Automated market maker and decentralized cryptocurrency exchange Osmosis is gearing up for its Magnesium upgrade to version 16, which is expected to result in overflowing liquidity pools.
Supercharged Liquidity is Osmosis’ approach to concentrated liquidity, designed to allow users to specify pool positions – while allowing flexibility in asset usage.
“It allows users to set positions in spot price intervals instead of percentages. That means you can lock positions at $1.21.1 to $1.21.2,” Osmosis Labs marketing director, also known as Emperor Osmo, told Blockworks.
Liquidity providers will also have the ability to lock positions across an entire price range, Osmo said.
“The new model will allow continued participation in Superfluid staking pools without interruptions,” he said. “This means LPs can benefit from swap fees while also earning staking rewards with their OSMO tokens.”
The first charged liquidity pool that will be introduced along with the v16 upgrade will be the DAI/OSMO pool.
The upgrade will happen around 12pm ET on July 13 – if the proposal goes through – and is expected to take about 30 minutes, with the network shutting down during that half hour.
The introduction of supercharged liquidity pools has also allowed the protocol to overhaul the tokenomics of its native token, OSMO.
Osmo 2.0 aims to lower inflation and rebalance issuance to favor stakers over liquidity providers.
“The updated Tokenomics model serves to improve Osmosis from an incentive-driven DEX to a volume-driven DEX,” said Kaiser Osmo. “The reduced issuance combined with increased capital efficiency focuses on volume rather than depth of liquidity. This is critical as the high issuance required to throttle liquidity for large deals is no longer required thanks to Supercharged Liquidity.”
Other proposals are in the works. Included with this push is a proposal that aims to give stakers a share of swap fees earned through the Osmosis liquidity pool.
While the log-taker fee adds value for Osmo owners, an Osmosis community member named Seppmos said, “It shouldn’t come at the expense of merchants and degrade UX.”
“Traders will eventually move to where they have the lowest swap fees and best price execution,” they said. “Should traders have to pay up to 0.45% for a swap on Osmosis, it won’t be long before people will switch to alternative DEXes.”
Receive the top crypto news and insights of the day via email every night. Subscribe to Blockworks’ free newsletter now.
Want Alpha delivered straight to your inbox? Get ideas on Epee trading, governance updates, token performance, must-see tweets and more from Blockworks Research’s daily debrief.
can’t wait Receive our news as soon as possible. Join us on Telegram and follow us on Google News.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.