Become a DeFi Scientist with OsmosisLab!

tl;drOsmosis is an AMM protocol and a DEX built using the Cosmos SDK. Liquidity providers are the governors of Osmosis, since the largest allocation of OSMO tokens is set aside for LPs to reward liquidity providers given an ownership stake in the future of the protocol. Osmosis provides superfluid staking and instant block confirmation. OSMO token has a circulating supply of 233 million and a max supply of 1 billion. With a market cap of $1.25 billion, OSMO ranks #113 in market cap rankings. In 5 months, OSMO's popularity grew by 231% on Twitter and 99% on Telegram.
Become a DeFi Scientist with OsmosisLab!
Become a DeFi Scientist with OsmosisLab!
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What Osmosis is All About

Osmosis is an automated market maker (AMM) protocol, and a decentralized exchange (DEX) built using the Cosmos SDK. It was initially made for liquidity providers; LPs are the target audience and the governors of Osmosis since the largest allocation of OSMO tokens are set aside for LPs to reward liquidity providers given an ownership stake in the future of the protocol. Osmosis also allows developers to build AMMs for liquidity providers. The DEX uses a native token, OSMO, for governance and staking.

Cosmos: The Internet of Blockchains

Cosmos Network works as a collection of blockchains; Instead of using many bridges to connect each one of these blockchains to another, the Cosmos Network uses "hubs". These hubs are Cosmos-based blockchains that act as a single point, and thousands of blockchains can connect to them for interoperability with other connected chains. You can check our Cosmos article for more details. Cosmos launched the Inter-Blockchain Communication (IBC) Protocol, enabling Cosmos-based blockchains to interact and communicate. What Osmosis does is that it utilizes IBC to enable cross-chain swaps.

Key Features of Osmosis

Osmosis aims to provide superfluid staking and instant block confirmation

  • Superfluid staking allows liquidity providers to stake their LP tokens to earn rewards in OSMO tokens. Token holders can compound staking and liquidity yields and keep the network secure at the same time. 
  • Instant block confirmation creates Miner-Extractable-Value (MEV) resistance. It keeps traders from cherry-picking on the network. 

What is a DEX?

Dex stands for decentralized exchange, and it allows users to trade their coins and tokens in a decentralized manner. These work without a central authority and are run with smart contracts instead. However, DEXs can only exchange cryptocurrency for cryptocurrency and not fiat currencies. Also, the two cryptocurrencies must be on the same blockchain. 

A significant benefit of DEXs is that they do not require KYC (Know Your Customer), and you do not have to submit your identity information to use the system. Another benefit is that they are run by codes, meaning there are no human errors since codes are trustless and were initially designed to 'remove human errors'. These codes are open-source, meaning you can look at them and check how reliable they are.

Yield Farming

Osmosis is widely used for yield farmings. Yield farming is an investment strategy where investors put their cryptocurrencies in the most optimized spot to earn interest and more crypto from it. Yield is a financial term, meaning what you give for investing. There are many ways of yield farming; by becoming a liquidity provider, lending or even borrowing money, staking, etc. A deep dive into yield farming strategies is out of the scope of this post, so stay tuned!

Other Projects Similar to Osmosis 

Let's look at similar projects in the 'DEX' category so you can easily compare them. 

  • SushiSwap: SUSHI's market cap is $900 million, ranks #112, and has more than $6 billion total value locked.
  • UniSwap: UNI's market cap is $13 billion, ranks #18, and has more than $10 billion total value locked.
  • PancakeSwap: CAKE's market cap is $3 billion, ranks #52, and has more than $6 billion total value locked.

OSMO Tokenomics

OSMO has a circulating supply of 233 million and a max supply of 1 billion. However, its total supply is 325 million. Total supply is the number of tokens that have been created, minus any coins that have been burned or removed from the circulation. OSMO hit its all-time high on Sep 20, 2021, at $7.6. Its current price is in the range of $5.5.

Market Cap & Popularity

OSMO's ROI for this year has been 276%, meaning if you had invested $100 a year ago, you would have $276 by now. However, the ROI of similar projects during the same timespan has been 30,990%. OSMO has a market cap of $1.25 billion and ranks #113 in market cap rankings. In 5 months, OSMO's popularity grew by 231% on Twitter and 99% on Telegram. You can purchase OSMO from Osmosis DEX.

Can OSMO be a Good Investment?

This project is very ideal for yield farmers, and targeting liquidity providers it can be a beneficial investment. However, no one can decide on investments better than yourself. We are not financial advisors, and what we're providing on Cryptologi.st is for educational purposes only. We gather everything you need to compare your options and make investment decisions all in one place.

To quickly compare available options and make the best investment decision, check out our website.

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