significant value accrual for ATOM.
It placed a heavy burden on the Cosmos Hub’s validators.
It slowed down the upgrade process for chains using ICS.
While ICS in its current form is being phased out, alternative models—such as Partial Set Security (PSS)—are expected to play a role in the Hub’s future.
A Realigned Cosmos
Neutron’s transition is part of a broader strategy to streamline Cosmos’ infrastructure and focus on ATOM-aligned applications. According to key figures in the Cosmos ecosystem, over 20 projects are actively being built or relaunched with deeper integration into the Hub’s evolving framework.
Additionally, Cosmos is prioritizing efficiency by consolidating its core development efforts under Interchain Labs. This means CometBFT, CosmosSDK, IBC, and CosmWasm are now managed under a single team—reducing fragmentation and accelerating development cycles.
With these structural changes, Cosmos is positioning itself for the next stage of adoption: faster L1 launches, easier user onboarding, and a Cosmos Hub that truly functions as an aggregator of infrastructure and capital.
What’s Next for Neutron?
The Mercury Upgrade is set to go live on April 9, 2025. From that point forward, Neutron will operate as a fully sovereign network, with a renewed focus on growing its DeFi platform and expanding its integrations.
While the move marks the end of its time under ICS, it also opens new opportunities for Neutron to develop independently—without the limitations of shared security.
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