Decentralized Exchange (DEX) Osmosis will roll out its v14.0.0 upgrade, dubbed “Neon,” in line with a broader plan to expand product integrations and make cross-chain trading more lucrative for merchants, developers said Wednesday.
The upgrade, scheduled to take place on January 23 at 16:00 UTC at block elevation 7937500, will include a number of important upgrades to Osmosis.
One of the main features of the upgrade is the implementation of geometric TWAP (Time Weighted Average Pricing) in osmosis liquidity pools. In finance, a TWAP is the average price of an asset over a period of time. A TWAP strategy is often used to minimize the impact of a large order on the market by dividing the large order into smaller amounts and executing them at regular intervals over time, according to Binance.
The above will allow protocols built on top of Osmosis to choose between two pricing mechanisms relevant to the protocol to provide users with “concentrated liquidity” – a design that combines the capital efficiency of using a DEX along with improved liquidity pool rewards (LP) increased ).
Liquidity pools refer to tokens supplied by a user to a DEX, which in turn incentivizes users to become liquidity providers in return for a share of transaction fees and free tokens.
The upgrade would also make price movements more efficient and deter liquidity attacks from price manipulation to the upside. Such manipulation has previously resulted in bad actors getting away with manipulating DEXs as much as $100 million.
Read more: How Market Manipulation Led to $100M Exploit on Solana DeFi Exchange Mango
Additionally, Neon will introduce a downtime detection module that will detect if the Osmosis network is down or unavailable and prevent improper liquidations of other credit protocols that rely on Osmosis pricing data.
Osmose developers said it was important to deploy this upgrade quickly to pave the way for upcoming integration of the Mars Protocol, a lending and borrowing marketplace.
Users will not be able to use the Osmosis DEX, and the staking and governance features will also be unavailable until the upgrade is complete.
Osmosis’ native OSMO token is down 3% over the past 24 hours, in line with a broader market decline. The protocol currently holds $160 million in locked tokens, down 90% from its 2022 peak of $1.6 billion.
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