Osmosis Updates from the Lab, ft. Celer Network (Mo Dong) — Mar. 09, 2022
Osmosis Updates from the Lab occurs every Wednesday at 1 PM EST (6 PM UTC) on the Osmosis Zone Twitter Space. Replays are available on the Osmosis YouTube channel or the podcast.
It has been an eventful two weeks since the last Updates! Since then, superfluid staking has been successfully released in the ATOM/OSMO pool. Congratulations to the team!! 🙌 It is working so well that we already have a proposal on-chain to add OSMO/UST and OSMO/LUNA to the superfluid club (🙏Johnny Wyles), so expect that soon!
Last week, we canceled Updates in favor of our 3-hour Bridge Town Hall (read up on the long and short of it). Today’s big news is that the core team has come out in favor of Axelar, though it is ultimately up to the DAO to decide. We should be voting within the week, most likely with a series of approval (yes/no) votes. If two or more bridges come within a certain (undecided-as-of-yet) percentage of each other, we will have a run-off.
In other Osmosis news, the team barely paused to catch their breath from the superfluid sprint before starting to build a new set of features. First among these is a stableswap AMM, which will pave the way for pools like UST/USDC, UST/DAI, and others once those assets are bridged over. The stableswap AMM employs a different invariant from our regular constant-product (x * y = k) pools. The team is currently examining Andre Cronje’s elegant Solidly curve, x³y + y³x = k, which produces results similar to the more complicated Curve invariant depicted in the graph below.
Flattening the stableswap curve toward the constant 1:1 ratio (as you can see in the graph) results in lower-slippage trades, while still allowing for the assets to vary in price against each other according to market conditions. Stableswap would also be necessary for any sort of fungification of different representations of bridged assets, if we eventually go that route, and it will also allow us to make synth/non-synth pools with assets created by the ION DAO.
The team is also continuing to work with Confio to add CosmWasm features like the Token Factory (allows CosmWasm contracts to mint Cosmos native tokens), a TWAP oracle, and the upcoming lending protocol, Isotonic. External teams are continuing to work on the ION DAO (Alphaworks), a Yearn-like vault system (Quasar), and an automatically rebalancing ETF.
Finally, the incentives team (consisting mainly of Unity Chaos, Johnny Wyles, and Jeremy Parish) is hard at work devising a new routine incentive-adjustments scheme. Indeed, we should all be thinking about which pools to incentivize moving forward. We will not be able to incentivize every new project, but instead we will have to focus on strategically significant pools like OSMO/ETH as well as good projects that offer matching incentives.
Celer Network
This week, we talked to a representative from another bridge! Mo Dong is from the Celer Network, a project that began in 2018 by pioneering work on state channels and that has since progressed to more generalized bridging and cross-chain message-passing. The Celer cBridge currently consists of a state guardian network on a Cosmos PoS chain, one that has transferred billions of dollars of value in over 63 tokens from some 20 chains. It is already integrated with Terra and would simply have to make some modifications to integrate with Osmosis.
The bridge runs with two concurrent security models: a validator-run bridge for normal security, and a higher-security delay-buffered bridge that functions much like Nomad’s model. Celer does not support IBC because it wants to connect chains directly, without acting as an intermediary through which funds must pass.
Mo’s broader message for the day was that Osmosis (and other chains) should not lock themselves into one vendor but rather adopt a multi-bridge model. This bridge of bridges would also be secured by an “optimistic” delay buffer and a two-phase commit. All the bridges within the multi-bridge watch each other to make sure they are not submitting fraudulent transactions, and if one is, the bridge can be halted for remediation. Importantly, the multi-bridge forces its constituent bridges to mint into the same contract, which means all the tokens that it creates are fungible. Mo’s argument is that the multi-bridge model leaves the door open for new bridging technologies to develop and avoids having a single point of failure.
The multi-bridge is an interesting model, however, it would have the same 30-minute crushing latency of Nomad, and the engineering would be a heavier lift. And we are betting that the future of bridging will eventually be IBC connections to all chains, so any bridge we pick is a temporary solution until then. And if we later decide that a multi-bridge solution is one we want to use, we can simply upgrade Osmosis to allow it, which is one of the great benefits of running on our own sovereign blockchain.
That’s it for this week! Next Wednesday we will be having Gregory Landua and Will Szal from Regen come by to talk about their upcoming proposals to open up carbon-credit trading on Osmosis, incentivize the carbon-credit pools, and make Osmosis carbon neutral. We will also have Derek Hsue on to discuss the long-awaited Osmosis Grants Program, which has been revised according to community feedback and resubmitted on Commonwealth, in preparation for its impending arrival on-chain.
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