Difference between revisions of "Osmosis (OSMO)"

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The first [https://ibcprotocol.org/ IBC] enabled [[Automated Market Makers (AMM)|AMM]] [[Decentralized Exchange (DEX)|DEX]] within the [[Cosmos (ATOM)|Cosmos]] ecosystem.
==Basics==
==Basics==


Line 5: Line 7:
*[[Testnet]] release:
*[[Testnet]] release:
*[[Mainnet]] release: 6-2021
*[[Mainnet]] release: 6-2021
*The first [https://ibcprotocol.org/ IBC] enabled [[Automated Market Makers (AMM)|AMM]] [[Decentralized Exchange (DEX)|DEX]] within the [[Cosmos (ATOM)|Cosmos]] ecosystem.


==History==
==History==
Line 13: Line 14:
* [[Bug bounty]] program can be found [insert here].
* [[Bug bounty]] program can be found [insert here].
=== Bugs/Exploits===
=== Bugs/Exploits===
* From their [https://twitter.com/osmosiszone/status/1728545418802319733 Twitter] (26-11-2023):
''"The Osmosis chain is back live from a ~2hr unexpected chain halt. The root cause was a bug in the Cosmos SDK's cache KV store, causing a deadlock when multiple cachekv stores get layered on top of each other. This issue was originally discovered by the @osmolabs team last year and patched with help of the @cronos_chain & @binary_builders teams. However, while the patch was backported into the osmosis-labs fork of the cosmos sdk, due to a branch management issue, the patch was accidentally reverted in Osmosis v20. Due to this being a particularly hard to reach edge case, the bug lay dormant for the last month until finally getting triggered by a transaction today."''
*From their [https://twitter.com/osmosiszone/status/1534684186803568640 Twitter] (9-6-2022):
''"Thankfully, the [[SWIFT|swift]] and decisive action taken by Osmosis [[validators]] and community members allowed scope of exploit to be relatively small. While detailed calculation is still in progress, the total amount overdrawn is estimated at around $5M. All losses will be covered. A small number of [[Wallet|wallets]] were responsible for the majority of exploited funds, and we are confident that we will have a high recovery rate from these [[wallets]]. The bug itself was simple, and involved incorrect calculation of LP shares when adding and removing liquidity from pools. The core development teams contributing to Osmosis take full responsibility for this oversight."''
* One of the Osmosis validators, FireStake, [https://twitter.com/statelayer/status/1534649502229049346?s=20&t=vkjJAGwam29H-8rYbUhy-Q came out] (9-6-2022) confessing they had turned $226 into ~$2M before panicking and coming clean. "We were thinking about our family's future, and not the future of our community".
* [https://twitter.com/thejunonaut/status/1534402698556190726?s=21&t=k2PMoty47ENJsIsDpF6VRA From] Junonaut (8-6-2022):
''"A critical bug has been found on $OSMO which could have potentially drained all [[liquidity pools]]. It has been discovered after a post on the [[Reddits|subreddits]] /r/CosmosNetwork and /r/OsmosisLab. The chain was halted under immediate emergency to avoid further damage."''
== Governance ==
== Governance ==
===Admin Keys===
===Admin Keys===
===DAO===
===DAO===
* [https://medium.com/@SenateLabs/landscape-of-pro-delegate-next-wave-of-dao-governance-f239cd8537ea Has] [[Flipside]] and Reverie as some of their professional delegates (30-11-2022).
*From a commissioned [https://messari.io/article/state-of-osmosis-q2-2022 report] by [[Messari]] (14-7-2022):
''"[https://app.flipsidecrypto.com/dashboard/osmosis-governance-4bfzhk According] to [[Flipside Crypto]], it takes about 22 days on average for a [[wallet]] to engage with governance, and only 7% of wallets holding OSMO have never voted. Deeper analysis of governance participation by number of wallets shows a left-skewed data set. Roughly half of all Osmosis wallets participated in 10% or less of submitted proposals. That’s equivalent to about 20 proposals. The other half is more active, ranging from 10% up to 100%. A very select number of wallets (134) achieved perfect attendance. Surprisingly, there was one specific participation rate that was an outlier: more than 7,750 wallets participated in 80% of all proposals, but go up or down a few percentage points and it falls back down to a few hundred. Those wallets likely belong to members of the internal team, active outside investors, or those delegating with a large bloc."''
===Treasury ===
===Treasury ===
==Token==
==Token==
Line 39: Line 58:
===How it works===
===How it works===


* From a commissioned [[Messari]] [https://messari.io/report/state-of-osmosis-q4-2022 report] (16-2-2023):
''"Osmosis is a sovereign decentralized exchange ([[Decentralized Exchange (DEX)|DEX]])-focused app-chain in the [[Cosmos (ATOM)|Cosmos]] ecosystem, meaning it simultaneously serves as a [[blockchain]] and an application. The application operates similarly to other automated market making (AMM) functioning DEXs – liquidity providers ([[Liquidity Provider (LP)|LPs]]), which are responsible for supplying liquidity to asset pools where traders can make trades from. It’s the same model for [[Uniswap (UNI)|Uniswap]] or [[Balancer (BAL)|Balancer]], though more similar to the latter as Osmosis places a high priority on offering asset pool customization. Tweaks to market-maker functions, swap costs, token weighting, and more are all parameters that can be changed within the DEX. Additionally, Osmosis has introduced new features such as superfluid staking that allows users who provided liquidity in certain pools to also stake to help secure the network. In the future, Osmosis will also offer maximal extractable value ([[Maximal Extractable Value (MEV)|MEV]]) mitigation and capture, stable pools, and more."''
* From [[Figment Networks|Figment]] (6-2021):
* From [[Figment Networks|Figment]] (6-2021):


Line 44: Line 66:


===Fees===
===Fees===
* From a commissioned [[Messari]] [https://messari.io/report/state-of-osmosis-q4-2022 report] (16-2-2023):
''"[https://messari.io/intel/event/81fe8b44-c972-4b2a-826c-6645109e69db Proposal 354]: Implement a Minimum Transaction Fee (Signaling) – Initially published in September, voting concluded on November 10 with 99.6% of votes in favor. Prior to this proposal, Osmosis had no protocol-level minimum gas fee, which allowed users to transact on the network for no. This made it very intuitive for new users transacting on the network, as they did not need to bridge a native token. An unforeseen vulnerability of this was that Osmosis could be the victim of DDOS attacks (where malicious users clog the network with spam transactions). The minimum fee was eventually decided to be 0.0025 uOSMO and can actually be paid in an equal value of any token, not only OSMO. This protects the network from DDOS attacks, while still not costing the end user any significant amount."''
===Upgrades===
===Upgrades===
* V14, Neon Upgrade got [https://twitter.com/Flowslikeosmo/status/1615710721098264577 deployed] 23-1-2023.
*[https://twitter.com/osmosiszone/status/1600894130288148480 Introduced] a stable swap [[Automated Market Makers (AMM)|AMM]] (8-12-2022).
*From a commissioned [https://messari.io/report/state-of-osmosis-q3-2022 report] by Messari (12-10-2022):
''"The Oxygen Upgrade aims to “breathe life” into the Osmosis developer ecosystem through four distinct features: [[TWAP]] pricing, upgraded Interchain Accounts Module, Stargate Queries, and expedited proposals for emergencies."''
===Staking===
===Staking===


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====Validator Stats====
====Validator Stats====
* From a commissioned [[Messari]] [https://messari.io/report/state-of-osmosis-q4-2022 report] (16-2-2023):
''"QoQ, the number of OSMO staked increased by 9.6 million OSMO to 210.3 million total OSMO staked. This was an increase of 4.8% QoQ, and resulted in 41.7% of the total outstanding OSMO supply staked by the end of Q4. The number of validators in the Osmosis validator set increased in Q4, from 135 to 150 following a passing [https://messari.io/intel/event/582d6f9f-238a-429c-99c9-5dc3a0391b68?from=calendar governance proposal]."''
*From a commissioned [https://messari.io/article/state-of-osmosis-q2-2022 report] by Messari (14-7-2022):
''"Osmosis finished Q2 with 135 [[validators]] providing security to the chain, up 14.4% from the previous quarter. That rounds out the [[Nakamoto Coefficient]] to 7, up marginally from last quarter’s value of 6."''
===Liquidity Mining===
===Liquidity Mining===
===Scaling===
===Scaling===
===Interoperability===
===Interoperability===
* Osmosis is expanding outside of [[Cosmos (ATOM)|Cosmos]] and into [[Celestia|Celestia’s]] DA layer (11-8-2023).
===Other Details===
===Other Details===
==Oracle Method==
==Oracle Method==
==Privacy Method==
==Privacy Method==
* [https://newsletter.banklesshq.com/p/the-cosmos-endgame From] [[Bankless DAO (BANK)|Bankless]] (15-10-2022):
''"Osmosis is developing a private mempool with threshold decryption. These private transactions cannot be seen by [[Node|nodes]] until after they are executed, making [[Frontrunners|front-running]] much more difficult as well as allowing limit orders and other future/contingent transactions to be put on-chain privately. Similarly, appchains can reserve the first slot in their [[Block|blocks]] for protocol-controlled arbitrage and liquidations: a necessity for the health of lending and trading protocols, but which on monolithic chains tends to become an [[Maximal Extractable Value (MEV)|MEV]] game, leaking value from the app to third parties. Osmosis will instead be directing these healthy, non-user-harming arb profits back to the [[Decentralised Autonomous Organisation (DAO)|DAO]]."''
==Compliance==
==Compliance==
==Their Other Projects==
==Their Other Projects==
Line 63: Line 112:


*Can be found [Insert [[LINK|link]] here].
*Can be found [Insert [[LINK|link]] here].
==Revenue==
* From a commissioned [[Messari]] [https://messari.io/report/osmosis-q1-2024-brief report] (12-4-2024):
''"Osmosis revenue reached $11.2 million, up 63% QoQ and 700% over the past six months. Revenue was boosted by the implementation of a 0.1% taker fee on trades."''
==Usage==
==Usage==
* From a commissioned [[Messari]] [https://messari.io/report/state-of-osmosis-q4-2022 report] (16-2-2023):
''"Average daily active users (DAUs) on Osmosis grew 9.7% QoQ, rising from 22,700 in Q3 to 24,900 in Q4. This is a 32.5% decrease from the all-time high of 36,900 DAUs in Q1 2022. With that said, measuring the adoption of L1 networks should be done on a larger time scale; compared to a year ago the average DAUs have risen 134.9% from 10,600 in Q4 '21 to 24,900 in Q4 ’22. Each month in 2022 saw over 300,000 IBC transfer transactions into Osmosis. Currently, Osmosis has the most peers of any Cosmos chain with 50 peers. Osmosis’ top three peers by the number of transactions into Osmosis for Q4 are [[Evmos (EVMOS)|Evmos]] with 251,000, [[Cosmos (ATOM)|Cosmos]] Hub with 192,000 and [[Bostrom]] with 149,000.''
''Over 50% of transactions on Osmosis are swaps and IBC transfers. To access the liquidity of Osmosis, users transfer assets into Osmosis and swap or users swap for their desired asset and transfer out of Osmosis.''
''Governance participation is also a significant proportion of the transactions on Osmosis. Accounting for 10-20% of the total transactions, this is not only due to high participation in governance but also a high number of proposals submitted – there were 54 proposals submitted in Q4, alone."''
*From a commissioned [https://messari.io/article/state-of-osmosis-q2-2022 report] by Messari (14-7-2022):
''"Almost all metrics took a hit in the aftermath of [[Terra Classic (LUNC)|Terra’s]] collapse; volume, [[liquidity]], and user counts were all down to various degrees."''
===Projects that use or built on it===
===Projects that use or built on it===
* From a commissioned [https://messari.io/report/state-of-osmosis-q3-2022 report] by Messari (12-10-2022):
''"Currently, there are 53 projects building on Osmosis. They will bring decentralized perpetuals, CDP-based composable collateral, yield optimization, and lending markets to the ecosystem. [[Circle]], the second largest stablecoin issuer, announced it will be launching a Cosmos-native [[US Dollar Coin (USDC)|USDC]] in 2023, signaling a larger interest in the Cosmos ecosystem."''
==Competition==
==Competition==


Line 78: Line 149:


*Full team can be found [here].
*Full team can be found [here].
*[[Sunny Aggarwal]]; Co-Founder of Osmosis and Sikka, a builder and lead researcher at [[Cosmos (ATOM)|Cosmos]].
*[[Sunny Aggarwal]]; Co-Founder of Osmosis and Sikka, a builder and lead researcher at [[Cosmos (ATOM)|Cosmos]] [https://blog.cosmos.network/cosmos-history-inception-to-prelaunch-b05bcb6a4b2b since 2017] while working at [[Tendermint|All In Bits]].
*Dev Ojha; co-founder and has been in the Cosmos ecosystem since 2017 while working at All In Bits.
*Chjango, Shelly Chang, Jim Yang; have been in the Cosmos ecosystem since 2017 while working at All In Bits.
*Founders include former [[Cosmos]] core dev & former co-founder of [[Keplr Wallet|Keplr]] [[wallet]], the most popular wallet in Cosmos eco ([https://twitter.com/TaschaLabs/status/1512867955104571394 10-4-2022]).
*[https://medium.com/@SenateLabs/landscape-of-pro-delegate-next-wave-of-dao-governance-f239cd8537ea Has] [[Flipside]] and Reverie as some of their professional delegates (30-11-2022).


===Funding===
===Funding===

Latest revision as of 06:44, 15 April 2024

The first IBC enabled AMM DEX within the Cosmos ecosystem.

Basics

  • Based in:
  • Started in / Announced on:
  • Testnet release:
  • Mainnet release: 6-2021

History

  • Inspired by Balancer, Osmosis will support unique liquidity-provider strategies with multi-asset pools, weighted pools, and liquidity bootstrapping pools (LBPs)

Audits & Exploits

Bugs/Exploits

"The Osmosis chain is back live from a ~2hr unexpected chain halt. The root cause was a bug in the Cosmos SDK's cache KV store, causing a deadlock when multiple cachekv stores get layered on top of each other. This issue was originally discovered by the @osmolabs team last year and patched with help of the @cronos_chain & @binary_builders teams. However, while the patch was backported into the osmosis-labs fork of the cosmos sdk, due to a branch management issue, the patch was accidentally reverted in Osmosis v20. Due to this being a particularly hard to reach edge case, the bug lay dormant for the last month until finally getting triggered by a transaction today."

"Thankfully, the swift and decisive action taken by Osmosis validators and community members allowed scope of exploit to be relatively small. While detailed calculation is still in progress, the total amount overdrawn is estimated at around $5M. All losses will be covered. A small number of wallets were responsible for the majority of exploited funds, and we are confident that we will have a high recovery rate from these wallets. The bug itself was simple, and involved incorrect calculation of LP shares when adding and removing liquidity from pools. The core development teams contributing to Osmosis take full responsibility for this oversight."

  • One of the Osmosis validators, FireStake, came out (9-6-2022) confessing they had turned $226 into ~$2M before panicking and coming clean. "We were thinking about our family's future, and not the future of our community".
  • From Junonaut (8-6-2022):

"A critical bug has been found on $OSMO which could have potentially drained all liquidity pools. It has been discovered after a post on the subreddits /r/CosmosNetwork and /r/OsmosisLab. The chain was halted under immediate emergency to avoid further damage."

Governance

Admin Keys

DAO

  • Has Flipside and Reverie as some of their professional delegates (30-11-2022).
  • From a commissioned report by Messari (14-7-2022):

"According to Flipside Crypto, it takes about 22 days on average for a wallet to engage with governance, and only 7% of wallets holding OSMO have never voted. Deeper analysis of governance participation by number of wallets shows a left-skewed data set. Roughly half of all Osmosis wallets participated in 10% or less of submitted proposals. That’s equivalent to about 20 proposals. The other half is more active, ranging from 10% up to 100%. A very select number of wallets (134) achieved perfect attendance. Surprisingly, there was one specific participation rate that was an outlier: more than 7,750 wallets participated in 80% of all proposals, but go up or down a few percentage points and it falls back down to a few hundred. Those wallets likely belong to members of the internal team, active outside investors, or those delegating with a large bloc."

Treasury

Token

Launch

Token Allocation

Utility

Other Details

Stablecoin

Coin Distribution

Technology

Implementations

How it works

"Osmosis is a sovereign decentralized exchange (DEX)-focused app-chain in the Cosmos ecosystem, meaning it simultaneously serves as a blockchain and an application. The application operates similarly to other automated market making (AMM) functioning DEXs – liquidity providers (LPs), which are responsible for supplying liquidity to asset pools where traders can make trades from. It’s the same model for Uniswap or Balancer, though more similar to the latter as Osmosis places a high priority on offering asset pool customization. Tweaks to market-maker functions, swap costs, token weighting, and more are all parameters that can be changed within the DEX. Additionally, Osmosis has introduced new features such as superfluid staking that allows users who provided liquidity in certain pools to also stake to help secure the network. In the future, Osmosis will also offer maximal extractable value (MEV) mitigation and capture, stable pools, and more."

"Osmosis is a highly customizable AMM allowing for the creation of diverse liquidity pools, self-governing frameworks, and unique bonding curves. One of the most compelling aspects of Osmosis is its proposed reversed staking derivatives design."

Fees

"Proposal 354: Implement a Minimum Transaction Fee (Signaling) – Initially published in September, voting concluded on November 10 with 99.6% of votes in favor. Prior to this proposal, Osmosis had no protocol-level minimum gas fee, which allowed users to transact on the network for no. This made it very intuitive for new users transacting on the network, as they did not need to bridge a native token. An unforeseen vulnerability of this was that Osmosis could be the victim of DDOS attacks (where malicious users clog the network with spam transactions). The minimum fee was eventually decided to be 0.0025 uOSMO and can actually be paid in an equal value of any token, not only OSMO. This protects the network from DDOS attacks, while still not costing the end user any significant amount."

Upgrades

  • V14, Neon Upgrade got deployed 23-1-2023.
  • Introduced a stable swap AMM (8-12-2022).
  • From a commissioned report by Messari (12-10-2022):

"The Oxygen Upgrade aims to “breathe life” into the Osmosis developer ecosystem through four distinct features: TWAP pricing, upgraded Interchain Accounts Module, Stargate Queries, and expedited proposals for emergencies."

Staking

  • From their blog (28-2-2022):

"Superfluid staking allows Osmosis liquidity providers to stake the OSMO in their LP shares (GAMM). Because superfluid staking adds to the security of the chain, superfluid positions also earn staking rewards on top of the usual fees and liquidity mining incentives."

Validator Stats

"QoQ, the number of OSMO staked increased by 9.6 million OSMO to 210.3 million total OSMO staked. This was an increase of 4.8% QoQ, and resulted in 41.7% of the total outstanding OSMO supply staked by the end of Q4. The number of validators in the Osmosis validator set increased in Q4, from 135 to 150 following a passing governance proposal."

  • From a commissioned report by Messari (14-7-2022):

"Osmosis finished Q2 with 135 validators providing security to the chain, up 14.4% from the previous quarter. That rounds out the Nakamoto Coefficient to 7, up marginally from last quarter’s value of 6."

Liquidity Mining

Scaling

Interoperability

Other Details

Oracle Method

Privacy Method

"Osmosis is developing a private mempool with threshold decryption. These private transactions cannot be seen by nodes until after they are executed, making front-running much more difficult as well as allowing limit orders and other future/contingent transactions to be put on-chain privately. Similarly, appchains can reserve the first slot in their blocks for protocol-controlled arbitrage and liquidations: a necessity for the health of lending and trading protocols, but which on monolithic chains tends to become an MEV game, leaking value from the app to third parties. Osmosis will instead be directing these healthy, non-user-harming arb profits back to the DAO."

Compliance

Their Other Projects

Roadmap

  • Can be found [Insert link here].

Revenue

"Osmosis revenue reached $11.2 million, up 63% QoQ and 700% over the past six months. Revenue was boosted by the implementation of a 0.1% taker fee on trades."

Usage

"Average daily active users (DAUs) on Osmosis grew 9.7% QoQ, rising from 22,700 in Q3 to 24,900 in Q4. This is a 32.5% decrease from the all-time high of 36,900 DAUs in Q1 2022. With that said, measuring the adoption of L1 networks should be done on a larger time scale; compared to a year ago the average DAUs have risen 134.9% from 10,600 in Q4 '21 to 24,900 in Q4 ’22. Each month in 2022 saw over 300,000 IBC transfer transactions into Osmosis. Currently, Osmosis has the most peers of any Cosmos chain with 50 peers. Osmosis’ top three peers by the number of transactions into Osmosis for Q4 are Evmos with 251,000, Cosmos Hub with 192,000 and Bostrom with 149,000.

Over 50% of transactions on Osmosis are swaps and IBC transfers. To access the liquidity of Osmosis, users transfer assets into Osmosis and swap or users swap for their desired asset and transfer out of Osmosis.

Governance participation is also a significant proportion of the transactions on Osmosis. Accounting for 10-20% of the total transactions, this is not only due to high participation in governance but also a high number of proposals submitted – there were 54 proposals submitted in Q4, alone."

  • From a commissioned report by Messari (14-7-2022):

"Almost all metrics took a hit in the aftermath of Terra’s collapse; volume, liquidity, and user counts were all down to various degrees."

Projects that use or built on it

  • From a commissioned report by Messari (12-10-2022):

"Currently, there are 53 projects building on Osmosis. They will bring decentralized perpetuals, CDP-based composable collateral, yield optimization, and lending markets to the ecosystem. Circle, the second largest stablecoin issuer, announced it will be launching a Cosmos-native USDC in 2023, signaling a larger interest in the Cosmos ecosystem."

Competition

  • According to its docs, Osmosis aims to differentiate itself from other AMMs by offering customizable bonding curves suitable for different situations.
  • From Bankless (25-3-2022):

"Osmosis is most similar to Balancer, in that it allows for the creation of highly customizable, multi-asset pools, but also incorporates elements from other AMMs while bringing unique features of its own to the table. For instance, each liquidity pool is “self-governing,” with liquidity providers having governance rights over its parameters. Like Curve, LPs must lock their tokens to participate in governance, with voting power, and boosted liquidity mining rewards, proportional to the length of the lock period."

Pros and Cons

Pros

Cons

Team, Funding, Partners

Team

  • Full team can be found [here].
  • Sunny Aggarwal; Co-Founder of Osmosis and Sikka, a builder and lead researcher at Cosmos since 2017 while working at All In Bits.
  • Dev Ojha; co-founder and has been in the Cosmos ecosystem since 2017 while working at All In Bits.
  • Chjango, Shelly Chang, Jim Yang; have been in the Cosmos ecosystem since 2017 while working at All In Bits.
  • Founders include former Cosmos core dev & former co-founder of Keplr wallet, the most popular wallet in Cosmos eco (10-4-2022).
  • Has Flipside and Reverie as some of their professional delegates (30-11-2022).

Funding

"Osmosis raised a $21M in a token sale in October led by Paradigm"

Partners

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