Signal Proposal to Adopt the Liquidity Module onto the Cosmos Hub
Introduction
Two weeks ago Tendermint and B-Harvest submitted a forum discussion to get the $ATOM community sentiment for the upcoming proposal to add the Liquidity Module to the Cosmos Hub.
The aim for the Cosmos Hub Gravity DEX is to act as a marketplace for trading tokens from any connected network including tokens from Cosmos-SDK powered networks, Ethereum tokens including DeFi tokens and tokens from connected networks via IBC or Peg or others.
As we outlined in the proposal the module is a combined model of an order book and Automated Market Maker (AMM) with the following features:
- An AMM that uses an Equivalent Swap Price Model (ESPM). This guarantees a more protective swap price mechanism for liquidity providers to provide a better risk-return profile and prevent excessive value extraction from arbitrageurs
- A Batch Process where every order in the same batch is treated equally to minimize unnecessary latency/gas fee competition among traders and arbitrageurs, resulting in minimizing MEV (Miner Extractable Value)
We want to thank everyone who has contributed with their suggestions and comments to the final shape of this proposal and we are happy to announce that today, after careful consideration, we submitted the Signaling Proposal on chain https://www.mintscan.io/cosmos/proposals/38.
We look forward to Cosmos Hub’s community vote for this initiative but also for the next phases of this project. You can try out the Gravity DEX here.
So what have we been working on in the meantime?
Work in progress
Since we released the forum proposal for the signal proposal we have been working hard to get the module in a production-ready state. This includes:
- Adding additional features to the module, including Rosetta support
- Economic simulations — these are being written up now and will be published in the next two weeks
- Simulation testing
- Documentation
- A peer review that will begin this week.
We have also been speaking to a number of external auditors and look forward to working with them in auditing the code for this module. Stay tuned for more news on this as we plan to share the results with the community over the coming weeks.
What’s next?
Governance Proposal
We have been reviewing feedback and answering questions on the signal proposal and been very pleased with the positive feedback we have received. Based on this we proceeded on to the next step and submitted Governance Proposal #38 on the adoption of the Liquidity Module today.
Incentivized Testnet
In order to support and test the DEX’s features and code and to engage the community to participate in the testing of this module, we intend to submit a governance proposal to request funding from the Community Pool for an incentivized testnet very shortly.
The objective of this testnet is not only to test and verify the robustness of the implemented Liquidity Module but to provide an exciting opportunity to learn and get experience from actual usage of the utility. To this end the testnet will have two pools (and sub-pools):
- A trading competition where competitors will use the pools to trade tokens
- A pool to reward the identification and documentation of vulnerabilities in the module
The request will be for an amount of 5,000 Atoms from the Community Fund that will then be divided into pots for each of the testnet’s bounty components.
Planning for the testnet is still in progress and we will announce details in the next weeks, but we are very excited about this phase of the journey and look forward to the community to join us!
Chain upgrade
Subject to the results of the incentivized testnet and audit feedback we look forward to submitting a governance proposal for the chain upgrade of the Cosmos Hub to adopt the Liquidity Module.
Roadmap
To summarise what the proposed roadmap for next months entails and what the Cosmos community should expect, here’s a short recap of what is in store and how the future of the Gravity DEX looks like:
1st March:
- A governance proposal was submitted for the adoption of the Liquidity Module on the Cosmos Hub
Mid-March:
- A community fund governance proposal submitted for trading competition prize fund request
- The economic testing paper released
Early-Mid April:
The incentivized testnet with the trading competition is launched
Mid-End April:
Completion of external audit
Post testnet review:
A governance proposal submitted for chain upgrade of Cosmos Hub, including the Liquidity Module
These are exciting times for DeFi on the Cosmos Network and we look forward to moving onto the next stages!
If you want to stay up to date with the progress of the Gravity DEX, make sure you follow
Try out the Gravity DEX
BHarvest is running a testnet and a frontend for the Gravity DEX. Give it a try!
