The Osmosis revamp: New tokenomics and supercharged liquidity

Osmosis’ v16 upgrade will bring more incentives to stakers

article-image

Praveen Nanu/Shutterstock modified by Blockworks

share

Automated market maker and decentralized cryptocurrency exchange Osmosis is preparing for its v16 Magnesium upgrade, set to bring about supercharged liquidity pools

Supercharged liquidity is Osmosis’ take on concentrated liquidity, designed to equate to users specifying pool positions — and granting flexibility over the use of assets in the process. 

“It allows for users to set positions in spot pricing intervals rather than percentages, this means you can set positions to $1.21.1 to $1.21.2,” contributor to Osmosis who goes by Emperor Osmo told Blockworks.

Liquidity providers will also have the ability to secure positions across an entire price range, Osmo said.

“The new model will allow for continued participation in Superfluid Staking pools without any interruptions,” he said. “This means that LPs can benefit from swap fees while also earning staking rewards using their OSMO tokens.”

The first supercharged liquidity pool set to be introduced alongside the v16 upgrade will be the DAI/OSMO pool.

The upgrade will occur on July 13 at around 12 pm ET — if the proposal passes — and is supposed to take approximately 30 minutes, with the network shut down over that half hour span. 

Introducing supercharged liquidity pools have also enabled the protocol to revamp the tokenomics of its native token, OSMO. 

Osmo 2.0 is designed to reduce inflation and realign emissions to favor stakers over liquidity providers. 

“The updated Tokenomics model serves to upgrade Osmosis from being an incentives-driven DEX to a volume-focused DEX,” Emperor Osmo said. “The reduced emissions, combined with the increased capital efficiencies, focus on volume and not liquidity depth. This is key, as the high emissions needed to curtail the liquidity to accommodate for large trades is no longer needed thanks to Supercharged Liquidity.”

Check out our Blockworks Research report on Osmosis here.

Additional proposals are in the works. That push includes a proposal aiming to provide stakers with a share in swap fees earned through Osmosis liquidity pools. 

Although the protocol taker fee will accrue value for Osmo holders, an Osmosis community member that goes by Seppmos said “it should not come at the expense of traders and worsening of the UX.”

“Traders will eventually move to places where they face lowest swap fees and best price execution,” they said. “Should traders have to pay up to 0.45% on a swap on Osmosis, it won’t take much time and folks will migrate to alternative DEXes.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (11).png

Research

Union’s technical design brings measured improvements to crosschain interoperability. By combining a consensus-verified hub with novel constructs like state lenses and ZK proofs for client updates, Union achieves an interoperability protocol that is highly performant, trust-minimized, and scalable.

article-image

“Diverse opportunities emerge alongside macroeconomic tailwinds,” zondacrypto CEO says

article-image

Commerce plans transparent, tamper‑resistant data distribution via blockchain for economic metrics

by Blockworks /
article-image

It’s unclear whether the celeb ever knew about the account made using his name

article-image

Sharps Technology raised $400 million in PIPE offering

article-image

Offchain Labs’ Tandem will work exclusively with Succinct on a zkVM

article-image

Fundstrat’s chief investment officer may be the apex bull