Osmosis The Battle of the DEXs

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Front page snapshot of the post is by someone I follow on twitter.

https://twitter.com/TaschaLabs/status/1512867955104571394

Tascha is an expert in crypto themes and one of them discussed today is very interesting to me. Osmosis which is the current main decentralized exchange on Cosmos is reeling in price depreciation in recent days.

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Yet competition for decentralized exchanges is rising and now Osmosis is asked if its a good investment. The time Osmosis has been operating is not long compared to other DEX however there is a solid cast of supporters. Link of Tascha discusses in more details about the exchange and its potential and hurdles ahead. What I would like to bring up is my experience with the exchange and what I think is going to happen to Osmosis in the future.

Use of Osmosis

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The ease of the platform on Keplr is nothing in comparison. Switching between IBC tokens on Osmosis is so easy that anyone on the platform of Cosmos can exchanges. Osmosis being neutral in trading outside of its own exchange makes the potential of trading native token OSMO. The token is not traded outside of its platform so only traders of the token hold it on the DEX.

This can lead to hodlers in a small group relative to all people who trade cryptocurrency. Drawback of this is not many people will know and use OSMO. There maybe a control in price of the token as not many would be sellers however the platform can only grow if Cosmos grows. If Cosmos does not grow then OSMO may struggle.

Conclusions

I have never been on a platform as easy to use as in Osmosis. Trading between level 1 tokens are a tremendous plus but only limited to IBC, aka Cosmos related tokens. The driving force behind Cosmos leading the way in cypto will be a bet for those investing in Osmosis. In other words bet on Osmosis is a bet on Cosmos.

There is more to it though. As Cosmos can expand it will have competition against Osmosis. Right now Osmosis is limited in exchanging between tokens, but future exchanges will have lending and borrowing functions as well as what Osmosis currently offers. In addition there will be platforms that will expand beyond Cosmos layer 1 tokens. It is hard to say if only Cosmos booms then Osmosis will boom. Instead Osmosis will have its own battles to deal with to make itself stand out in the battle of decentralized exchanges.

None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!



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(Edited)

I love Osmosis - its my favorite DeFi. I do see a potential decline in TVL over the next month or two, as other IBC offerings start up.

Crescent (formerly Gravity Dex) launches soon, and will no doubt have enormous APR's to begin. This could suck TVL away from OSMO. Also Junoswap if they every launch their RAW token could impact as well.

Finally, EVMOS will have multiple Dex's, all competing for liquidity. I have seen that it will have some pretty tight integrations with Osmosis, but also the Dex's there will be chasing liquidity with their own tokens, and ETH crossovers.

Going to be interesting to see how Osmosis adapts and keeps ahead of the pack in the next few months, leading up to their first emissions reduction.

Also, have you seen the new, alternate front end for Osmosis? Pegged ETH assets are starting to arrive.

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I believe in Osmosis and its also my favorite DEX. Its not a lot in APR but long term steady investment this is it. Competition of DEX will be fierce but the whole blockchain is so vast and huge I do think Osmosis can fit in and stay relevant for the long run.

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Yeah, I think it will stay as the primary Dex for now. I am watching Crescent closely, and will likely build a position there also. There are plenty of ATOM people that are not fans of Osmosis, and will likely move to Crescent I think. Some shift of funds wouldn't be a bad thing, it would lift OSMO APR's a bit, so long as the price holds up.

Looking forward to seeing how it all plays out.

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Osmosis is a good investment. I have atom and Juno staked. But still not a whiff of airdrop. It must because of minimum needed. I also stake on comdex. I have claimed some of that, pays out generously !

! PIZZA

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I heard of comdex but not invested in that. Will need to look into it some more. !LUV !LOL

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