Osmosis is a leading decentralized exchange (DEX) built using the Cosmos Inter-Blockchain Communication (IBC) protocol and the Cosmos SDK. The advanced automated market maker (AMM) is the leading DEX on Cosmos and the largest interchain DEX in the crypto market that supports cross-chain transactions.
One of the popular cross-chain DeFi protocols, Osmosis lets users launch liquidity pools with unique characters and offers a flexible incentive structure that lets it stand apart from its competition. The customizable AMM platform also allows users to create and manage non-custodial, self-balancing, interchain token indexes and draws inspiration from another leader in the DeFi market, Balancer.
Osmosis supports custom-curve AMMs, dynamic adjustments of token swap fees, and multi-token liquidity pools. In addition, it can also be used to create decentralized token fundraisers, host interchain staking operations, options market, and bonding curves.
OSMO is the native crypto asset of the Osmosis ecosystem and serves as the governance token of the protocol. OSMO holders enjoy voting rights to participate in the decentralized governance mechanism of the Osmosis exchange, where they can contribute their thoughts on future upgrades, allocate liquidity mining rewards for bonded liquidity gauges, and set the network’s base swap fees.
The Osmosis DEX can be used for the following functions:
The Osmosis cross-chain DEX lets you swap tokens across multiple blockchain networks in a decentralized and non-custodial manner without using a cryptocurrency exchange.
The Osmosis AMM lets users create highly flexible and customized liquidity pools. Liquidity providers (LPs) on Osmosis can craft optimal strategies based on block times, slippage, transaction fees, market volatility, etc.
Osmosis features a unique pool governance feature that lets users create and adapt liquidity pools based on risk tolerance and other strategies. Users who contribute liquidity within a liquidity pool on Osmosis also enjoy fractional ownership and can participate in strategic decision-making opportunities within the liquidity pool.
Osmosis offers AMM as a serviced infrastructure letting liquidity pool creators make instruments more accessible and efficient. This makes the AMM more customized and suited to various instruments, such as pegged assets, derivatives, options, and tokenized leveraged positions.
The Osmosis AMM protocol was announced in October 2020 by Sunny Aggarwal, Josh Lee, and Dev Ojha. Inspired by Balancer, the Osmosis exchange went live in June 2021, allowing developers to create customized AMMs with the existing liquidity pools and modules it supports.
The leading DEX of the Cosmos ecosystem was the first protocol that made IBC transfers popular, highlighting the potential of cross-chain transfers and interconnectivity between different blockchain networks. It became the first AMM operating on Cosmos, allowing the blockchain’s users access to DeFi services like trading, earning passive income, liquidity provisioning, swapping tokens, and more.
In 2022, the dApp enjoyed a TVL of $17 billion in trading volume across more than 100 pools and tokens. Osmosis accounted for over 50% of the volume of IBC transfers across 50 different blockchains in the year.
In March 2022, Osmosis announced a new Superfluid Staking feature so users could bond LP shares and stake $OSMO, letting users contribute to improving the protocol’s security and earning incentives. The protocol also introduced multi-token gas payments to let users pay transaction fees in any whitelisted token supported by the DEX.
The Osmosis cryptocurrency could be a good investment to consider, especially if you believe in the potential of decentralized finance (DeFI). The OSMO price could strengthen as more users sign up for the Osmosis protocol and leverage its services.
The higher on-chain activity could make the OSMO governance token a more valuable crypto asset to buy and hold. In addition, the Osmosis token price could also make gains as the platform adds support for more assets and launches more liquidity pools, which could drive up the on-chain activity.
The price of OSMO coin could also enjoy support from positive sentiment in the crypto market. A risk-on mood among investors towards cryptocurrencies in general and DeFi specifically could drive up the Osmosis price. On the other hand, bearish sentiment or risk-averse attitude among investors could weaken the OSMO price.
While it is impossible to make an accurate OSMO price prediction, there are several factors to monitor if you wish to understand the price action in the OSMO crypto:
As more users and developers sign up for Osmosis’s advanced AMM solutions, the resulting uptick in on-chain activity could boost the OSMO price statistics. Adding new blockchains to IBC could also increase the number of liquidity pools and offerings, adding more users and driving up the value of the Osmosis token.
As the developers behind the Osmosis protocol introduce new products, list new tokens, or roll out upgrades that improve the overall functionality and bring new features, the platform could turn even more attractive to users. This could increase investor interest in its native token, supporting gains in OSMO price.
How investors perceive the crypto market and the DeFi sector plays a vital role in determining price trends in the OSMO coin. Positive sentiment towards digital assets and decentralized finance could encourage more investors to buy and hold OSMO, increasing the price of Osmosis crypto. However, a risk-averse sentiment could cause sell-offs that could weaken the price of OSMO token.
$OSMO is the native token of the Osmosis protocol and serves the following functions:
As an OSMO holder, you can enjoy voting rights by staking your holdings on Osmosis. You can participate in the decentralized governance of the protocol and contribute your thoughts on future upgrades, liquidity mining rewards, and swap fees.
The Superfluid Staking feature of Osmosis mints and burns $OSMO tokens as part of the Osmosis network’s Proof of Useful Stake consensus mechanism. Users who stake their crypto assets within the liquidity pools receive a representative share of OSMO crypto that gets delegated to validators. In addition to earning passive income, it also improves the overall security of the Osmosis ecosystem.
Trade Osmosis coin against other crypto assets and profit from market conditions and volatility changes. You can buy or sell OSMO against other cryptocurrencies or hold it long-term if you believe in the future potential of the Osmosis DeFi protocol. Review the Osmosis price, OSMO market cap, circulating supply, 24-hour trading volume, and the latest crypto news before you trade OSMO.
The max supply of OSMO is set at 1 billion, of which 100 million were released as initial supply at genesis. The developers plan to reduce token issuance by one-third every year - releasing 300 million tokens in the first year, 200 million tokens in the second year, 133 million tokens in the third year, and so on over nine years until the max supply is hit.
The OSMO token distribution is given below:
1. 25% of the OSMO supply is allocated for staking rewards.
2. 25% is locked in developer vesting.
3. 45% is set aside for liquidity mining incentives.
4. 5% of $OSMO has been allotted to the community pool.
Staking OSMO is a convenient way to earn rewards and grow your crypto holdings while improving the Osmosis ecosystem’s overall security. Here’s how you can stake $OSMO:
1. Set up your Keplr wallet by registering for an account. Ensure that your wallet is sufficiently funded with OSMO tokens by buying them on KuCoin or other supported platforms and withdrawing OSMO to your wallet.
2. Launch the Osmosis dApp and connect your Keplr wallet to its interface.
3. Click on the Stake section of the app. This will open a new window that leads you to the Keplr wallet app, where you can stake Osmosis tokens.
4. Review the list of available validators, their voting power, commissions, and APRs. Find the option best suited to you and click on Manage.
5. Click on Delegate and enter the number of OSMO tokens you wish to stake via the validator of your choice.
6. Click on Delegate to confirm the transaction and lock up your $OSMO tokens for 14 days.
7. Sit back, earn rewards, and watch your holdings grow by staking $OSMO.