Osmosis Updates from the Lab Recap, Osmosis Ecosystem Building & Composable Finance, May 18, 2022
Osmosis Updates from the Lab occurs every Wednesday at 1 PM EST (5 PM UTC) on the Osmosis Zone Twitter Space. Replays are available on the Osmosis YouTube channel or the podcast.
Greetings from the Lab! Sunny joined us this week from Prague, where he was at the Gateway Conference. Lots of great Cosmos talks there (Day 1, Day 2), including Sunny’s chat with Cryptocito (notes).
The main focus of this week was building out teams and tooling for the Osmosis app-chain DEX suite. Also, Composable Finance came by to talk about their work connecting IBC (and Osmosis in particular) to the Polkadot ecosystem.
Osmosis Updates
Emergency hard fork: The fork to Osmosis v8 was successful. Kudos to the validators for their quick voting and implementation. As a result of the fork, over 50% of UST liquidity has been de-pooled already (as of the 18th). If you haven’t yet you probably should, unless you’re expecting UST on Osmosis to go up in price despite the first de-poolers likely selling their UST when the 2-week unbonding completes.
AXL Retroactive Incentives: The Axelar foundation has given 1% of the AXL token supply to the Osmosis foundation to administer as retroactive incentives for bridging over USDC, DAI, and ETH, which must then be LP’d. Beyond this, the details are still in flux (other qualifying assets, caps, etc.). The timing depends largely on when Axelar distributes their token (breaking: this will happen July 14). The reason for these incentives is so that the Eth-asset/OSMO pools get actual liquidity and do not just fill up with OSMO. Anecdote: I brought over some ETH through Axelar Satellite, and it was just as smooth as advertised, even without the full Osmosis front-end integration. It works through the Osmosis Assets page, but it also works if you just go to Axelar and route things appropriately. For a step-by-step guide, see this post by Max Power (one of our social media admins).
Changed Scope and Timing of Osmosis v9: As noted last week, due to the fall-out from Terra’s collapse, the developers had to push back the feature upgrade (then v8) that was to include stableswap, etc. Stableswap has now been temporarily deprecated in order to focus on Token Factory (mints native SDK coins from CW20s) and upgrading CosmWasm to wasmd 0.27.0 (which runs CosmWasm 1.0). These upgrades are critical for writing smart contracts on Osmosis, and therefore for bringing in new CosmWasm teams. On that front, Sunny reports that the Osmosis Grants Program has been very active in the past few days. More information (hopefully) to follow. The proposal for v9 is slated to enter voting this week, with v9 going live around the end of the month.
This slightly altered v9 demonstrates Osmosis continuing to pursue its vision as the interchain DEX suite, a full but permissioned DeFi ecosystem focused on giving the best possible trading experience, comparable to FTX in smooth UX and exceeding it in censorship resistance, privacy, and access. External teams are crucial to this vision. On this front, Sunny mentioned potentially merging Isotonic with another protocol that might decide to build on Osmosis. No details yet, but this would be amazing. It would free the core developers up to work on DEX infrastructure, interfluid staking, threshold encryption and the like.
For months, we have been building out the tooling for the Osmosis ecosystem with permissioned CosmWasm. We are (as previously mentioned) bringing a Hardhat/Foundry-like smart contract development environment to Osmosis, developed by Boss, who created a similar environment for Terra.
We have also developed and open-sourced JavaScript tooling for front-end development with Osmosis and the rest of the Cosmos.
The immediate goal for Osmosis in the wake of the Terra crash is to provide a soft landing for select teams, integrate them into the Osmosis ecosystem, and foster (if they want) their development into a sovereign app-chain.
It is fitting that the first of these external CosmWasm teams be the team building the Osmosis-native ION DAO, ManyThings (affiliated with Alphaworks). The proposal to launch these contracts is on Commonwealth, and likely to go to a vote soon. The initial contracts will allow ION to be staked for voting power over the future of ION and to govern the ION treasury of 16572 IONs clawed back from never-active accounts as per Osmois Prop 120.
Composable Finance
Our guest today was 0xbrainjar from Composable Finance. As the name suggests, Composable is working on interoperability, specifically the ability to allow transactions to be viewable and usable across blockchain ecosystems. One its first big projects aimed at enabling this is bringing IBC to Polkadot/Kusama with the Centauri Bridge. They say more about connecting Picasso (Composable’s Kusama parachain) with Osmosis in this post:
To support Substrate-based chains on the Cosmos side, we will need a BEEFY-IBC client merged into IBC-go; therefore, the first step in our process is to create a BEEFY-go followed by a BEEFY-IBC. Once this is set, we will work on updating the relayer before launching the product.
Our plan is to use Osmosis, Cosmos’ AMM, and Picasso to run our proof of concept (PoC) before moving onto a larger-scale launch. Ultimately, this BEEFY will set the stage for a Dotsama-IBC Substrate bridge allowing for seamless cross-chain communication and asset transfers between the Cosmos and Composable ecosystems.
To help foster and align this relationship, the Pablo DEX (upcoming on Picasso) will be dropping a portion of its supply to OSMO stakers. 0xbrainjar expects the DEX to launch in the near future, while the bridge will take longer, since much works needs to be done.
In addition to the IBC link, Composable Finance is a huge proponent of CosmWasm in the DotSama ecosystem. 0xbrainjar says their devs find it to be far superior to Parity’s Rust-based smart-contracting platform, ink!, and he expects it to become the premier smart-contracting framework for Polkadot/Substrate.
Governance Corner
— Superfluid went live on JUNO/OSMO. Note: You may find it worthwhile to check your pools once in a while to see if they have superfluid enabled because several of mine were superfluid-eligible that I had not activated.
— Prop 232 to temporarily reduce voting times to two days failed. DAO members presumably want the deliberation time, and voting is not yet flexible enough to permit variable voting windows. In lieu of this, see the proposal on Commonwealth to include the emergency 2/3 quick-voting parameter as a permanent feature of Osmosis.
— Prop 233 to revise the semi-automatic incentives passed overwhelmingly. Many thanks to Unity Chaos and the rest of the Incentives Committee for 1) streamlining and further automating the incentives process, and 2) partially revamping how incentives are allocated by introducing category caps on the amount of incentives pools can receive. This is a huge step toward making our incentives forward-looking. We now have 45% of liquidity mining incentives going to OSMO/MAJORs, 30% going to OSMO/STABLEs, 20% going to OSMO/MINORs, and 0% (for the time being) to STABLE/MAJORs and STABLE/STABLEs. The current MAJORs are ATOM, wETH, wBTC, and CRO, chosen for the market-cap relative to OSMO. STABLEs are USDC, DAI, and EEUR. To fully articulate the scope of the changes requires a full blog post, so I will stop here for now, but I expect them to be quite beneficial going forward. You can see and vote on the first semi-automatic/regular implementation of the new system in Prop 238.
— In keeping with being smarter about incentives, Prop 236 to match external incentives on AKT/OSMO is easily passing, and Prop 237 to incentivize OSMO/GLX is easily failing, though there are still too many abstentions….
— Finally, there are two superfluid votes: Prop 234 to remove superfluid from OSMO/UST (#560) and OSMO/LUNA (#561) and Prop 235 to enable it on on OSMO/DAI (#674), OSMO/USDC (#678) and OSMO/ETH (#704.)
That’s it for this week. To close, I’d like to echo Kevin and Sunny in praising our social media admins. They tirelessly relayed information, calmed emotions, and guided users through the tough times last week. 🙏
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