Osmosis v9.0.0 — Nitrogen Upgrade
The Osmosis v9 upgrade is scheduled to go live on June 07 at block height 4707300, currently estimated to occur at approximately 16:00 UTC (though block time variance may cause the upgrade to begin up to a couple hours before or after this time). This upgrade is full of exciting changes! We’ll go through the major changes in this article, but please make sure to take a look at the pending governance proposal for a full list of new features.
Service Announcement: Please note that this upgrade is expected to take approximately 30 minutes. During this time, the Osmosis chain will be down, and users will be unable to interact with the DEX. IBC transfers to/from Osmosis and staking will also be inaccessible during this time.
Token Factory
Osmosis v9 will bring the long-awaited token factory module to the mainnet chain. This module will allow projects building on Osmosis using Cosmwasm to mint their own tokens as native Cosmos SDK tokens instead of as CW-20 assets.
Deployment of Cosmwasm assets as native SDK tokens gives builders an advantage over CW-20 assets by reducing security vulnerabilities inherent in contract tokens, as well as by making them more easily interoperable with the Osmosis AMM. In the short term, native SDK assets are more easily compatible with IBC, further reducing the difficulty Cosmwasm developers will experience building on Osmosis.
The timing of this feature could not be better. In the wake of Terra’s collapse, many Cosmwasm d’apps are now looking for a new home. Some of these applications have already joined the rapidly growing Osmosis Ecosystem, and many more have expressed an interest in doing so. The token factory module will allow these projects to mint their tokens and deploy them throughout the IBC ecosystem more efficiently and securely. Token factory will thus allow for Osmosis to facilitate an attractive environment for Cosmwasm developers to build their apps.
Governance Upgrades
Governance changes have been a key topic of discussion in the Osmosis community since genesis. There’s much left to be done in this area, but the v9 upgrade ships two important changes to the Osmosis governance module that should improve on-chain governance and increase protocol decentralization.
Variable Voting Periods: At 5 days, Osmosis currently has a shorter voting period than most other Cosmos SDK chains. This lower voting period was implemented primarily to allow for rapid deployment of incentives allocations to new pools, and to allow for new features to ship quickly. Lately, however, there has been a push to extend the voting period to give the community more time to discuss community pool spend proposals, as well as any controversial proposals.
With variable voting periods, the Osmosis community can now set different voting periods depending on the proposal type. These voting periods are set by on-chain governance. For example, we may want to allow changes to incentive allocations to occur relatively quickly in order to adjust to changing market conditions, or to incentivize a high-value asset before a competing DeFi protocol. As such, the community might choose to implement a 3-day voting period for incentive adjustment proposals.
On the other hand, the community may want more time to discuss community spend proposals, which can sometimes be large and controversial. In furtherance of that goal, the community might vote to increase the voting period for community spend proposals to 7 days. This added flexibility will allow the community to quickly ship governance initiatives that are targeted at further growth of the protocol without potentially compromising security with a shorter voting period for certain proposal types.
Superfluid Delegator Voting: Osmosis v7.0.0 launched the superfluid staking module, which allowed for OSMO bonded into certain liquidity pools to be staked to secure the network. Any bonded OSMO subject to superfluid staking (over 28 million OSMO at the time of writing) have governance power just like any other staked OSMO.
Until now, that voting power belonged entirely to the superfluid validator, and superfluid delegators could not override their validator’s vote on a governance proposal. With Osmosis v9, superfluid staked OSMO can now be used to vote by the individual delegator, which will help to further decentralize on-chain governance.
Voting your superfluid staked OSMO will work the same as voting your regularly staked OSMO, and you can vote with superfluid OSMO even if you don’t have any OSMO staked in the standard way. Keplr users, to vote on a governance proposal, visit https://wallet.keplr.app/#/osmosis/governance. When you vote, your superfluid staked OSMO balance will automatically be counted towards your voting power.
Note: At launch, there will be no way to view your voting power provided by superfluid staking on Keplr or block explorers such as mintscan. For example, if you have 1000 OSMO in superfluid staking and 0 OSMO on Keplr, it will look as though you are voting with 0 tokens, though your voting power will really be 1000 OSMO. We hope to see front-end support for this voting power on Keplr and block explorers as soon as possible.
IBC v3 and Interchain Accounts
Though the effects of this feature will not be felt for quite some time, it is arguably the most important part of this upgrade. With the v9 upgrade, the Osmosis blockchain will integrate v3 of the IBC protocol, which includes the interchain accounts hosting module. Interchain accounts are the latest revolution in IBC technology. At a high-level, interchain accounts allow you to initiate a transaction on Blockchain A, and have that transaction execute a command on blockchain B using IBC. Below is a graphic that explains how this works in detail:
As a simple example, let’s say that you just swapped your OSMO tokens for ATOM on Osmosis, and would like to stake your newly-acquired ATOM on the native Cosmos Hub. Currently, you have to initiate an IBC transfer from Osmosis to the Cosmos Hub and, when your ATOM arrives, initiate a second transaction to stake your tokens with a validator on the Hub.
With interchain accounts, these two transactions can be condensed to a single command. Imagine a “withdraw and stake” button on the Osmosis UI that will allow you to do this without ever leaving the Osmosis website. Interchain accounts make this possible. (NB: this example is just used for educational purposes, and may not reflect actual features coming to Osmosis in the near future).
That example, however, only scratches the surface of what’s possible with interchain accounts. As more chains enable this feature, we can expect to see a myriad of creative applications leveraging this breakthrough to further facilitate a seamless interaction between the application-specific blockchains in the Cosmos ecosystem. For example, using interchain accounts it may one day be possible to use an NFT in your stargaze wallet as collateral for a loan on a decentralized lending protocol on Osmosis, all without leaving the Osmosis front-end. Interchain accounts will massively improve user experience on Osmosis, and further our goal to create a decentralized protocol that’s as easy to use as a centralized exchange.
A Quick Note on Stableswaps
The development team has been working on a new, more efficient AMM curve for stableswaps. This was originally meant to go live in this upgrade, however, due to the need to act quickly to provide the token factory module and other tooling for Cosmwasm developers, the stableswap curve has been postponed to v10. We expect that this upgrade will ship fairly quickly, and will bring with it a host of new stableswap pools to facilitate efficient stableswaps and lucrative stable liquidity mining.
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