Osmosis (Holiday) Updates from the Lab — 2021/12/22, ft. Lum Network and Regen
Osmosis Updates from the Lab occurs every Wednesday at 10 AM EST (3 PM UTC) on the Osmosis Zone Twitter Space.
Happy holidays, one and all, from the Osmosis team!
This holiday week, Closmongton brought us a lump of coal in the form of our v6 “Carbon” chain upgrade. Carbon passed on a hot-fix basis by validator consensus because last Tuesday’s v5 “Boron” upgrade was preventing new IBC connections from being made (existing IBC connections were not affected). Since the successful upgrade, Chihuahua and Lum Network have been able to establish new IBC connections and spin up their liquidity pools. The quick passage from Boron to Carbon has been a good test case, proving that the validators can come to consensus quickly and fix any emergencies that may occur in the future.
Sunny endorsed the CosmWasm integration proposed by Ethan Frey and the Confio team, the developer team behind CosmWasm. The Osmosis community has come out overwhelmingly in support of the integration, both in the Commonwealth discussion and in the vote (Prop 107), which has passed with 99.03% approval and just missed having the highest-ever turnout in Osmosis governance at 62.01% (behind the Boron upgrade proposal by a mere three hundredths of a percent).
The CosmWasm integration will bring permissioned smart contracts to Osmosis, enabling it to foster the growth of interchain DeFi. CosmWasm has already created tens of billions of dollars on Terra and Secret, and Juno’s Moneta upgrade just enabled version 1.0 on Juno. At its core, this integration will enable permissioned contracts on Osmosis to interact with contracts on Terra, Secret, Juno, Umee, Agoric and more, enabling a whole world of cross-chain composability. Furthermore, the custom integration will allow the DEX to interact more fully with CW20 tokens and, conversely, for CosmWasm contracts to mint sdk.Coin denominations, letting SDK and CW standards interoperate seamlessly. Less obviously, perhaps, the integration will also enable Osmosis to become an oracle provider, for example by sending TWAP data (time-weighted average price) throughout the Cosmos, which will help to keep interchain DeFi accurate and available.
In establishing this relationship with Confio, Osmosis is aligning with one of the top developer teams in the Cosmos. If you didn’t watch the Clawback Party (recap), you missed Ethan talking about the early Cosmos, when he was the first engineer hired by founders Jae Kwon and Ethan Buchman. He and the Confio team have built CosmWasm into a spectacularly successful platform for smart contracting. The benefit to Osmosis of aligning ourselves with such proven developers deeply embedded in the ecosystem is immeasurable.
Our first guest this week was Fabrice Bascoulergue of the Lum Network, which is currently bootstrapping liquidity for their $LUM token with an Osmosis LBP. Their over-arching vision is “helping businesses create trust with their users,” which in the blockchain world is somewhat fraught. However, they are focused on decentralizing and making trustless a narrow portion of the marketing stack: user-generated content — product reviews, in particular. Normal reviews tend to be unreliable, opaque, expensive for buyers and poorly compensated for reviewers, and subject to manipulation by retailers and brands. With their partner, French firm Skeepers, the Lum Network aims to test this use case starting in the new year.
Starting in January or February, Lum will be posting the user-generated reviews it gets from Skeepers to its blockchain. It is expecting to see 3-4 million reviews put on chain per month. Once there, the reviews will be timestamped and subject to algorithmic moderation. This process will determine the quality of the review based on features like: word count, a gibberish filter, and whether it contains a picture. Reviewers will be paid in $LUM on the Lumki mobile app based on the quality of their reviews. The team is working to advance beyond their basic algorithm to develop a social proof system that rates reviews according to their perceived usefulness, a more complex version of “Did this review help you?”
For more on Lum Network, check out their Medium; see their whitepaper for a concise, image-rich overview; or check out our preview article on them. You can get in touch with them on Telegram and Twitter.
Greg Landua was back this week to celebrate the season and the easy passage of Prop 101 (98% in favor with 49.78% turnout), the DAO-to-DAO grant of 1.399 million $REGEN tokens from the Regen Network to Osmosis.
This aligning of incentives indicates that the protocols (communities and developer teams) support each other and their goals and vision for the future. Broadly speaking, this means that the Osmosis community supports Regen’s vision of bringing ecological assets on-chain so that they can be used in interchain DeFi. Practically speaking, the Osmosis treasury has been enriched and modestly diversified, and the community has agreed to use the $REGEN in accordance with the stipulations in the proposal:
“We expect this allocation to be used strategically for protocol-owned liquidity provision, use-cases exploring eco-credits, modest provision of yield farming provisions, matching grants to public goods, and open-source development funding.”
These strategies were arrived at over the course of a few months of discussion on Commonwealth, another big win for deliberative Osmosis governance along with the CosmWasm proposal. Deliberative governance is not just about avoiding the surprise, hurt feelings, and wasted energy produced by proposals that are hastily cobbled together and put on-chain without community feedback; the process leads to new and better ideas. As Greg notes, “the community helped us generate better ideas than we already had.” That is, the community generated the ideas that the $REGEN should not be used just for yield farming but for Protocol-Controlled Value (PCV), grants, and even the idea that Osmosis could offset its carbon emissions and go carbon-neutral or negative.
While Osmosis offsetting its emissions was not in the proposal, Greg says the Regen team is almost done developing it. It would, he suggests, be a substantial branding win for Osmosis. He envisions a future where users of a service or product ask themselves, “Does this product destroy my world a little, or does it regenerate it?” If he is right, a regenerative “halo” will increase brand loyalty and entice new users to Osmosis.
With regenerative finance, Regen is trying to provide powerful “selfish” reasons to do altruistic things. Public goods funding can function in a similar way, benefitting everyone in the ecosystem while also generating a virtuous aura around the brands and tokens involved — provided the funding is done intelligently and with consensus.
Given its large treasury, Osmosis is poised to aggressively fund public goods and further cement itself as what Greg calls a “liquidity hub and community engagement engine.” We just had a new proposal, Prop 110, that aims to do just that, by rewarding the Cosmoverse team for its hugely successful conference in November, and Sunny has been collaborating with Blockchain at Berkeley to generate ideas about how best to use the Regen grant. We will discuss those possibilities as they arise, and in the meantime, we welcome community proposals about the grant and other public goods funding on Commonwealth or social media.
Greg’s final message for us during this holiday season is that the Cosmos emphasis on sovereignty and interoperability is beautiful. It helps make the ecosystem one of the most welcoming places for people to do regenerative finance and “crypto for good.”
So, happy holidays to all and sundry, near and far! The team will be taking a much-deserved break next week, and Sunny will be catching up on his correspondence. We will see you all again on January 5th for our usual meeting and for a special Community Town Hall.
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