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:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

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

tg trading bot report graphic.png

Research

Telegram trading bots have found their primary niche in highly speculative token launches and retail-dominated memecoin markets, with many features specifically tailored to token sniping and copy-trading strategies.

article-image

Ethereum is hoping that increased DA will grow user demand — and its profits through DA fees

article-image

11 years ago, Bitcoin contributors prevented a supply crisis… two centuries from now

article-image

Both samczsun and ZachXBT have issued warnings after the Bybit hack last month

article-image

The investor criticized Michael Saylor’s plan to render his personal bitcoin holdings inaccessible to anyone else forever

article-image

The exchange has structural defenses and protocols to limit manipulations

article-image

Upshift is being spun out of August, which raised $10 million earlier this month