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Difference between revisions of "Osmosis"
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Osmosis, 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 Inter-Blockchain Communication (IBC) to enable cross-chain transactions. | Osmosis, 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 [[Inter-Blockchain Communication (IBC)]] to enable cross-chain transactions. | ||
Osmosis was founded by Osmosis Labs founders Sunny Aggarwal and Josh Lee. Upon raising $21 million in an October 2021 token sale, Osmosis has generated a loyal core of users and established itself as a core feature within the Cosmos ecosystem. | Osmosis was founded by Osmosis Labs founders Sunny Aggarwal and Josh Lee. Upon raising $21 million in an October 2021 token sale, Osmosis has generated a loyal core of users and established itself as a core feature within the Cosmos ecosystem. | ||
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=== On customizability of liquidity pools === | === On customizability of liquidity pools === | ||
Most major AMMs limit the changeable parameters of liquidity pools. For example, Uniswap only allows the creation of a two-token pool of equal ratio with the swap fee of 0.3%. The simplicity of Uniswap protocol allowed quick onboarding of the average user that previously had little to no experience in market making. | Most major AMMs limit the changeable parameters of liquidity pools. For example, [[Uniswap]] only allows the creation of a two-token pool of equal ratio with the swap fee of 0.3%. The simplicity of Uniswap protocol allowed quick onboarding of the average user that previously had little to no experience in market making. | ||
The tools Osmosis provides allow the market participants to self-identify opportunities and allow them to react by adjusting the various parameters. An optimal equilibrium between fee and liquidity can be reached through autonomous experiments and iterations, rather than setting a centrally planned 'most acceptable compromise' value. This extends the addressable market for AMMs and bonding curves beyond simple token swaps, as a limitation on the customizability of liquidity pools may have been the inhibiting factor for more experimental use-cases of AMMs. | The tools Osmosis provides allow the market participants to self-identify opportunities and allow them to react by adjusting the various parameters. An optimal equilibrium between fee and liquidity can be reached through autonomous experiments and iterations, rather than setting a centrally planned 'most acceptable compromise' value. This extends the addressable market for AMMs and bonding curves beyond simple token swaps, as a limitation on the customizability of liquidity pools may have been the inhibiting factor for more experimental use-cases of AMMs. | ||
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# https://docs.osmosis.zone/overview/#what-is-osmosis | # https://docs.osmosis.zone/overview/#what-is-osmosis | ||
# https://coincentral.com/osmosis-sunny-aggarwal/#:~:text=Osmosis%20is%20a%20decentralized%20protocol,Sunny%20Aggarwal%20and%20Josh%20Lee. | # https://coincentral.com/osmosis-sunny-aggarwal/#:~:text=Osmosis%20is%20a%20decentralized%20protocol,Sunny%20Aggarwal%20and%20Josh%20Lee. | ||
[[Category:Protocols]] | |||