Osmosis prisOSMO $0.591

Osmosis was launched by the members of two core Cosmos teams: Sunny Aggarwal and Dev Ojha from Sikka validator and Tendermint, and Josh Lee and Tony Yun from Keplr, the Interchain Wallet.

One of the investors in Osmosis is Paradigm, a digital asset investment firm with stakes in countless other blockchains and protocols like Uniswap, Maker, and Coinbase to name a few.

The Osmosis blockchain protocol has three key strengths that set it apart from other AMM money market protocols.

First, Osmosis has customizable liquidity pools. Unlike Uniswap, where LPs can provide liquidity only to a two-token pool with an equal ratio, Osmosis allows for providing liquidity to pools with several tokens and unequal ratios. Osmosis argues that agents in a maturing DeFi market like arbitrageurs and LPs need a more flexible solution that allows them to self-identify opportunities and react to them by adjusting parameters. Thus, on Osmosis LPs can adjust factors slippage, transaction fees, and more.

Coordination between stakeholders is of equal importance, which is why liquidity pool shares on Osmosis are not only used to calculate the fractional ownership of a liquidity pool, but also the right to participate in the strategic decision-making of the liquidity pool as well. This incentivizes long-term liquidity provision and prevents possible vampire attacks from other protocols. Thus, liquidity providers with more skin in the game get a bigger say in the strategic direction of the pool, which is in line with the bigger risk they're taking.

Finally, Osmosis introduces the idea of "AMMs as serviced infrastructure." With an increase in the amount and complexity of DeFi products, AMMs have had to:

• Compromise efficiency and trade on AMMs with non-optimal bonding curves.
• Take on the risk of building a custom AMM to maximize efficiency.

Osmosis wants to remedy that by providing AMM creators with an option to define the bonding curve value function and reuse the rest of the infrastructure using Osmosis' products.

OSMO is the protocol's governance token with a total supply of 1 billion. At genesis, 100 million OSMO was released, split evenly between airdrop recipients and a strategic reserve. Tokens are being released at the end of each daily epoch and follow a "thirdening" schedule, meaning token issuance is cut by a third each year. In the first year, 300 million OSMO will be released, in the second 200 million OSMO, in the third 133 million OSMO, and so on. Newly released tokens are distributed as follows:

• Staking Rewards: 25%
• Developer Vesting: 25%
• Liquidity Mining Incentives: 45%
• Community Pool: 5%

The total token distribution is as follows:

• Liquidity Reward Mining: 40.5%
• Developer Vesting: 22.5%
• Staking Reward: 22.5%
• Community Pool: 4.5%
• Strategic Reserve: 5%
• Airdrop: 5%

Check out Near Protocol (NEAR) — a popular layer-one blockchain.

Check out Cosmos (ATOM) — the blockchain Osmosis is built on.

Read our deep dive into index fund tokens.