Osmosis
Cosmos SDK
Osmosis is an interchain DEX where users can create liquidity and trade IBC-enabled tokens. As an AMM protocol created using the Cosmos SDK, it is also considered a Hub in the IBC ecosystem. Osmosis' vision is to provide a sandbox for AMM development. The protocol enables developers to iterate on new, customized AMM designs by using existing liquidity pools and modules already running on the network. It also features an on-chain governance system that allows each AMM pool's stakeholders (i.e. liquidity providers) to control and direct their pools in a sovereign way.
Osmosis was the first Cosmos-based chain to popularize IBC transfers. IBC transfers had been available for several months before but there was little actual demand from the connected chains; therefore, the volume of IBC transfers was extremely low. Being the first AMM on Cosmos, Osmosis offered the ability to trade and earn rewards through liquidity provision.
APY | ~60% |
Total Supply | Capped to 1B (285M currently) |
Compounding | Manual |
Compounding Frequency | Available every block (manually) |
Reward Distribution Period | Every block (<1 minute) |
Unbonding Period | 14 Days |
Figment Validator Address | osmo1hjct6q7npsspsg3dgvzk3sdf89spmlpfqua7lv |
Recommended Wallet | |
Slashing Penalty | 5% for double signing, no slashing for downtime but the validator gets jailed after ~2 hours downtime |
Validator Diversity | 135 Validators in the active set |
Once you have OSMO tokens in your Keplr wallet, simply follow the steps below:
- 1.
2. Clicking the “Stake” button will link out to: https://wallet.keplr.app/#/osmosis/stake which contains information on Osmosis staking and validators.
3. Find Figment in the Osmosis validator set and click the “manage” button. Click “delegate”, and then enter the amount you want to delegate. Always remember to keep some Osmosis available to pay for transaction fees.
4. Click “delegate” and then click “approve” to approve the transaction.
Shortly after you approve the delegation transaction, your stake will go into action! You have successfully delegated your OSMO tokens. Click here for more information on the Keplr wallet.
For Osmosis Fairdrop participants, the action above of staking to a validator will unlock a 20% of the airdrop. To receive the rest of the airdrop, the steps below will detail: making a swap, adding liquidity, and voting in governance.
- 1.Head over to the “Trade” section on https://app.osmosis.zone/ and select your desired tokens to swap.
2. When you are ready, click “Swap” and then approve the transaction.
Once the transaction is approved, you have successfully completed a swap on Osmosis, unlocking 20% of the Fairdrop.
- 1.To add liquidity on Osmosis, head over to the “Pools” section on https://app.osmosis.zone/ where you will find liquidity pools on Osmosis
2. Please note that to add liquidity, you will need OSMO, and another IBC token like ATOM, AKT, or XPRT. For this tutorial, we will be adding liquidity to the 50% ATOM, 50% OSMO pool. Click on the pool, and then click “Add / Remove Liquidity”
3. Enter your desired amounts, click “Add Liquidity” and then approve the transaction. Once approved, you will have successfully added liquidity to an Osmosis pool, unlocking 20% of the Fairdrop.
- 1.
2. Clicking “Vote” will bring you here to Keplr: https://wallet.keplr.app/#/osmosis/governance where you can vote on Osmosis governance proposals. To learn more about a proposal, click on the “Details” button.
3. When you are ready to vote, click the blue “Vote” button, and you will be presented with a couple options.
4. Lock in your vote, press “Confirm” and once you have approved the transaction, you have successfully voted in Osmosis governance, unlocking 20% of the Fiardrop.
If you followed all the steps above from staking to a validator, making a swap, adding liquidity, and voting on governance - you will have successfully unlocked 100% of the Osmosis Fairdrop.
We hosted an AMA with the Osmosis Team on June 14th, for more Osmosis information, check out our AMA recap.
The forums for discussion are held on their telegram and discord channels but anyone can make a proposal even without any discussions. Proposals are made on mintscan.io. Osmosis uses Delegated On-Chain Governance. Any OSMO holder can participate directly in Osmosis governance via the Osmosis app or CLI, and any OSMO holder may submit a new governance proposal by submitting a small deposit which functions to prevent spam. [Note: When participating in Superfluid Staking through a participating liquidity pool, OSMO delegated to a validator in this manner can no longer be used by the delegator for voting, and voting for these tokens takes place at the validator level.]
What is staking?
On a Proof of Stake blockchain, staking is the act of depositing tokens in order to become a validator; that is, to participate in proposing and attesting to transaction blocks. Anyone with a minimum necessary coin balance to be a part of the active set of validators can validate transactions and earn staking rewards on these blockchains.
What is the name of the asset being staked?
The Osmosis AAM Protocol token, OSMO, is used for staking, and participation in on-chain governance.
Where can I explore the network and create an Osmosis wallet?
How long does it take to stake and unstake?
It takes 14 days to unstake your OSMO.
When are staking rewards and transfers enabled?
Staking rewards and transfers are currently enabled, and are liquid until staked or provided as liquidity to a corresponding liquidity pool. Transfers may occur using Osmosis functionality and via IBC.
Is staking income liquid or automatically staked?
Staking income on Osmosis is automatically distributed every epoch (~1 day). Figment is never in control of your rewards. Staking income is not automatically compounded, and a new delegation is required before rewards begin earning staking rewards.
Can I lose potential staking rewards?
Your potential rewards depend upon validator performance. There is no slashing for downtime, but validators are jailed after 50 hours of downtime, which will make the validator and its delegators ineligible to earn staking rewards until un-jailed. Validators may submit an un-jailing transaction 60 seconds after becoming jailed, which will enable them to earn staking rewards once approved. If a validator double-signs a transaction block, they and their delegators will be subject to a 5% slash and the validator itself will be permanently jailed (or “tombstoned”). To date, Figment has never been slashed.
What is the rate of new issuance (aka "annual inflation") for OSMO? How does the token supply change?
In the first year, 821917 OSMO in rewards are distributed daily (per epoch), with 25% of it going to stakers. This means that the new issuance rate will be 292.8%. Since stakers get 25% of that, staking returns are at minimum 73.2% annually. Rewards will then be cut by 1/3 each year.
What affects future yields?
Osmosis currently pays yield based on an inflation model that gradually decreases the amount of tokens released to stakers by ⅓ every year, with rewards paid out to validators, stakers, developers, the community pool, and liquidity providers by the protocol’s incentive parameters. Following the initial released supply of 100m OSMO in June of 2021, in year one 300m tokens will be released, in year two 200m, and so on, until a maximum supply of 1bn OSMO issued is reached.
These parameters may be changed through governance, but it is expected that after all tokens have been released under this model (1 billion OSMO), Osmosis will become a transaction fee-based protocol for staking rewards. Network transaction fees are currently set to zero, but this is subject to change as incentives become altered over time.
Do I maintain custody of my OSMO tokens? Who or what controls my staked OSMO token?
Figment has partnerships with a number of top-in-class custodians: Please contact [email protected] for inquiries.
How are decisions about Osmosis made and executed?
Decisions about the protocol, which include things like parameter changes, incentives payouts, and community fund allocations, are decided by OSMO holders through the governance process. Discussions occur on the forum known as Commonwealth, and voting takes place through the Governance tab in Keplr. Validators will vote on behalf of their delegators as a default unless the individual delegator overrides that vote with their own. In this way, validators act as a default proxy vote, but delegators retain the right to individually vote on proposals (except for tokens engaged in Superfluid Staking, in which case only validators can use superfluid OSMO to vote on governance proposals).
Last modified 5mo ago