Osmosis Updates from the Lab — 2021/12/08, ft. Sergey Gorbunov (Axelar) & Shane V. (Stargaze)
Osmosis Updates from the Lab occurs every Wednesday at 10 AM EST (3 PM UTC) on the Osmosis Zone Twitter Space.
Hosted this week by Dynamicmanic, kevin, and Sunny Aggarwal
After last week’s Updates from the Lab was rugged by the Miami WiFi, we had a marathon hour and a half session to make up for it.
The team is back from DCentralcon. Voices (Kevin’s) may have been lost, but connections were made, including with our first guest, Sergey Gorbunov of the Axelar Network.
(For links to Axelar’s social media, some of their articles, and a brief biography of Sergey, see our teaser article.)
My biggest question leading up to this meeting was in what respects Axelar differed from IBC/Cosmos as an interchain protocol. According to Sergey, Axelar Network is an interoperability hub built to connect protocols with different consensus mechanisms — built not just to bridge assets, but to enhance composability more generally. While Axelar is a Cosmos chain, and thus can use IBC, its primary value-add is connecting chains that cannot easily interact with IBC, like Ethereum, Bitcoin, Doge, and others. It is difficult to add light client support to these chains, and therefore it is difficult for them to verify each others’ state transitions. Axelar can handle this for them.
Axelar aims to improve upon Thorchain’s Bifrost by being a more generalizable, customizable, and scalable interchain solution. Using Axelar, any protocol will be able to use another chain’s assets without the end user having to think about bridging, routing, wallets on different chains, etc. For example, a user might want to use their Metamask wallet to interact with an Osmosis LP position: Axelar would trustlessly enable that on the back end without the user needing to know anything.
Next, we heard from Shane Vitarana of Stargaze Zone. Stargaze is focused on onboarding new artists to the NFT space, and they believe that an app-specific chain on Cosmos is the best way to make that possible. Shane has a number of connections with generative artists, so look for the platform’s first offerings in Q1 2022 to be new generative art.
A central innovation of the platform is that the Stargaze DAO is expected to play a large role in funding and curating the projects that launch on the platform (in contrast to the centralized curation available on a platform like OpenSea). The Stargaze dev team is also a part of the effort to make NFTs interoperable over IBC. One potential feature that is just scratching the surface of what is possible in this space: fractionalizing NFTs and putting them into LPs on Osmosis.
Their planned Osmosis LBP is also groundbreaking. They are proposing (in consultation with the Osmosis dev team and advisors from Figment) that Osmosis lend 135k $OSMO to initiate the 95/5 LBP at 50M $STARS and the 135k $OSMO (starting price $0.28/token if $OSMO is $5.50). At the conclusion of the airdrop, Stargaze will pay back the loan in $STARS. The LBP will thus diversify the Osmosis community pool and align the communities’ incentives. (They are already airdropping to Osmosis LPs and using the Osmosis thirdening tokenomic model.) If the method proves popular, Osmosis will continue to become more attractive to smaller teams looking to bootstrap new tokens; likewise, small teams can get not only funds, but perhaps more valuable, a strong vote of support from the Osmosis community.
For more on Stargaze, see their recent Medium piece, and our introductory article.
Osmosis Updates
The Comdex LBP was very smooth. In the future, we aim to educate people about how these reverse-Dutch-auction-style offerings work: they generally start higher than the expected price, and the price goes down through an automatic reweighting of the pools (e.g. from 95/5 to 50/50). The downward price pressure of the reweighting is offset to the extent that people are buying the token. Unless there is constant buying pressure throughout the auction, the price will drop, so it is usually best to wait to ape in. (Stargaze has been working on an LBP simulator in advance of their upcoming LBP. You can play with the dials to adjust volume, duration, starting prices and weights, etc.)
The data analytics team is working on a personal dashboard that will include things like fees earned from LP positions, fees earned, impermanent loss, tax tools, and the like. Sunny hopes to have this out by the U.S. tax deadline of April 15.
A new chain upgrade is coming. The proposal should be live on-chain by Friday, in time to get the upgrade done early next week. The timing is important because one of the features of the upgrade is the Prop 32 $OSMO/$ION Airdrop Claw-back code, which is set to take place 180 days after the Osmosis genesis on Dec. 15th. Unclaimed tokens, according to Prop 32, are those that belong to wallets that received the initial 20% of the Osmosis airdrop, but never otherwise interacted with the chain. There are a surprisingly high amount of such wallets, which is good news for the treasury.
What to do with such a bounty? 1) Diversify — see Hasu’s article on DeFi treasury management, 2) encourage developers to build permissioned CosmWasm apps and tools on Osmosis, and 3) fund other Osmosis public goods, 4) Party….
The other two main aspects of the chain upgrade are 1) the Bech32 IBC routing improvements (developed in conjunction with Althea, this will let the chain handle IBC routing via the prefixes without the user having to know anything about IBC) and 2) the ability to pay Osmosis fees in tokens other than $OSMO. Right now, and possibly in the future, Osmosis fees are set to zero, so this won’t have an immediate impact, but if the chain becomes clogged or gets spammed, we will be able to turn on fees without giving up our smooth UX.
During question time, we had a discussion about getting women more involved in Osmosis, with the upshot being that improving accessibility across a number of spectra is a goal of Osmosis as a leader in the DeFi space. We had a technical discussion of Sunny’s proposed LBP v2, one that makes the reweighting a continuous block-to-block process. He noted that this is a common DeFi innovation : AMMs likewise make order books continuous, and perps do the same to futures.
The hot topic of OHM-style bonds in the Cosmos was again raised. Sunny mentioned that Nova DAO is planning this — you can check out their Discord for more information. Sunny is working on $ION ideas that involve bonding, but is not explicitly Olympus-like. He will share more soon. Similarly, he had previously joked about turning $ATOM into an OHM-style mechanism…and is now taking the joke more seriously. How, he asks, do we make $ATOMs more of a bet on the Cosmos ecosystem than they currently are? Perhaps, we could have $ATOM-holders become a DAO that invests in ecosystem projects and buys up their liquidity, OHM-fashion. It could be a way to leverage the economic weight of $ATOMs to invest in the Cosmos ecosystem.
A suggestion was brought up that we drive more traffic to the Osmosis app through our social media, particularly the Updates from the Lab. POAP (proof of attendance protocol) NFT badges met with general approval as a good idea. A time-sensitive code can be given out during events for people to claim their badges. They are fun to collect, help to drive community engagement, and could even be used to allow access to various features and activities down the road. Sunny knows someone (Larry) who was working on a CosmWasm version of POAPs, and he will check in with him about it.
Finally, Mozilla and Puma Browser developer Amber Case gave Stargaze, Osmosis, and the Cosmos a rave review. She heard about Osmosis a few months ago, aped in, and has been onboarding others into the Cosmos because it is ‘easy and fun’ compared to Dot, Ethereum, and others. She was inspired to go to Lisbon and has just turned in an entry for HackAtom!
A huge thank you to all our guests! We will see everyone again next week!
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