Cosmos chain Osmosis to hook up with Umee’s borrow/lend protocol

Brent Xu, CEO of Umee, notes that more strategic alignments within the Cosmos ecosystem should be expected in the future

article-image

Maurice Norbert / Shutterstock, modified by Blockworks

share

Osmosis, the largest decentralized exchange by trading volume in the Cosmos ecosystem, will merge with Umee’s cross-chain lending UX Chain.

As part of this merger, the UX Chain will transition its code so that it will be compatible with the Osmosis Blockchain and cater to existing liquidity, TVL, and functionality. 

This move will enable Osmosis to inherit Umee’s lending features, including spot margin trading, shorting, liquidations, stablecoin pools, interchain flash loans and MEV markets. 

Osmosis currently has a TVL of $140 million and a seven-day trading volume of $103 million. Following this merger, its TVL will be combined with TVL on the UX chain, which currently is estimated to be around $17.4 million, according to DeFiLama. 

Brent Xu, CEO of Umee, told Blockworks that this initial merger would focus on the weaving of the two different product code bases. Later, a ‘call to action’ proposal will be posted, asking community members to determine the next steps in tokenomics management. 

The UX Chain’s UX token could be used to apply mesh security, shared security mechanics involving plasma, or new tokenomic designs developed in the interim, Xu noted. 

“In crypto communities, builders should take a product-first mindset and eventually use that as a platform to improve the tokenomics,” Xu told Blockworks. “This is similar to mergers in tradfi where first the deal is announced to the public, and subsequently, the process begins where company governance must decide on all details and specifics of the deal toward final execution and closing.”

Mergers in Cosmos

The Osmosis and Umee merger is not the only unification talk revealed in the Cosmos ecosystem over the past few months. 

Earlier at Cosmoverse in Istanbul, liquid staking zone Stride Labs floated the idea of becoming part of the Cosmos Hub, a blockchain responsible for connecting thousands of networks within the Cosmos ecosystem.  

This proposal ultimately fell through as ecosystem participants were unsure of the role the Cosmos Hub would play in the merger. Participants also noted that ATOM, the native token of the Cosmos Hub, should remain neutral and not play favorites.  

It is important to note, however, that the merger between Osmosis and UX is different from the Stride and Cosmos Hub merger proposal. 

This particular merger can be seen as more strategic — as both blockchains share similar objectives to improve trading experiences for their users. Xu notes that there are likely going to be more such alignments within the Cosmos ecosystem in the future. 

“It’s a difficult environment for one team to ship everything, so protocols are better to find synergies than to build in silos,” he said. “This is the ethos of open-source technology. Two chains can merge their technologies to unlock the most powerful applications for the benefit of users, leveraging the benefits of composability.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit

article-image

The Boston Globe reports that lawyer John Deaton is weighing a possible bid

article-image

Ethereum’s Dencun upgrade will enable Uniswap v4 to optimize smart contracts for complex functionality