What Is Osmosis (OSMO) How It Works & Where To Buy It?

Osmosis (OSMO) is a decentralized exchange built atop the Cosmos blockchain. Think of Osmosis as the central marketplace for the Cosmos systems decentralized applications tokens.

Essentially, individuals can trade various Cosmos-based tokens, participate in decentralized finance applications that are yield-bearing, and more.

OSMO token is currently the 41st largest cryptocurrency in the world by market capitalization.

How Osmosis DEX (OSMO) Works

Osmosis is a decentralized exchange that facilitates the trading of IBC-enabled tokens. Users can trade, participate in liquidity pools where they become liquidity providers, and even participate in governance proposals.

Osmosis Labs created Osmosis, an automated market maker (AMM) that powers decentralized trade within the Cosmos ecosystem. The application allows individuals to earn yields in the form of liquidity mining rewards, staking rewards, and more.

OSMO is the governance token and it is also used to pay for transaction fees. All transactions and various actions can only be facilitated once the individual connects their digital wallet. Users are also required to have enough of the native token to pay for transaction fees.

Amidst the recent surge in popularity of decentralized finance applications, users are inclined to participate in liquidity pools where they can earn yields. Many of these applications reward users with financial incentives that are much higher than the yields offered by traditional institutions such as banks.

OSMO token holders also have voting rights for proposals that are put forward which involve upgrades, changes, and any alterations made to Osmosis DEX.

What Is Osmosis (OSMO) Used For?

Osmosis is the marketplace that facilitates token trade in the Cosmos ecosystem. The OSMO token is the native token of Osmosis, it has a variety of uses which include being locked up in liquidity pools to earn interest.

Essentially, individuals simply connect their wallets to the Osmosis application, and then they can engage in a variety of actions. From trading to staking tokens and participating in self-governing liquidity pools.

Osmosis pools are some of the most utilized DeFi instruments used on the application. Allocating liquidity mining rewards is facilitated by the Osmosis protocol.

The total value-locked TVL) in the Cosmos ecosystem exceeds $30 billion, and Osmosis DEX accounts for the 2nd highest total value-locked in the ecosystem.

Where To Buy OSMO

OSMO is the governance token of Osmosis decentralized exchange. It is not available on many centralized exchanges and can be purchased directly on Osmosis.

If you’re unsure where to start, five of the most popular crypto exchanges used by US traders are:

1. Binance
2. Gate.io
3. HTX
4. KuCoin
5. Crypto.com

OSMO tokens have the most liquidity and the highest trading volumes on the native decentralized exchange, Osmosis.

Individuals can participate in a variety of yield-bearing financial instruments within the Osmosis DEX.

About Osmosis (OSMO)

How long has Osmosis (OSMO) existed?

Osmosis DEX launched in October 2021. It was founded by Sunny Aggarwal, who also claims to be a part-time pirate.

The OSMO token has seen significant price appreciation since its listing and is currently trading at $3.94.

What’s controversial about Osmosis (OSMO)?

Any individuals looking to participate in crypto and blockchain need to be cautious and do diligent research about specific projects. The crypto space is flourishing and new projects are entering the space daily.

Unfortunately, there are a lot of ”rug pulls” and scam projects that cost retail investors large amounts of money. Some important things to research before investing are the founders of the project, relevant partnerships, controversies surrounding the project, and any other notable factors.

Let’s take a look at the top controversy surrounding Osmosis (OSMO)

• Tokenomics – Osmosis has a particularly interesting tokenomics model. According to the tokenomics model, the OSMO token is designed to be hyper-inflationary for the first few years – having 1/3 of its annual token issuance reduced, every year. The distribution of tokens is as follows: 45% for liquidity mining rewards, 25% for staking, 25% for developer vesting, and 5% for the community pool.

  However, only 20% of the airdropped tokens are immediately available. The remaining 80% are released only once OSMO token holders complete certain actions like voting on a proposal amongst others.

How many Osmosis (OSMO) tokens are there?

At the time of writing, Theta Network (THETA) has a circulating supply of 282,464,369.00 OSMO (28% of the total supply).

The total supply of Osmosis (OSMO) is 325,000,000.

The max supply of Osmosis (OSMO) is 1,000,000,000.

Can OSMO be mined?

OSMO is not a mineable cryptocurrency. Unlike Bitcoin which uses a proof-of-work consensus algorithm and requires intensive rigs to mine, OSMO uses a proof-of-stake consensus algorithm.

Individuals who stake OSMO tokens can earn yields. Rewards are predominantly allocated (45% of rewards) for liquidity mining, along with 25% OSMO token allocation for staking rewards.

The simplest way to earn rewards is by participating in liquidity pools in the Osmosis DEX.

What is the market cap of Osmosis (OSMO)?

The following calculation is a simple way to work out the market cap of any cryptocurrency: total amount of coins in circulation times the current market price.

OSMO Market Cap = 282,464,369.00 OSMO x $3,93 = $1,11 billion (213th largest cryptocurrency by market cap and the number 1 DEX on Cosmos by market cap).

The market cap fluctuates according to circulating supply and market price.

Biggest Competitors Of Osmosis And OSMO Token

Osmosis is currently the most used decentralized exchange in the Cosmos ecosystem. Osmosis reached daily trading volumes exceeding $100 million in January 2022. Essentially Osmosis is a custom blockchain and application built with the Cosmos SDK.

When considering the competitors of Osmosis DEX, it’s important to remember that its functionality is limited to IBC-enabled tokens at this stage.

Osmosis DEX’s top competitors are:

• PancakeSwap
• Uniswap
• dYdX
• SushiSwap

Osmosis has seen tremendous growth and user adoption since its launch in October 2021. The decentralized exchange currently facilitates the trade of a multitude of IBC-enabled tokens.

At the moment of writing, the daily trading volume (24h) on Osmosis stands at $67 million.

What Are The Future Plans Of Osmosis And OSMO Token

Osmosis labs plan to continue developing the decentralized exchange, enhancing the UX experience with Osmosis Frontier, which improves the permissionless trading experience.

As the DEX grows it with be incorporating CosmWasm smart contract solutions which will improve trading features.

Osmosis is currently the most used DEX in the Cosmos ecosystem and accounts for the 2nd highest total value-locked of any application in the ecosystem.

The expansion and future success of the Osmosis DEX is reliant on how innovative the Osmosis labs PTE can be. So how much real-world utility Osmosis can build, creation of bridges that bolster interoperability between various blockchains, and even more.

Decentralized exchanges are rapidly growing in popularity as individuals are seeking to move away from centralized exchanges which often require sensitive information for the know-your-customer (KYC) process. DEXes are a far more lucrative option that allow any individual to trade, they’re devoid of bias – any users can participate as long as they have tokens, a wallet that can connect, and an internet connection.

DEXes have also grown in popularity because they allow individuals to remain anonymous while performing actions like trading, participating in liquidity pools, and any other feature of the decentralized exchange.

At the moment, the automated market maker (AMM) already has a multitude of features that have contributed to the DEX becoming the biggest and most popular DEX in the Cosmos ecosystem. Growing on this success will likely lead to Osmosis becoming one of the top decentralized exchanges in the world.

Pros And Cons Of Osmosis DEX And OSMO

Pros:

• Biggest DEX in the cosmos ecosystem – Osmosis is the largest decentralized exchange in the Cosmos system – both by market cap and trading volume. At the time of writing, Osmosis had a 24-hour trading volume of $70m – compared to PancakeSwap’s (2nd biggest DEX in the world) which had a 24-hour trading volume of $300 million.
• Users earn rewards – Decentralized exchanges offer users lucrative ways to earn yields. There are a variety of ways to earn passive rewards, some include liquidity mining, staking, and more.
• Custom blockchain – One of the most unique features of Cosmos is that it enables other projects to seamlessly create custom blockchains that have enhanced security features, among other innovative features. Essentially, Osmos is built on its own custom blockchain and can therefore have a lot more control in the curation of its future modifications.
• Real use case – The ethos of crypto is decentralization. That’s why decentralized exchanges have become so popular – people no longer want to give away sensitive information when it’s not necessary. Anonymity has become a priority for many people in the crypto space, and decentralized exchanges are a place where people can easily trade anonymously.

Cons:

• Restricted to cosmos – Even though Osmosis has seen significant growth and bolstered trading volumes, its functionality is currently restricted to Cosmos. The DEX was built to be compatible with IBC-enabled tokens. The projects team has announced its intention to make advancements that will likely enable cross-chain interoperability, making Osmosis a much bigger competitor in the space. PancakeSwap and Uniswap are the top decentralized exchanges in the world and have the highest trading volumes of any DEXes.