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About Osmosis
Key Points
- Osmosis (OSMO) is a decentralized exchange (DEX) for Cosmos.
- It offers non-IBC assets bridged from Ethereum and Polkadot ecosystems.
- Osmosis is moving to a concentrated liquidity model for superior trading and liquidity provision experience.
- It has greater control over the full blockchain stack, enabling features like Superfluid Staking and threshold encryption.
- Osmosis aims to build a cross-chain native DEX and trading suite connecting all chains over IBC.
Founders and Investors
- Founders: Sunny Aggarwal, Dev Ojha, Josh Lee, and Tony
About Osmosis
In the realm of decentralized finance, Osmosis emerges as a beacon of innovation, poised to revolutionize the landscape of liquidity provision and automated market making.
Osmosis (OSMO): A Comprehensive Overview
Osmosis (OSMO) is a decentralized exchange (DEX) operating within the Cosmos ecosystem, a network of sovereign, interoperable blockchains seamlessly interconnected via the Inter-Blockchain Communication Protocol (IBC). Additionally, Osmosis facilitates access to non-IBC assets bridged from the Ethereum and Polkadot ecosystems. Initially built upon Balancer-style pools, Osmosis is evolving towards a more sustainable concentrated liquidity model, thereby providing a superior trading and liquidity provision experience.
As a decentralized exchange (DEX) built on an appchain, Osmosis boasts unparalleled control over the entire blockchain stack, unencumbered by the constraints of a parent chain. This granular control has facilitated the development of innovative features, such as Superfluid Staking, a groundbreaking enhancement to Proof-of-Stake security. By leveraging the underlying OSMO in a liquidity provider (LP) position, Superfluid Staking enables the addition of chain security and the earning of staking rewards. Furthermore, the customizability inherent to appchains has paved the way for the creation of a transaction mempool shielded by threshold encryption, poised to significantly mitigate the detrimental effects of Maximum Extractable Value (MEV) on Osmosis.
Osmosis envisions a revolutionary cross-chain native DEX and trading suite, seamlessly bridging disparate chains, including Ethereum and Bitcoin, via IBC. To further augment its trading capabilities, Osmosis has extended an invitation to external developers to craft a bespoke DEX ecosystem, replete with an array of features, including lending, credit, margin, fiat on-ramps, DeFi strategy vaults, NFTs, stablecoins, and more – effectively replicating the functionalities of a centralized exchange, while leveraging the trust-minimizing benefits of decentralized finance.
The Visionaries Behind Osmosis: Meet the Founders
Osmosis was spearheaded by a coalition of visionaries from two esteemed Cosmos teams: Sunny Aggarwal and Dev Ojha, renowned for their work at Sikka validator and Tendermint, alongside Josh Lee and Tony Yun, the masterminds behind Keplr, the pioneering Interchain Wallet.
Notably, Osmosis has secured investment from Paradigm, a prominent digital asset investment firm boasting a diverse portfolio of stakes in numerous blockchains and protocols, including Uniswap, Maker, and Coinbase, among others.
Osmosis: A Beacon of Uniqueness in the Cosmos of DeFi
The Osmosis blockchain protocol boasts three distinctive advantages that distinguish it from other automated market maker (AMM) money market protocols.
Osmosis boasts customizable liquidity pools, distinguishing it from Uniswap, where liquidity providers (LPs) are limited to contributing to two-token pools with a fixed 1:1 ratio. In contrast, Osmosis enables LPs to provide liquidity to pools comprising multiple tokens with flexible, unequal ratios. As the DeFi market matures, Osmosis recognizes the need for a more adaptable solution, empowering arbitrageurs and LPs to identify opportunities and respond by fine-tuning parameters. Consequently, Osmosis LPs can adjust a range of factors, including slippage and transaction fees, to optimize their strategies.
Effective coordination among stakeholders is paramount, which is why Osmosis’s liquidity pool shares serve a dual purpose. Not only do they represent fractional ownership of a liquidity pool, but they also confer the right to participate in strategic decision-making processes. This mechanism incentivizes long-term liquidity provision and safeguards against potential vampire attacks from rival protocols. Consequently, liquidity providers with a greater stake in the pool’s success wield greater influence over its strategic direction, a correlation that reflects the heightened risks they undertake.
Ultimately, Osmosis pioneers the concept of “AMMs as serviced infrastructure,” a paradigm shift in response to the burgeoning landscape of DeFi products. As the complexity and diversity of these products continue to escalate, AMMs have been compelled to:
- Strike a balance between efficiency and trading on Automated Market Makers (AMMs) with suboptimal bonding curves.
- Assume the risk of developing a bespoke AMM to achieve optimal efficiency.
Osmosis seeks to address this limitation by empowering AMM creators to define their own bonding curve value function, while leveraging the remainder of the infrastructure through Osmosis’ comprehensive suite of products.
What Is the Circulating Supply of Osmosis (OSMO) Coins?
OSMO is the protocol’s governance token, boasting a total supply of 1 billion. At genesis, 100 million OSMO was unveiled, divided equally between airdrop recipients and a strategic reserve. Tokens are being incrementally released at the culmination of each daily epoch, adhering to a “thirdening” schedule, whereby token issuance is reduced by a third annually. In the inaugural year, 300 million OSMO will be released, followed by 200 million OSMO in the second year, 133 million OSMO in the third, and so forth. Newly released tokens are distributed as follows:
- Staking Rewards: A quarter of the total allocation, 25%
- Developer Vesting: An additional 25% reserved for the development team
- Liquidity Mining Incentives: A substantial 45% allocated to foster liquidity
- Community Pool: A dedicated 5% for the community’s benefit
The total token distribution is allocated as follows:
- Liquidity Reward Mining: 40.5% of the total allocation is dedicated to incentivizing liquidity providers, fostering a robust and dynamic market ecosystem.
- Developer Vesting: A significant 22.5% is reserved for the development team, ensuring their continued commitment to the project’s growth and success.
- Staking Reward: An equivalent 22.5% is allocated to staking rewards, empowering users to participate in the validation process and contribute to the network’s security.
- Community Pool: A dedicated 4.5% is set aside for community-driven initiatives, fostering collaboration and innovation within the ecosystem.
- Strategic Reserve: A prudent 5% is allocated to a strategic reserve, providing a safeguard for future development and strategic partnerships.
- Airdrop: An additional 5% is designated for airdrops, allowing for the distribution of tokens to a wider audience and promoting widespread adoption.
The Osmosis Network’s Security Mechanisms: A Robust Framework
Osmosis is a decentralized, sovereign blockchain network that operates on a proof-of-stake consensus mechanism, governed by its own distinct set of validators.
Where to Acquire Osmosis (OSMO): A Comprehensive Guide
OSMO is conveniently listed on prominent exchanges, including Osmosis, Binance.com, Crypto.com, and MEXC, ensuring seamless accessibility for users.
Associated Resources:
Discover Near Protocol (NEAR), a prominent layer-one blockchain that has garnered significant attention in the cryptocurrency sphere.
Explore Cosmos (ATOM), the innovative blockchain that underpins Osmosis.
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