Paradigm led the investment and explained in detail the DEX protocol Osmosis with the largest ecological scale of cosmos

Foresight News 2022-04-04 19:16:53 阅读数:210

paradigm led investment explained dex

writing :Jerry Sun,Messari researcher

compile :iambabywhale.eth,Foresight News

  Mars finance note :2021 year 10 month , Osmosis Announced financing through private token transactions 2100 Thousands of dollars , from Paradigm Ventures Lead investment ,Robot Ventures、Nascent、Ethereal and Figment Also involved in this transaction .Terraform Labs cofounder Do Kwon Also join this round of financing .

a key :

  • Osmosis It's based on Cosmos Ecology has independence and interoperability Layer1 Public chained DEX;
  • It was the first in Cosmos Realize great in ecology IBC Transaction size and start-up DEX Active application chain ;
  • Its features include customizable pool parameters 、Superfluid Pledge and will resist MEV Plans to incorporate its underlying architecture ;
  • The agreement consists of native tokens OSMO Provide support , It can be used for pledge and governance .OSMO Rewards are also released through liquidity incentives .


brief introduction

Investors believe that multi chain can solve the problem of blockchain expansion , This has aroused people's concern about Cosmos Network Interest in ecosystems ,Cosmos As 「 Blockchain Internet 」, It can accommodate a series of independent application chains . Each application chain in the network is unique Layer1 Blockchain , To increase Cosmos The function of the network .

In order to connect such a blockchain ecosystem , Need a healthy trading platform . Through these trading platforms , Capital allocators can obtain liquidity to cultivate a healthy market , Invest in growing projects , And lead investment to promising opportunities .

Cosmos The network supports its own native DEX, But in liquidity 、 The leader in transaction volume and cost is Osmosis agreement . In this report , We will understand Osmosis And its use with other AMM Pattern DEX Characteristics of comparison .

Osmosis summary



Osmosis yes Cosmos Support cross chain communication in ecosystem (IBC) Of DEX. It consists of Sunny Aggarwal、Josh Lee and Dev Ojha On 2021 year 1 Founded in , parent company Osmosis Labs Responsible for the development of .

The three co founders give full play to their experience in blockchain , All three of them were initially developing a mechanism known as Byzantine fault-tolerant consensus Tendermint.

During that time , They are committed to Cosmos The underlying architecture of the ecosystem , Their respective activities include Keplr Various items including wallet . It was during this period that , They were founded Osmosis, The goal is to build a fully customizable DEX.


Osmosis How to operate


At the functional level ,Osmosis It works the same way as other AMM similar . The liquidity pool locks tokens into smart contracts , The contract is automatically executed in token transactions .

A trader's counterparty is a liquidity provider (LP) In the form of , They provide basic tokens to these pools , Liquidity . In return , these LP Received the specified LP Tokens, , Express their contribution to the pool and measure the share of revenue generated . These are traditional things .


Besides , With many others AMM equally ,Osmosis Rely on the deterministic pricing model to ensure that the respective weights of tokens in each pool are consistent . in fact , Almost all AMM All use deterministic pricing , Because it helps to determine the number of tokens in each transaction . Although the market pricing of any token may change , But when maintaining the basic pricing formula , The chances of arbitragers will be minimized .


Liquidity incentives


To ensure adequate liquidity ,DEX Two mechanisms have been established to help build long-term viability : Bind liquidity indicators and exit costs .

long-term DeFi Users may see the former as a traditional liquidity incentive . The mechanism for binding liquidity indicators is simple : Add liquidity to the pool LP Will receive native tokens OSMO Reward .

LP You can choose when they are willing to bind tokens . To obtain the OSMO The exact number of rewards depends on the length of binding time and the number of tokens , All this is determined by agreement governance .

Interestingly , Not all liquidity pools are rewarded .OSMO The holder will decide which liquidity pools will be rewarded . The liquidity pool that can be rewarded will get 「 Distribute points 」, and OSMO The reward will be distributed in proportion to the number of points in each mine pool .

Fortunately, , For ore pools without internal excitation ,OSMO Tokens are not the only reward . External incentive providers , For example, users who trade in the pool , They can distribute their rewards . Like internal liquidity incentives , External providers choose which variables to set , For example, the time required to qualify for awards or the number of awards .


Exit fees


If the bound liquidity index is long-term liquidity 「 Carrot 」, So the exit fee is 「 Big stick 」. When LP When withdrawing funds from the liquidity pool , The agreement will be based on LP A small fee in the form of tokens .

The exit fee is determined by the pool Creator , Designed to benefit the remaining contributors to the pool , Because the exit fee was burned . in general , When LP When deciding to withdraw its liquidity , They will get back their initial capital plus accrued transaction costs minus exit costs and contingent losses .




It is worth noting that ,Osmosis yes Cosmos The first support in the ecosystem IBC Of DEX. Although there are other DEX, for example Gravity DEX and Injective Protocol, but Osmosis Is the first to achieve great IBC The size of the transaction is based on Cosmos Application chain . Because of its first mover advantage ,Osmosis Continue to IBC Ranked first in the transaction scale , Ranked second in the total transaction size , Second only to Terra .


The market is right Cosmos The growing interest in ecosystems makes Osmosis It's also a big concern . Since its launch , The total trading volume and total lock up volume showed an upward trend . in fact , These two indicators in the past 30 It reached an all-time high in one day . In view of the past and Osmosis To interact or hold OSMO Tokens can get Cosmos Rumors of project token airdrop qualification in the ecosystem , The trend shows no immediate signs of slowing down .



Characteristics of the agreement


Customized liquidity pool

Osmosis Most of the inspiration behind it comes from Ethereum based DEX Balancer And its ability to provide a multi asset liquidity pool . stay Osmosis Labs It seems the team , Mixing assets into liquidity pools is the first of many customizable options . Through this level of customization ,DEX The role of has developed from only trading spot price assets to supporting the option market 、 Inter chain pledge, etc .

Osmosis The liquidity pool provides flexible market maker functions . And Uniswap Constant product of 、Balancer Constant mean of 、Curve The mixing function is different ,Osmosis The function of is variable , So as to become 「AMM laboratory 」 The goal of .

DEX Encourage liquidity providers to try different market making functions .Osmosis Can inspire more experiments , And new changes can eventually lead to innovative solutions , To reduce slippage or impermanence loss .

Pool parameters , Including transaction costs 、 Initial token weight and time weighted average price calculation , Set by the original creator of the pool . however , all Osmosis Liquidity pools are made up of LP Token holder autonomy .

Voting rights are distributed according to the weighted ownership of the funds in the pool , A longer lock-in period will increase voting rights . because Osmosis The market is expected to determine the best capital efficiency , Therefore, autonomous pool is only one of the determinants of establishing the most competitive liquidity pool , The final game will be one that provides greater participation for capital allocators , A competitive market .


Superfluid pledge


With people like Ethereum rollup As compared to a central ecosystem ,Cosmos The Multi Chain ecosystem such as ecosystem is facing the challenge of security . therefore , about Cosmos The public chain in the ecosystem , Security issues become critical .

Osmosis Designed a smart solution to this problem :Superfluid pledge , Since it is considered as a liquidity pledge PoS One of the biggest advances in , This pledge method allows LP Use its native OSMO Tokens provide liquidity , Using the same token at the same time brings security to the underlying network . Here is Osmosis Superfluid Visual representation of pledge platform .


Superfluid The pledge model subverts the existing liquidity pledge solution .Superfluid Pledge is not to provide liquidity for bound assets , Instead, get bound liquidity from assets and put it into the network . The fact that assets have been bound to local liquidity pools only helps to simplify the balance between network security and Economic Liquidity .

The whitelist liquidity pool is the only one eligible to participate Superfluid Pledged liquidity pool . This is because Osmosis Hoping to restrict malicious actors from casting risky assets , Then these people can exhaust the bottom OSMO Collateral liquidity pool for tokens . Preventing this from happening is essential for strong security , Determining whether the whitelist pool meets the conditions will be determined by Osmosis Governance decisions .

Superfluid The benefits of pledge should be obvious : It allows the LP Ensure network security through the income generated by transaction costs and the reward obtained through pledge , To double their returns .

meanwhile , The underlying network benefits from additional security , Bring a win-win situation to all parties . What's more exciting ,Osmosis Not necessarily the only beneficiary , The agreement can provide pledge as a service , To help other application chains obtain security . The end result is this Superfluid The pledge function supports the interweaving of secure networks into a large cross chain network .


Integrate CosmWasm


3 At the beginning of ,Osmosis Announced that it has successfully cooperated with blockchain development tools Confio cooperation , take CosmWasm Cross chain smart contract engine integrated into Osmosis Agreement . Through this collaboration ,Osmosis Has an undeveloped resource pool , because CosmWasm Have Ethereum and Solana One of the largest developer ecosystems outside .

CosmWasm To be familiar with Go and Rust Our developers provide WebAssembly virtual machine (WASM). Developers can build new licensed smart contracts through a toolset , The contract can span multiple Cosmos SDK Blockchain operation . We can think of it as an attempt to enhance Cosmos Framework of smart contract function for interoperability between application chains .

Besides , The cooperation between the two sides may imply Osmosis Other functions that may be supported in the future , For example, revenue aggregator 、 Liquidity management tools, etc . Although this is exciting news for those who want to maximize their benefits , but Osmosis Labs The team has made it clear that , Its ultimate goal is to maintain an interoperable DEX Centered agreement .


resist MEV


Osmosis The upcoming roadmap includes addressing maximum extractable value (MEV), This is one of the biggest challenges in decentralized trading . Because all transactions are carried out through blockchain , This means that they can be obtained on the public ledger , Miners can rearrange the order of transactions in their block for profit .

It is important that the transaction be approved first , For example, preemptive trading or obtaining precious NFT, Miners will have more advantages than ordinary users . This type of MEV Act on DEX User disadvantage , But it is beneficial to miners and other users who decide to trade in the block .

MEV At first it was a matter of privacy , Later, it evolved into an economic problem . according to MEV Explore The data of , since 2020 year 1 Since the month , Only on Ethereum , The miners have extracted more than 6 Billion dollars .


Osmosis Yes MEV The solution is to implement an encryption form called threshold encryption .

The threshold encryption process starts before the transaction enters the memory pool . Encrypted transactions hide transaction details from the verifier , Prevent the verifier from determining which transactions to prioritize . Only after the transaction is completed and executed , The verifier can see the details . Please note that , In the process , Only the transaction details are encrypted ; The amount of fees will continue to be disclosed . result , Unprocessed transactions continue to be added to the blockchain in the order of fee amount .


OSMO Token Economics


As a native governance token ,OSMO Support Osmosis All functions of the application chain . On a daily basis epoch A maximum of... Will be set in the release of 1 The supply of 100 million tokens . The release schedule is similar to bitcoin's famous 「 halve 」,Osmosis Reduce the number of new tokens by a third every year . The new token will be rewarded by pledge 、 Developer ownership 、 Community pool allocation and liquidity mining incentive distribution . The complete supply curve is shown in the figure below :


OSMO The issue of tokens is fair , Distributed in the strategic reserves of airdrop recipients and agreements . It is worth noting that ,50% Our supply was airdropped to ATOM holder , The rest 50% Kept as a strategic reserve , This will support the continued development of the agreement . Reserve tokens can be used to fund open source projects 、 Make investments or provide grants .




DEX Trading volume competition is very fierce , But at the end of the day , Successful applications must continue to innovate to attract liquidity providers .Osmosis The community thinks , The trading platform is likely to rely on its position as the core of Multi Chain 、 The liquidity pool parameters can be set flexibly 、 Innovation in the pledge model and exciting anti MEV The roadmap ,Osmosis Ready to capture significant liquidity and agreement revenue . Only time can prove how successful it will be —— But early indicators look promising .

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