How Osmosis is Boosting Liquidity for the New Age of AMMs

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POKT Network
Nov 19, 2023
How Osmosis is Boosting Liquidity for the New Age of AMMs

Osmosis is boosting liquidity under the Cosmos ecosystem while focusing on interoperability for a future based on decentralized financial systems. Pocket Network is supporting Osmosis on this mission. Discover more about Osmosis and how it is thriving in the Pocket ecosystem.

Osmosis: An AMM with the Decentralization and Power of the Cosmos Ecosystem

Osmosis is a Proof-of-Stake (PoS) blockchain, bringing liquidity to the Cosmos ecosystem with an Automated Market Maker (AMM). In turn, Osmosis is creating more use cases on Cosmos and boosting its performance and scalability.One of the key features of Osmosis is its flexibility and interoperability, two themes that are also critical for Pocket. The Osmosis design allows developers to create AMMs with parameters that are adjustable to market conditions, while bringing out even more efficiency and use cases for people and protocols.For crypto and DeFi to reach a new level of maturity, tools need this flexibility to adjust liquidity pools to market conditions, reaching an equilibrium between swap fees and liquidity. Osmosis offers this flexibility while working as an AMM service for projects wanting more flexibility, scalability, and cross-chain ability.Osmosis, via Inter-Blockchain Communication (IBC), enables cross-chain transactions between Tendermint-based chains to occur in a fast, cheap, and scalable manner. Osmosis’ growth as a decentralized exchange of value has boosted the number of transactions in the Cosmos ecosystem and its importance as a truly buildable chain.

Why Cosmos SDK?

Osmosis builds upon the Cosmos SDK, a customizable framework for new applications and networks to emerge with full scalability, security, and cross-chain ability.Osmosis is one of the use-cases that Cosmos SDK enables, with projects able to immediately tap into its ecosystem of chains through IBC, leading to improved adoption and enabling new forms of value propositions.Cosmos enables this framework for projects like Osmosis based on modularity, interoperability, and PoS. With Cosmos, protocols can adapt to specific user needs by building with blocks/modules, utilizing a network of chains to trigger adoption, and maintaining security, scalability, and efficiency.

Governance Through the OSMO Token

Osmosis’ native token, OSMO, works as the governance vehicle in the ecosystem, enabling holders who have staked tokens to influence the future of the project.The adjustability of the protocol also comes from its governance, with holders having a vote on the base networks swap fee in addition to oversight on upgrades and rewards.In the future, OSMO will evolve from a governance token to possess additional features, with the protocol calling it a “Cosmos Hub shared security zone.”

A Top 20 Chain in DeFi While Growing Across Segments

According to DeFi Llama, Osmosis is currently the 19th biggest chain in the Decentralized Finance (DeFi) ecosystem, ahead of popular chains like Aurora, Celo, and EOS.Osmosis currently supports over $200M in Total Value Locked (TVL), growing by over 10 percent in the last month (despite the overall bear market) and showing its strong value proposition for the space.Beyond its main AMM, Osmosis is powering more use cases in DeFi, from analytics tools to wallets, NFT projects, bridge mechanisms, decentralized applications, and community-driven projects.Osmosis’ ability to tap into Ethereum or EVM-compatible networks also enables it to offer new scale in this ecosystem. Given its interoperability between IBC chains, it helped to boost the number of transactions on IBC by over 8,000% in just one year.

Pocket is Supporting a New Paradigm of Decentralization with a Focus on Quality of Service

Pocket Network is supporting Osmosis to enable full scalability, efficiency, and resilience for decentralized applications wanting to tap into the chain’s ecosystem.With Pocket, app developers working with Osmosis can benefit from a network of tens of thousands of nodes and enjoy a cost-efficient solution with maximum uptime for Osmosis data.At Pocket, app developers can currently enjoy a free tier of service, enabling up to 1 million relays per day, or “level up” with a cost-effective payment structure to access blockchain data in a more scalable manner far beyond the free tier.Osmosis has been growing within the Pocket ecosystem, staying close to 600,000 daily serviced relays, growing 27% in recent weeks, and establishing itself as a chain to watch in the Pocket ecosystem.

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