Osmosis Updates from the Lab, ft. Fetch.ai, Superfluid Staking, & Bridges — Feb. 16, 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.
The new time of 1 PM EST was a hit with our panel, including Sunny, Eddie, WorkerBee and first-timer Waterspinner (social admin). As a plus, Twitter didn’t rug us!
This week featured a big announcement: superfluid staking looks to be on track for Feb. 28th, so get ready! Also, our bridge service provider discussions will now come to a head next Wednesday with a Town Hall at 3PM EST (6 PM UTC) after Updates. We also continued to discuss incentives, and we got a peek at how stableswaps and threshold encryption may figure into the six-month roadmap. Finally, Fetch.ai was here to talk about the latest in their development of Autonomous Economic Agents, self-learning bots that can make you money while you sleep.
Superfluid Staking
The team is laser-focused on getting superfluid shipped by Feb. 28, and while nothing is certain, it is looking promising for Sunny’s hair! To meet our self-imposed deadline, superfluid staking must be fully coded and put into testnets in the next few days.
We’ll be releasing an article shortly covering the launch more fully, and the Osmosis Support Lab will also put out an explainer and FAQ. In the meantime, there are a few things you should know.
In order to get superfluid working with an attractive UX, we have put some restrictions on it at launch.
- Pool #1, ATOM/OSMO will be the only superfluid pool at launch
- Validator/governance: LPs will be restricted to one validator per pool, and they will be unable to override validator votes or re-delegate without unbonding over 14 days and rebonding
These restrictions improve the safety and user interface of what is essentially a beta launch. Superfluid staking is the biggest change in a proof-of-stake network since the beginning of proof of stake, since no other protocols that we know of allow portions of LP shares to help secure a public blockchain.
Note: if you want to superfluid stake your previously staked OSMO, you will need to unstake them and use them to provide liquidity in Pool 1. However, if you are already 14-day bonded in Pool 1, you will automatically be able to superfluid stake that position.
Bridges
We’re having a bake-off! Next Wednesday, at 3 PM EST (8PM UTC), we are gathering bridge service providers to answer questions and pitch the community on why they should be the canonical bridge for Osmosis. For the argument that Osmosis governance should pick one bridge service provider, largely to avoid the horrible UX and fragmented liquidity of endlessly multiplying token representations (aETH, bETH, cETH, etcETH) see “Thoughts on Osmosis and Bridges.”
We have circulated an RFP (request for proposal) to Gravity, Axelar, Wormhole, Sif, Nomad, and any other potential provider who wants to participate. Among the things we are looking for are good UX flows (direct deposits/withdrawals, deposit addresses), multi-EVM support, credible neutrality (not controlled by a competitor), support for non-token transfer functionality (NFTs, interchain accounts), and a focused team for whom the bridge is their primary product rather than a secondary thing that can be abandoned. We have also requested a bridge demo. They are submitting these today and tomorrow, and we will curate and publish them for the community ahead of the meeting.
After the Town Hall, we will vote, most likely using a series of linked proposals: “Do you want X to be the bridge service provider?” Yes/No. “Do you want Y?” Yes/No. The bridge provider with the highest number of votes will become the canonical bridge, though other bridged assets will, as always, have permissionless access to the Osmosis chain, and can be listed by other front ends and token lists. (For more on this, see the discussion of token lists last week, or fungibility pools two weeks ago.)
With Fetch.ai having just enabled IBC last week, RV and Atari Buzzk1ll from the marketing team stopped by to tell us what they’re developing. The team started on Binance in 2017, expanded to Ethereum, and launched their mainnet on Cosmos last March. What they are building is an infrastructure of Autonomous Economic Agents. These “digital twins” can be assigned to interact with complex ecosystems according to certain rules, performing tasks from helping you find a parking spot to managing your liquidity.
The graphic above shows broadly how they envision AEAs interacting and learning from each other in an Open Economic Framework that consists of a p2p communication network, the protocols for agents to talk to each other and the outside world, and a search and discovery system.
BotSwap, their primary working product so far, is an AEA that automates DeFi liquidity management on Uniswap and Pancakeswap. Users create Agents and give them Triggers such as withdraw or swap at various price points. BotSwap does not learn, but it does use FET tokens to keep the Agents running and so represents a very basic version of what Fetch.ai plans to accomplish. The grander vision is still very much in development: the team dedicated 2021 to setting up the developer framework, and in 2022 they are looking to attract developers to build AEAs. It is an exciting idea, and hopefully later in 2022 and 2023 we will start to see more and more of these self-learning digital agents.
Fetch.ai has numerous social media outlets. RV and Atari Buzzk1ll made specific mention of the Reddit, and they also have Telegram, Discord, Twitter, and YouTube channels.
Incentives
Last week, we talked about being more strategic with our incentives, given the flood of expected CosmWasm tokens and bridged assets. OSMO incentives are going to decline no matter what (at least in OSMO terms), with the Thirdening this summer. Fortunately, this first year of incentives has fulfilled its initial goal of bootstrapping liquidity on Osmosis, and the onus will increasingly be on projects to help incentivize their pools.
To that end, it makes sense for Osmosis to update our incentives model. Instead of automatically granting free OSMO to every pool, we should begin to reserve it for pools that have external matching and for strategically important pools. Indeed, we have already begun to see Osmosis governance be somewhat more reticent to rain incentives on newer pools, particularly those from less well-known projects.
In future, it may be useful for new projects requesting Osmosis incentives to put forth more detailed plans in their proposals about their incentivization plans, and about their projects in general.
Beyond matching incentives, we still need to subsidize strategically important pools like UST/OSMO and ATOM/OSMO, though the latter (as a relatively safe-harbor pool that will soon have superfluid staking) may be somewhat over-incentivized at the moment. I expect there will be many public discussions about which pools fall into this category and how heavily they should be incentivized. These are very much open questions, and everyone is encouraged to participate on social media and Commonwealth.
Threshold Encryption
This all-important Osmosis feature is slowly moving up the queue. It has taken a bit of a back seat to superfluid staking, UI improvements, and stableswaps: each one nearly as important and much less time-consuming, since threshold encryption is likely a six-month lift.
Threshold requires ABCI++, a major upgrade that should be coming soon, when Tendermint releases version 0.36. ABCI++ will greatly increase the flexibility of the Application Blockchain Interface, which mediates between the Cosmos SDK and the Tendermint consensus layer.
On the cryptography side, the Osmosis team is working with Anoma, and we hope to be able to hire more cyrptographers soon, so if you are experienced (especially if you know Rust), please get in touch!
Threshold encryption will make transactions in the mempool invisible to validators. Therefore, when they propose blocks, they will not be able to preferentially select transactions to create MEV. Sunny explained this more fully last fall. Interchain MEV is a more difficult problem, but one that is being worked on.
Threshold encryption is the single most important feature that Osmosis will offer. Private transactions are that important. If you think there’s no MEV on Osmosis, think again. Some of the world’s foremost MEV extractors, Edgar Aroutiounian and Dean Eigenmann (heads of Project Blanc), casually dropped on the Zero Knowledge podcast that they’re moving out of Ethereum and into the Cosmos and Osmosis. They did not offer up any methods, so presumably whatever they’re doing is working, which…makes me nervous.
That’s about it for this week, and we didn’t even have time to mention the snazzy new dashboard that’s upcoming from the Imperator data team. We’ll have them on soon!
Meanwhile, we’ll see you again next week at the new time! Be on the lookout for more articles on superfluid staking and our potential bridge service providers.
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