Macauley Peterson

As 2023 draws to a close, Istanbul has positioned itself as the go-to hub for crypto conferences. The city is set to host several major crypto events this November, including Binance Blockchain Week (which is actually only 2 days long) and the Ethereum-centric DevConnect. But if the number two and three crypto assets by market cap (excluding stablecoins) were considered the main course, the appetizer would be Cosmoverse.



Now in its third year, the Cosmos community-driven event was bustling with scores of ecosystem teams in evidence looking to capture mindshare. There was little sign of a bear market, as the conference mood was decidedly upbeat. Attendance was up year-over-year, with estimates coming in at over 2,000.



As a city whose Bosphorus bridge joins Europe and Asian continents, Istanbul is geographically well-placed to attract attendees from both the East and West.


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=1024&amp;h=1024" alt="" class="wp-image-70126" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/istanbul-roof-top-restaurant.jpg?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">View westward from the rooftop restaurant; Source: Blockworks</figcaption></figure></div>


The Swisshotel Bosphorus managed to feel both spacious and compact, with most of the action split across three floors, with some areas featuring spectacular views of Istanbul’s harbor. It was easy to duck in and out of the main stage, which showcased a stacked program of keynotes and panels from 9 or 10 am GMT until early evening.



The adjacent lounges, where coffee and snacks were always on offer, segued into a handful of special purpose conference rooms. These hosted media and side events, such as one presenting what <a href="https://blockworks.co/news/cosmos-developer-to-offer-a-stablecoin-built-for-the-interchain">Agoric</a> called <a href="https://agoric.com/blog/announcements/appjam-an-immersive-agoric-experience-at-cosmoverse-23">AppJam</a>, and another streaming in guests for talks that could not be held in person.



Upstairs, the exhibition hall of booths provided a mini headquarters for conference participants to schmooze with peers and users alike&#8230;and have some fun.


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1280" height="960" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=1024&amp;h=1024" alt="" class="wp-image-70127" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=1280 1280w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=343 343w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=292 292w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/Cosmoverse-ballpit.jpg?w=80 80w" sizes="(max-width: 1280px) 100vw, 1280px" /><figcaption class="wp-element-caption">The ball pit; Source: Yap Global</figcaption></figure></div>


<h2 class="wp-block-heading">Merger intrigue</h2>



On the sidelines of the conference, stakeholders of the Cosmos Hub and other key pieces of infrastructure are discussing the prospects for governance proposals to unify parts of the ecosystem.



The first to be formalized into a public proposal is from the Stride Labs team, whose <a href="https://blockworks.co/news/stride-merge-cosmos-hub-network">pitch to integrate completely into the Hub</a>, rather than <a href="https://blockworks.co/news/cosmos-liquid-staking-token-pioneer-gets-a-100x-security-boost">remain a consumer chain</a>, was presented Wednesday. The public discussions follow weeks of internal deliberations and preliminary negotiations in Istanbul on Tuesday, Stride Labs co-founder Aidan Salzmann told Blockworks.


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="2048" height="1536" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=1024&amp;h=1024" alt="" class="wp-image-70128" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=343 343w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=292 292w, https://blockworks-co.imgix.net/wp-content/uploads/2023/10/cosmoverse-panel.jpg?w=80 80w" sizes="(max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Panelists from Stride Labs, Informal Systems and Sommelier closed out the conference; Source: Yap Global</figcaption></figure></div>


The idea now moves to <a href="https://forum.cosmos.network/t/convert-entire-strd-supply-to-atom/11650/5">community forums</a> for further <a href="https://commonwealth.im/stride/discussion/13607-convert-entire-strd-supply-to-atom">discussion</a> and refinement. Some early reactions are skeptical — as STRD holders worry that an exchange for ATOM will undervalue the independent liquid staking protocol.



<h2 class="wp-block-heading">Bringing Bitcoin to Cosmos</h2>



Several developer teams debuted products that were either newly launched or coming soon. This contributed to a general feeling that Cosmos may be on the cusp of providing something novel enough to pull in fresh capital and users.



For instance, bitcoin holders will soon have a new decentralized option to deploy capital in Cosmos and earn staking yield.&nbsp;



Nomic, with its nBTC slated for activation on Oct. 30, has a leg up on wrapped bitcoin (WBTC) which uses a centralized custodian, plus a bridge to reach Cosmos. Instead, bitcoin holders will be able to deposit into Nomic directly and use the IBC-compatible nBTC anywhere in the Cosmos ecosystem.



Nomic makes use of Bitcoin’s 2021 <a href="https://blockworks.co/news/anticipating-bitcoins-taproot-upgrade-heres-what-you-need-to-know">Taproot upgrade</a> to deliver features that Matt Bell, CEO of software development company Turbofish, thinks will allay the fears of Bitcoiners.



“One of the big tight integrations with Bitcoin that adds security here is our emergency dispersal mechanism,” Bell told Blockworks. “Like if something went wrong, even if the Nomic network disappeared, the default is the funds go back to the nBTC holders on the Bitcoin blockchain.”



Nomic requires only 10% of its validator set to be honest to ensure the safety of the bridge, according to Bell.



Cosmos DEX <a href="https://blockworks.co/tag/osmosis">Osmosis</a> demonstrated how users will be able to deposit and withdraw Bitcoin directly within the Osmosis dapp.



Bell is optimistic that a meaningful percentage of bitcoin holders will find Nomic appealing.



“Clearly, there are Bitcoin holders who want to take some amount of risk and earn on their Bitcoin,” he said.



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Istanbul at center of Cosmos for three days

Bessie Liu

Automated market maker and decentralized cryptocurrency exchange Osmosis is preparing for its v16 Magnesium upgrade, set to bring about <a href="https://blockworks.co/news/supercharged-liquidity-pools-osmosis">supercharged liquidity pools</a>.&nbsp;



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.&nbsp;



“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 <a href="https://twitter.com/Flowslikeosmo?">Emperor Osmo</a> 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 <a href="https://www.mintscan.io/osmosis/blocks/10517000">upgrade</a> will occur on July 13 at around 12 pm ET — if the <a href="https://www.mintscan.io/osmosis/proposals/556">proposal</a> passes — and is supposed to take approximately 30 minutes, with the network shut down over that half hour span.&nbsp;



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



<a href="https://osmosis.zone/blog/unveiling-osmo-2-0">Osmo 2.0</a> is designed to reduce inflation and realign emissions to favor stakers over liquidity providers.&nbsp;



“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 <a href="https://app.blockworksresearch.com/research/osmosis-q2-update" target="_blank" rel="noreferrer noopener">here</a>.



Additional proposals are in the works. That push includes a <a href="https://commonwealth.im/osmosis/discussion/11694-taker-fee-implementation">proposal</a> aiming to provide stakers with a share in swap fees earned through Osmosis liquidity pools.&nbsp;



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&#8217;t take much time and folks will migrate to alternative DEXes.”



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The Osmosis revamp: New tokenomics and supercharged liquidity

Darren Kleine

Recently returning from the Delphi Cosmos Hackathon, Sunny Aggarwal is impressed with the range of innovative developments in the Osmosis ecosystem he witnessed at the event.



The <a href="https://blockworks.co/news/osmosis-co-founder-doesnt-see-cosmos-and-polkadot-as-competitors">co-founder of Osmosis</a>, a cross-chain automated market maker on <a href="https://blockworks.co/tag/cosmos">Cosmos</a>, says he is “really happy with the results” and that there’s “a lot of cool stuff being built right now.”



Speaking to Blockworks on the 0xResearch podcast (<a href="https://open.spotify.com/episode/5mFAueKiVdaxVp7a7RIInh?si=9057368633984726">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/how-osmosis-could-become-cosmos-defi-hub-sunny-aggarwal/id1651683074?i=1000619392647">Apple</a>), Aggarwal says one particular application caught his eye.



Although it was difficult to choose only one project demonstrated at the event, Aggarwal says his favorite, dubbed Night Market, showed the most interesting potential.



Among the <a href="https://twitter.com/osmosiszone/status/1669404441248956416?s=20">winners</a> of the hackathon, Night Market is a “private trading pool,” Aggarwal explains, using “<a href="https://blockworks.co/news/crypto-blockchain-privacy-unimportant">ZCash-style</a>” shielding for depositing assets. The app enables users “to engage with protocols through swaps, staking, and [liquidity providers] while safeguarding their identity,” according to an Osmosis tweet.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">5/ 🥈 <a href="https://twitter.com/Aegis_finance?ref_src=twsrc%5Etfw">@Aegis_finance</a> (Night Market) &#8211; Night Market is bringing privacy to Osmosis through the use of a secure platform for holding multiple assets privately. Enabling users to engage with protocols through swaps, staking, and LPs while safeguarding their identity. <a href="https://t.co/c7pCLIrVOL">pic.twitter.com/c7pCLIrVOL</a>&mdash; Osmosis 🧪 (@osmosiszone) <a href="https://twitter.com/osmosiszone/status/1669404515689435137?ref_src=twsrc%5Etfw">June 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Users can trade from a shielded pool, so “no one will be able to see who&#8217;s trading what,” he explains.&nbsp;



“On centralized exchanges today, you can&#8217;t see who&#8217;s making which trade” but in <a href="https://blockworks.co/tag/defi">DeFi</a>, “everyone&#8217;s just leaking all of that information and leaking their trading strategies.”



Private trading, Aggarwal says, will be a “game-changer for DeFi.” Without privacy protections, more advanced traders can take advantage of leaked information to extract value at the expense of others.



<a href="https://app.blockworksresearch.com/">Blockworks Research</a> analyst <a href="https://twitter.com/smyyguy">Dan Smith</a> says he’s hesitant to buy into fully private decentralized exchange (DEX) tech “because I love seeing which addresses are active, what they&#8217;re doing and how funds are flowing through DEXs.”



Aggarwal explains that while individual user trading behavior will be obscured, it is still possible to observe the sum of pool trades and to follow order books. 



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG5765369295" width="100%"></iframe>







“People want a visible order book. That&#8217;s the point of having an order book,” he says. “You want all of that to be publicly visible.”



“What we&#8217;re really trying to hide is who is making what trade,” he says. “We&#8217;re trying to get the privacy level to basically match what&#8217;s on a centralized exchange.”



The next big challenge, Aggarwal says, is enabling more advanced mechanisms like margin and perpetual trading in a private and decentralized setting. “<a href="https://blockworks.co/news/advantages-single-contract-dex-architecture">It gets more complicated</a> when you have to start thinking about liquidations.”



Keeping things simple for now, private spot trading is “definitely something we&#8217;ll see live by end of year,” he says.



Adventurous dabblers can try Night Market on the testnet right now, Aggarwal adds. “But hopefully, we&#8217;ll have it more productionized and integrated into the Osmosis experience.”



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Osmosis co-founder’s new favorite DeFi app: Private DEX pool Night Market

The largest decentralized cryptocurrency exchange (DEX) on the Cosmos interchain will soon have its very own version of the Curve 3pool.&nbsp;



Osmosis will be starting up pools to facilitate stablecoin trades pending the addition of Binance USD (BUSD) support on cross-chain messaging service Axelar, Sunny Aggarwal, the founder of Osmosis, told Blockworks.



“We want to create our own version of the Curve 3pool, which includes USDC, Tether, and BUSD,” Aggarwal said.&nbsp;



Osmosis chose to include BUSD as its third stablecoin in its 3pool because it is the <a href="https://www.coingecko.com/en/categories/stablecoins" target="_blank" rel="noreferrer noopener">third-largest</a> stablecoin by market capitalization and second-biggest by trading volume.



Aggarwal said <a href="https://blockworks.co/tag/busd" target="_blank" rel="noreferrer noopener">BUSD</a> is “pretty trustworthy [because] it&#8217;s just Paxos under the hood.”



The DEX revealed last week that it had launched a StableSwap — a protocol for trading stablecoins — in hopes that Osmosis will soon become the go-to space for users to access and trade a multitude of stable tokens in the Cosmos ecosystem.&nbsp;&nbsp;



<blockquote class="wp-block-quote">
“Instead of Osmosis having its own stablecoin and competing, we want to be this neutral DEX that allows for the ‘Curve wars of Cosmos’ to take place,” Aggarwal said.
</blockquote>



StableSwap is a new AMM [automated market maker] that can help execute lower slippage trading between similar assets — stablecoins is the logical first application, Aggarwal said.&nbsp;



The algorithm used to code the system is a derivative of Solidly — an AMM that incentivizes fee-generation and enables low cost.&nbsp;



Beyond trading stablecoins, Aggarwal believes that its latest StableSwap protocol has other use cases. 



“There’s a lot of demand for using it for its staking derivatives too,” he said.



Currently, on Ethereum, the largest DEXes — Curve and Uniswap — are separate products, which Aggarwal believes to be a missed opportunity.&nbsp;



Osmosis is currently the largest DEX on the Cosmos ecosystem, its total value locked (TVL) currently sits around <a href="https://defillama.com/chain/Osmosis" target="_blank" rel="noreferrer noopener">$177 million</a>, according to DeFiLlama, and Aggarwal said that the purpose of launching a StableSwap is to capture the stable flow which already exists on the DEX.



The StableSwap piece is part of a larger Osmosis v13 upgrade, called Fluorine, which was passed by community governance last week.



Other upgrades which were made part of the upgrade include adding a governance-configurable rate limit, inter-blockchain communication protocol (IBC) transfers and introducing cross-chain CosmWasm contracts.



The governance-configurable rate limit will, <a href="https://wallet.keplr.app/chains/osmosis/proposals/370" target="_blank" rel="noreferrer noopener">according to the proposal</a>, allow Osmosis governance “to determine the amount of value which can flow in and out of the chain for a specific denom[ination], channel, and time period,” ensuring an increased level of security for assets on Osmosis. The CosmWasm contracts are intended to facilitate cross-chain swaps.



Aggarwal pointed to Cosmos’ multi-chain vision opening up new prospects for the DEX. “The other big thing would be being able to use it for fungible buying across different versions of the same asset — where we can bring the same asset by different bridges, but swap really easily between the different versions of the same asset.”



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Osmosis To Add Stablecoin Liquidity to Cosmos

<div id="highlights-block_62d8243a9823b" class="highlights">
 <ul>
 <li>Polkadot’s native token will be the first to move between the ecosystems</li>
 <li>“Our goal is to provide the best DEX possible for the entire crypto ecosystem and the interchain world that is coming into reality,” Sunny Aggarwal said</li>
 </ul>
 
</div>



Osmosis, a cross-chain automated market maker on Cosmos, has expanded its services to Polkadot and Ethereum-based tokens through integration with Axelar and Moonbeam.&nbsp;



Cross-chain swaps allow decentralized finance (DeFi) dApp developers to expand their reach between different blockchain ecosystems. 



Osmosis’ latest integration, which enables transactions via Inter-Blockchain Communication, will support one-click swaps between the different blockchains, starting with Polkadot’s native token DOT.



“Our goal for Osmosis is not just to be a Cosmos DEX, our goal is to provide the best DEX possible for the entire crypto ecosystem and the interchain world that is coming into reality,” Sunny Aggarwal, co-founder of Osmosis Labs, told Blockworks.



Aggarwal wanted to make sure that Osmosis had a single canonical bridge to connect different networks. This would give the team capability to execute more functionality in a timely manner.&nbsp;



A governance voting process that involved four other bridge providers was motioned. Blockchain interoperability startup Axelar was chosen as the primary cross-chain infrastructure.



“Axelar’s UX was very similar to what we were looking for and much more seamless than a lot of the others,” Aggarwal said, adding that Axelar had faster connectivity and a better security model.&nbsp;



Polkadot and Cosmos are often considered competitors, but Aggarwal hasn’t thought of the two projects in that way. Rather, they’re simply different frameworks for building dApp chains, he said.&nbsp;



Indeed, this latest collaboration between the two blockchains demonstrates a commitment to deeper integration.&nbsp;



“The point of building these interoperability protocols is not just to interoperate within tiny ecosystems,” Aggarwal said. “Polkadot is a big ecosystem that has a lot of interesting assets. Our plan is to be able to continue to connect every ecosystem possible.”



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Osmosis Co-founder Doesn’t See Cosmos and Polkadot as Competitors

Jack Kubinec

<div id="highlights-block_5af1046aad9e9854b869d8872e94239c" class="highlights">
 <ul>
 <li>“You should be scared of bridges. There’s a huge risk profile,” the head of DAOs at Alliance said</li>
 <li>DeFi bridges create trade-offs between simplicity, decentralization and cost</li>
 </ul>
 
</div>



Bridge protocols, designed to offer relatively seamless transfers between different blockchains, have been struggling to attract users as cryptocurrency markets continue to churn largely sideways.&nbsp;



Multichain, the largest such cross-chain bridge, has seen its total value locked (TVL) shrink to under $2 billion from $7 billion in March, according to crypto data firm DeFi Llama.



As competition for users intensifies, DeFi platforms are jockeying to become the preferred cross-chain protocol investors wary of bridges — which have wiped out <a href="https://cms.blockworks.co/cross-chain-bridge-thefts-top-1b-in-2022/" target="_blank" rel="noreferrer noopener">more than $1 billion in 2022</a>, largely via avoidable hacks.&nbsp;



Cross-chain bridging proliferated during the 2021 <a href="https://cms.blockworks.co/what-is-yield-farming-what-you-need-to-know/" target="_blank" rel="noreferrer noopener">yield-farming</a> bonanza. Will Robinson, the head of community at digital assets-focused investment manager Alliance, said consumers ought to do their research before using bridges.



“You should be scared of bridges,” Robinson told Blockworks. “There’s a huge risk profile. They’re still new, they break for unexpected reasons, and you don’t know what you’re getting into.”



<h3 class="wp-block-heading">Alternative bridging solutions</h3>



Osmosis recently partnered with the decentralized network Axelar on a “one-click” bridge that runs on Ethereum. The cross-chain protocol’s security lies in its decentralization, according to Sergey Gorbunov, co-founder of Axelar.



“Other bridges have permissioned nodes that participate in the system, but Axelar requires no trust for liveness or safety,” Gorbunov told Blockworks. “Even if people can’t operate their machines, Axelar still works on smart contracts.”



Permissioned bridging was largely to blame for the $625 million Ronin Bridge exploit, where multiple validators securing the Axie Infinity bridge were housed by the company. Axie has since increased and further decentralized its validators.



Axelar delegates most bridging legwork to the protocol, so all consumers see is assets moved from one chain to another — regardless of swaps on the back end.



With bridges receiving <a href="https://cms.blockworks.co/defi-exploits-top-1-8b-ytd-though-security-getting-better-immunefi-says/" target="_blank" rel="noreferrer noopener">lots of bad press</a> in 2022, some DeFi (decentralized finance) platforms are hoping to do away with the technology altogether.



The decentralized exchange (DEX) Hashflow went on a media blitz this year advertising its “bridgeless” cross-chain swap protocol. Rather than having smart contracts perform swaps, Hashflow moves assets by having dedicated market makers agree on prices.



“Mint-and-burn bridges can only generate representational assets escrowed by the underlying chain,” Varun Kumar, CEO of Hashflow, said in an email. Hashflow uses a “request-for-quote” model where market makers set prices and “off-chain components handle the gnarly parts where slippage and MEV would be introduced.”



Dominic Williams, founder of the protocol Internet Computer, believes bridging protocols like Axelar and Hashflow are not decentralized enough.&nbsp;



“If you have a centralized entity that’s taking funds, sooner or later things are gonna go wrong and you’ll get hacked,” Williams said to Blockworks. “Bridges require a trusted operator, so you get the same old problems.”&nbsp;



With wrapped tokens, “you’re basically asking the bridge to look after your money,” Williams said.



Wrapped assets are a common bridging practice where a protocol holds onto an investor’s original assets while providing an IOU to be swapped on different blockchains. Security breaches cause wrapped assets to lose their value. After the Wormhole hack, a <a href="https://cms.blockworks.co/wormhole-parent-commits-320m-ether-to-replace-massive-defi-hack-losses/" target="_blank" rel="noreferrer noopener">$320 million bailout</a> was needed to save Solana protocols that accepted wrapped ether as collateral.



Williams said his Internet Computer network will allow asset movement without bridges through an innovation called chain key cryptography — the splitting of validator keys into pieces to make a blockchain publicly accessible.&nbsp;



Internet Computer received over $100 million in funding from venture capital firms a16z and Polychain Capital in 2018 — before a 2021 market downturn stripped the project’s token of 95% of its value in just two weeks.&nbsp;



Internet Computer says its bridgeless protocol will soon integrate with Bitcoin, though the company has not provided a specific date.



Vitalik Buterin, co-founder of Ethereum, <a href="https://old.reddit.com/r/ethereum/comments/rwojtk/ama_we_are_the_efs_research_team_pt_7_07_january/hrngyk8/" target="_blank" rel="noreferrer noopener">warned</a> cross-chain bridges would have trouble keeping assets safe early this year. Security will likely remain an inherent risk investors take when moving assets between chains, but DeFi is a young industry, industry participants say.&nbsp;



In each of this year’s major bridge hacks, “protocols broke for way dumber reasons” than Buterin imagined, Robinson said. As DeFi matures, <a href="https://www.theblock.co/post/156038/how-a-fake-job-offer-took-down-the-worlds-most-popular-crypto-game" target="_blank" rel="noreferrer noopener">fake job offers</a> will be less viable means for exploiting consumer wallets.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Bridge Protocols Race To Win Consumer Trust

<div id="highlights-block_62c6d17f403f5" class="highlights">
 <ul>
 <li>Price oracles are vital for borrowing and lending applications across DeFi</li>
 <li>Cosmos has a broad range of development activity, but this basic piece of infrastructure is currently lacking</li>
 </ul>
 
</div>



Umee, a Cosmos-based borrowing and lending platform, is weeks away from launching the first price oracle service for Cosmos’ inter-blockchain communication (IBC) protocol, the company announced Thursday. The oracle, called Orion, will be provided by Umee blockchain’s validators which run software that will automatically pull pricing data from a set of centralized exchanges, plus decentralized exchange <a href="https://cms.blockworks.co/tag/osmosis/">Osmosis</a>.



For any smart contract to make use of data not running on its own blockchain, it needs to rely on a third-party service — an oracle. Typically used to query price data, the oracle acts as an intermediary between the smart contract and off-chain sources — in the case of Umee’s Orion, initially about a half dozen exchanges such as Coinbase and Binance.



“Cosmos has a lot of DeFi, but there’s not a single oracle that works for IBC tokens,” Umee CEO Brent Xu told Blockworks.



Neither Chainlink — the largest oracle network on Ethereum — nor Band Protocol which, although based on the Cosmos SDK, is focusing on cross-chain use cases, has implemented a price oracle for Cosmos native assets.



Projects that need accurate prices have been finding workarounds, but they aren’t as reliable or trustworthy as a decentralized oracle network, where many participants checking multiple data sources need to reach consensus and are economically penalized if they screw up — a mechanism known as slashing.



A rock-solid price feed is essential for borrowing and lending applications, like the one Umee is preparing to launch, and its platform will be the new oracle’s first “customer.” But the service will be available to others. Shade Protocol — expected to launch later this year — which specialized in privacy-preserving DeFi (decentralized finance) applications built on another Cosmos-based chain, Secret Network, is one likely Orion user, Xu said.



IBC allows chains built on Cosmos to relay information about their own accounts and transactions, collectively known as “state.” But it can also be used to create transactions that modify the state of other Cosmos chains.



Xu explained: “What’s special about our oracle is that every time we take price information, it’s the equivalent of an IBC transaction happening [on] the chain, and what we can do is we can allow these IBC transactions to transact information from the Umee blockchain to any other Cosmos blockchain out there as pricing data.”



Umee’s full validator set will pass the price data along about every 30 seconds. Each validator submits the price independently to prevent collusion and guarantee accuracy, Xu said.



The oracle will go live next month, alongside a major upgrade to the Umee protocol, but has been rigorously tested on a test network already.



“We just pushed the oracle to its limits,” Xu said, noting that the testnet processed 30 million transactions from 120,000 unique addresses — at a rate of up to 50,000 transactions per second. Testnets are designed to find potential bottlenecks or problems before software has to handle real value in a production environment.



<blockquote class="wp-block-quote">“There’s no Cosmos app in history that has undergone this many transactions…we’re pretty proud, we really put the Cosmos infrastructure through its paces.”</blockquote>



That level of throughput may not be needed today, but smart contract applications are still in their nascency across the ecosystem.



“With the development of several new DeFi protocols in Cosmos, the ecosystem is in need of an IBC native price oracle that allows cross chain pricing data to be transferred safely across networks,” Peng Zhong, former CEO of <a href="https://ignite.com/" target="_blank" rel="noreferrer noopener">Ignite</a>, noted in a statement.



Xu pointed to the <a href="https://cms.blockworks.co/cosmos-developer-ignite-sees-mass-exodus-and-layoffs-as-ceo-exits/" target="_blank" rel="noreferrer noopener">recent shakeup at Ignite</a> — formerly Tendermint Inc., home to the original contributors of the Cosmos SDK — as evidence of the ecosystem&#8217;s decentralized development prowess.



“There’s at least like 20 or 30 different teams building out core Cosmos SDK code. And so what’s really unique is that I don’t think there’s one team that completely centrally controls Cosmos development. It’s already so distributed that even if Ignite goes through this weird restructuring, the Cosmos space is going great.”



Blockworks contacted representatives of Chainlink, Band Protocol and Shade Protocol but did not receive a reply by press time.



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Cosmos-based Umee Lines Up First IBC Price Oracle

Sam Martin

<div id="highlights-block_617725d07bf3f" class="highlights">
 <ul>
 <li>ATOM is up 36% over the past week despite the broader market sell-off</li>
 <li>The Cosmos network is set to thrive in 2022 with increased developer interest and the Theta upgrade</li>
 </ul>
 
</div>



The Cosmos Network is home to nearly 50 protocols representing $151.8 billion of value.



Electric Capital&#8217;s <a href="https://medium.com/electric-capital/electric-capital-developer-report-2021-f37874efea6d" target="_blank" rel="noreferrer noopener">annual developer report</a> revealed that monthly active developers on Cosmos grew approximately 70% throughout 2021.



The rise of Osmosis, a DEX built on Cosmos, has driven significant traffic to the Cosmos ecosystem while attracting $1.2 billion of total value locked (TVL).



The Theta upgrade, scheduled tentatively for the first quarter of 2022, is another upcoming catalyst for ATOM and the Cosmos ecosystem as a whole.



Cosmos&#8217; token ATOM market dominance is approaching an all-time high, currently hovering near 0.47%.



<h3 class="wp-block-heading">Latest in Macro:</h3>



<ul><li>S&amp;P 500: 4,677, -0.41%</li><li>NASDAQ: 14,935, -0.96%</li><li>Gold: $1,796, +0.26%</li><li>WTI Crude Oil: $78.97, -0.60%</li><li>10-Year Treasury: 1.773%, +0.04%</li></ul>



<h3 class="wp-block-heading">Latest in Crypto:</h3>



<ul><li>BTC: $42,017, -3.00%</li><li>ETH: $3,222, -5.90%</li><li>ETH/BTC: 0.0767, -3.04%</li><li>BTC.D: 40.03%, +0.95%</li></ul>



<h3 class="wp-block-heading">Cosmos overview</h3>



As previously <a href="https://cms.blockworks.co/scrt-osmo-and-atom-rally-as-cosmos-ecosystem-claims-center-stage-markets-wrap/" target="_blank" rel="noreferrer noopener">covered</a> by Blockworks, <a href="https://v1.cosmos.network/intro" target="_blank" rel="noreferrer noopener">Cosmos</a>&nbsp;(ATOM) is an ecosystem of blockchains that can scale and interoperate with each other. Historically, blockchains have been unable to interact with one another and had minimal transaction throughput with different programming languages, making it hard to attract developers to new chains.



The Tie released a <a href="https://research.thetie.io/a-journey-through-the-cosmos-atom/" target="_blank" rel="noreferrer noopener">research article</a> on the Cosmos network in July of 2021 describing the ecosystem&#8217;s vision: &#8220;To make it easy for developers to build blockchains and break the barriers between blockchains by allowing them to transact with each other. This vision is achieved through a set of open source tools such as&nbsp;<a href="https://tendermint.com/core/">Tendermint</a>, the&nbsp;<a href="https://v1.cosmos.network/sdk">Cosmos software development kit (SDK</a>) and inter-blockchain communication (IBC), designed to let people build custom, secure, scalable and interoperable blockchain applications quickly.&#8221;



Cosmos is home to nearly 50 protocols representing $151.8 billion of value. Twenty-eight of these protocols are linked via IBC, a protocol designed for interoperability between arbitrary state machines, according to the project&#8217;s website.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="926" height="718" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png" alt="" class="wp-image-13654" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png?w=926 926w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png?w=331 331w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png?w=337 337w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png?w=282 282w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-11.59.27-AM.png?w=80 80w" sizes="(max-width: 926px) 100vw, 926px" /><figcaption>Source: cosmos.network</figcaption></figure>



<h3 class="wp-block-heading">Developer activity </h3>



Electric Capital&#8217;s <a href="https://medium.com/electric-capital/electric-capital-developer-report-2021-f37874efea6d" target="_blank" rel="noreferrer noopener">annual developer report</a> revealed that monthly active developers grew approximately 70% throughout 2021. The Cosmos network is home to over <a href="https://cosmos.network/ecosystem/tokens/" target="_blank" rel="noreferrer noopener">$151 billion of assets</a>, and the third most active developers in all of crypto, behind only Ethereum and Polkadot.



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg" alt="" class="wp-image-13655" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/full-time-devs-since-launch-1024x576.jpg?w=1920 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Electric Capital</figcaption></figure></div>



<h3 class="wp-block-heading">Osmosis: The DEX of IBC</h3>



Osmosis (<a href="https://www.coingecko.com/en/coins/osmosis" target="_blank" rel="noreferrer noopener">OSMO</a>) is an advanced automated market maker (AMM) protocol that allows developers to build customized AMMs with sovereign liquidity pools. Built using the Cosmos SDK, Osmosis utilizes IBC to enable cross-chain transactions, according to the <a href="https://docs.osmosis.zone/overview/#what-is-osmosis" target="_blank" rel="noreferrer noopener">project&#8217;s website</a>, and has driven significant traffic to the Cosmos ecosystem. 



The protocol aims to extend the use of AMMs within the Cosmos ecosystem beyond traditional token swap-type use cases. &#8220;Through the customizability offered by Osmosis such custom-curve AMMs, dynamic adjustments of swap fees, multi-token liquidity pools, the AMM can offer decentralized formation of token fundraisers, interchain staking, options market, and more for the Cosmos ecosystem,&#8221; reads the <a href="https://docs.osmosis.zone/overview/#what-is-osmosis" target="_blank" rel="noreferrer noopener">project&#8217;s documentation</a>.



The Osmosis DEX has logged 1.22 million IBC transfers over the last 30 days, more than double that of Cosmos itself and nearly 10 times more than Terra, according to data from <a href="https://mapofzones.com/?period=720&amp;testnet=false&amp;tableOrderBy=totalIbcTxs&amp;tableOrderSort=desc" target="_blank" rel="noreferrer noopener">Map of Zones</a>.



Osmosis has grown to $1.2 billion of liquidity and over $100 million in daily trading volume, according to its <a href="https://info.osmosis.zone" target="_blank" rel="noreferrer noopener">stats page</a>. Some of the main drivers for growth are:



<ul><li>Incentivized pools paying out very attractive yields to liquidity providers; the ATOM/OSMO pair currently pays out 102.29% APR according to the <a href="https://app.osmosis.zone/pools" target="_blank" rel="noreferrer noopener">application</a>;</li><li>High staking rewards on the OSMO token, currently yielding 95.1% rewards the popular <a href="https://wallet.keplr.app/#/dashboard" target="_blank" rel="noreferrer noopener">Keplr wallet</a>;</li><li><a href="https://twitter.com/0xkrane/status/1478275712444416000?s=20" target="_blank" rel="noreferrer noopener">Airdrops</a> for LP&#8217;s and stakers of OSMO for up-and-coming projects in the Cosmos ecosystem;</li><li>The upcoming integration of CosmWasm smart contracts and <a href="https://defitimes.io/defi-101/superfluid-staking-simply-explained/" target="_blank" rel="noreferrer noopener">superfluid staking</a></li></ul>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="375" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png" alt="" class="wp-image-13662" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-07-at-12.45.21-PM-1024x375.png?w=1156 1156w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Info.osmosis.zone</figcaption></figure>



<h3 class="wp-block-heading">Theta upgrade</h3>



The Theta upgrade, scheduled tentatively for the first quarter of 2022, is another upcoming catalyst for ATOM and the Cosmos ecosystem as a whole. Highlights of the upcoming upgrade, <a href="https://hub.cosmos.network/main/roadmap/cosmos-hub-roadmap-2.0.html" target="_blank" rel="noreferrer noopener">per the project&#8217;s documentation</a>, include:



<ul><li>Cosmos SDK v0.45<ul><li>Groups module: Enables higher-level multisig permissioned accounts, e.g., weight-based voting policies</li><li>Meta-Transactions: Allows transactions to be submitted by separate accounts that receive tips</li><li>Governance module improvements: Execution of arbitraty transactions instead of just governance proposals and will enables much more expressive governance module</li></ul></li><li>NFT module<ul><li>Enable simple management of NFT identifiers, their owners, and associated data, such as URIs, content, and provenance.</li><li>An extensible base module for extensions including collectibles, custody, provenance, and marketplaces.</li></ul></li><li>Tendermint v0.35 — the Cosmos consensus engine</li><li>Interchain accounts<ul><li>A requirement in order to manage accounts across multiple blockchains.</li><li>Aims to provide locking/unlocking mechanisms across IBC-enabled blockchains.</li><li>Allows custody providers to service any IBC connected blockchain through a common interface on the Hub.</li></ul></li><li>Liquid staking<ul><li>Frees secure and low-risk delegations for use in other parts of the Cosmos ecosystem</li><li>Features include enabling transfer of rewards and voting rights</li></ul></li><li>Other potential upgrades still being discussed such as a Cosmos-to-Ethereum gravity bridge as well as budget and farming modules.</li></ul>



<h3 class="wp-block-heading">ATOM dominance</h3>



ATOM is nearing all-time highs in terms of market dominance over the total cryptocurrency market. It currently accounts for 0.47% of the entire crypto market capitalization, according to data from <a href="https://www.tradingview.com/chart/5GPs0hRQ/?symbol=CRYPTOCAP%3AATOM.D" target="_blank" rel="noreferrer noopener">Trading View</a>.



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="1000" height="683" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png" alt="" class="wp-image-13666" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png?w=1000 1000w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png?w=376 376w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png?w=382 382w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png?w=321 321w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ATOM.D_2022-01-07_14-04-28.png?w=80 80w" sizes="(max-width: 1000px) 100vw, 1000px" /><figcaption>Source: Trading View</figcaption></figure></div>



ATOM was last trading near $41.50, up 36.3% over the past seven days, with a market cap of $11.76 billion, according to data from <a href="https://www.coingecko.com/en" target="_blank" rel="noreferrer noopener">CoinGecko</a>. 



For more information on what else is coming to Cosmos in 2022, refer to their recent <a href="https://blog.cosmos.network/whats-coming-to-cosmos-in-2022-ce8e48d383ab" target="_blank" rel="noreferrer noopener">blog post</a>.



<h3 class="wp-block-heading">NFTs</h3>



Trading data from <a href="https://opensea.io/rankings" target="_blank" rel="noreferrer noopener">OpenSea</a> and <a href="https://solanalysis.com" target="_blank" rel="noreferrer noopener">Solanalysis</a> of some of the top Solana and Ethereum projects can be found below:



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="854" height="662" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png" alt="Top Ethereum and Solana projects" class="wp-image-13682" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png?w=854 854w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png?w=332 332w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png?w=337 337w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png?w=283 283w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-08-at-00.20.31.png?w=80 80w" sizes="(max-width: 854px) 100vw, 854px" /></figure>



If you made it this far, thanks for reading! I am looking forward to catching up on Monday.



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<hr class="wp-block-separator"/>

ATOM Splits From Market as BTC, ETH Bomb: Markets Wrap

Jacquelyn Melinek

<div id="highlights-block_61927fa6e348a" class="highlights">
 <ul>
 <li>“This new fund and its size are reflective of crypto being the most exciting frontier in technology,” the co-founders said </li>
 <li>The firm’s portfolio includes 40 different investments to date, such as companies like Uniswap, FTX, Fireblocks, BlockFi and Matrixport, according to its website</li>
 </ul>
 
</div>



Crypto-focused investment firm Paradigm is launching a new $2.5 billion venture fund, Matt Huang and Fred Ehrsam, the company’s co-founders and managing partners, announced on Monday.&nbsp;



The investment will be used to “continue investing in the next generation of crypto companies and protocols.” The fund will also operate alongside Paradigm’s existing flagship fund, the co-founders said.



“This new fund and its size are reflective of crypto being the most exciting frontier in technology. Over the past decade, crypto has come a long way. But cryptocurrencies are still owned by less than ten percent of the global population,” Huang and Ehrsam wrote in a blog <a href="https://www.paradigm.xyz/2021/11/paradigms-new-venture-fund/" target="_blank" rel="noreferrer noopener">post</a>.&nbsp;



“The journey is just beginning, and the potential of crypto has never been more clear,” they added.



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="512" height="341" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Paradigm.jpeg" alt="" class="wp-image-11150" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Paradigm.jpeg?w=512 512w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Paradigm.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Paradigm.jpeg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Paradigm.jpeg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Paradigm.jpeg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Paradigm.jpeg?w=80 80w" sizes="(max-width: 512px) 100vw, 512px" /><figcaption>Fred Ehrsam and Matt Huang; Source: Paradigm</figcaption></figure></div>



The company declined to provide additional comments beyond the blog post when requested by Blockworks on Monday.



In recent months, the firm has led token sales and investment rounds for automated market maker <a href="https://cms.blockworks.co/osmosis-closes-21m-token-sale-led-by-paradigm/" target="_blank" rel="noreferrer noopener">Osmosis</a> and decentralized derivatives exchange company, <a href="https://cms.blockworks.co/paradigm-leads-65m-round-for-decentralized-exchange-dydx/" target="_blank" rel="noreferrer noopener">dYdX</a>, Blockworks previously reported.&nbsp;



Paradigm invests in crypto companies, protocols, and currencies from early stage to late-stage and stages in between.



The firm’s portfolio also includes 40 different investments to date such as companies like Uniswap, FTX, Fireblocks, BlockFi and Matrixport, according to its <a href="https://www.paradigm.xyz/portfolio/">website</a>.



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<hr class="wp-block-separator"/>

Paradigm Launches $2.5 Billion Crypto Fund

<div id="highlights-block_6179750dcbf5c" class="highlights">
 <ul>
 <li>Osmosis includes a decentralized peer-to-peer exchange (Dex) built on built on Cosmos</li>
 <li>Osmosis ranks first among Cosmos IBC-enabled chains by number of IBC transactions</li>
 </ul>
 
</div>



The Osmosis Foundation closed its first fundraise of $21 million today for its automated market maker Osmosis in a token sale led by Paradigm, the company said.&nbsp;



Other participants in the round include Robot Ventures, Nascent, Ethereal, Figment and Do Kwon, it said. The funding will be used to help the foundation grow its Osmosis protocol.&nbsp;



Osmosis is a decentralized peer-to-peer blockchain project built on the Cosmos ecosystem that features an automated market maker (AMM) — <a href="https://osmosis.zone/" target="_blank" rel="noreferrer noopener">Osmosis Zone</a> — with which users can pool liquidity and trade Inter-Blockchain Communication (IBC) enabled tokens, Sunny Aggarwal, cofounder of Osmosis Labs, said in an interview with Blockworks. 



The project has grown from essentially nothing to $500 million total value locked on its decentralized exchange since launching in June, the foundation said.&nbsp;



“We had this initial bump in liquidity, and we noticed every time there’s an addition of new assets, that was sort of when our liquidity grows,” Aggarwal said. “I think really our goal right now is to help grow the Cosmos ecosystem as a whole and get more projects built on Cosmos and existing ones developed,” he added.&nbsp;



The project was launched because Aggarwal and other developers who were a part of the original Cosmos development team wanted to build out applications on Cosmos’ ecosystem, he said.&nbsp;



“Because IBC is this super permissionless protocol, all of these projects were able to set up IBC with Osmosis on the DEX pretty permissionlessly,” Aggarwal said. “We have over 15 assets and for the vast majority of them, Osmosis is the main liquidity venue,” he added.



<figure class="wp-block-image"><img decoding="async" src="https://lh5.googleusercontent.com/BpA_FT4TJZbg0OsJ6xp0DiZp68Wt7M6Vh8_0pOH7Yv6EUOyAe84MOI3FbZG-sxVKM2Gvr2nwXsmVfeuRjIKwjy9fTN3ReeGpSeD58XuXTrlnmoqj6VMWKGu4ws9QtMHFYEOQGRBQ" alt=""/><figcaption>Nearly $50 million in volume was traded on Tuesday, October 26; Source: <a href="https://info.osmosis.zone/" target="_blank" rel="noreferrer noopener">info.osmosis.zone</a></figcaption></figure>



An eagerly anticipated addition to the Osmosis DEX that became available for trading this week is Terra’s LUNA, and its USD-pegged stablecoin UST. Terra’s governance <a href="https://cms.blockworks.co/ftx-token-posts-gains-terra-enables-ibc-markets-wrap/" target="_blank" rel="noreferrer noopener">voted to enable IBC</a> on October 21, and incentives in the form of OSMO tokens have already attracted over $10 million in liquidity to the LUNA/OSMO and UST/OSMO pools.



Osmosis also ranks first among Cosmos IBC-enabled chains by number of IBC transactions, comprising over 42% of all IBC transactions made across the entire ecosystem, according to <a href="https://mapofzones.com/?testnet=false&amp;period=24&amp;tableOrderBy=totalIbcTxs&amp;tableOrderSort=desc" target="_blank" rel="noreferrer noopener">data from Map of Zones</a>. 



In the future, the company will have more DeFi innovations, Aggarwal said. “We want to build on top of this and mature the ecosystem,” he added.