Osmosis (OSMO)

About Osmosis (OSMO)

OSMO (OSMO) is the native token of Osmosis, a Layer 1 App Chain DeFi protocol within the Cosmos ecosystem. With the OSMO token, users can pay gas fees, vote on governance proposals, and stake to contribute to network security. The Osmosis app chain offers various DeFi products including traditional AMMs, Concentrated Liquidity, Lending and Perpetual markets, and Liquidity Vaults. Osmosis is connected to over 80+ sovereign app chains within the Cosmos ecosystem, as well as networks like Bitcoin, Ethereum, Polkadot, Avalanche, and Solana.

What is Osmosis (OSMO)?

Osmosis (OSMO) is a decentralized exchange (DEX) designed for the Cosmos ecosystem, which is a network of interoperable blockchains connected via the Inter-Blockchain Communication Protocol (IBC). Osmosis also supports non-IBC assets from the Ethereum and Polkadot ecosystems. As an appchain DEX, Osmosis has more control over its blockchain stack than DEXs that rely on a parent chain’s code. This control has facilitated the development of features like Superfluid Staking, which enhances the security of the Proof-of-Stake model. Osmosis is designed to build a cross-chain native DEX and trading suite that connects all chains over IBC, including Ethereum and Bitcoin.

How does Osmosis (OSMO) work?

Osmosis (OSMO) operates on a unique model that allows for customizable liquidity pools. Unlike other protocols where liquidity providers (LPs) can only contribute to a two-token pool with an equal ratio, Osmosis allows LPs to provide liquidity to pools with multiple tokens and unequal ratios. This flexibility enables LPs to adjust parameters such as slippage and transaction fees. Additionally, Osmosis introduces the concept of “AMMs as serviced infrastructure,” providing AMM creators with the option to define the bonding curve value function and reuse the rest of the infrastructure using Osmosis’ products.

What are the potential use cases for Osmosis (OSMO)?

Osmosis (OSMO) provides a suite of trading functionalities, including lending, credit, margin, fiat on-ramps, DeFi strategy vaults, NFTs, stablecoins, and more. These features strive to provide all the functionalities of a centralized exchange, plus the trust-minimization of decentralized finance. Osmosis also intends to reduce harmful MEV (Miner Extractable Value) through the development of a transaction mempool shielded with threshold encryption. The platform’s governance token, OSMO, allows holders to participate in the strategic decision-making of the liquidity pool, incentivizing long-term liquidity provision.

What is the history of Osmosis (OSMO)?

Osmosis (OSMO) was launched by members of two core Cosmos teams: Sunny Aggarwal and Dev Ojha from Sikka validator and Tendermint, and Josh Lee and Tony Yun from Keplr, the Interchain Wallet. The project has also received support from Paradigm, a digital asset firm with stakes in numerous other blockchains and protocols. Osmosis operates on a sovereign proof-of-stake blockchain with its own validator set. The OSMO token has a total supply of 1 billion, with a “thirdening” schedule that reduces token distribution by a third each year.