Osmosis DAO, the community that manages the Cosmos-based decentralized exchange and app chain Osmosis, will vote in favor of adopting a “fee-free” Bitcoin bridge through Nomic, a decentralized bridging protocol.
Currently, approximately 91.7% of votes are in favor of the proposal, out of a 46.4% voter turnout, and voting is scheduled to end at 7 PM ET. So far, only 1.2% opposed this measure and 7.1% abstained. Once the upgrade is approved, Bitcoin will be able to move more freely into the Cosmos ecosystem for DeFi-related activities.
The proposal introduces a new protocol revenue sharing agreement between Nomic and Osmosis that aims to improve Bitcoin liquidity on the platform by replacing current bridging fees.
Nomic currently allows users to receive the Bitcoin-backed asset nBTC by depositing Bitcoin directly into Osmosis, with a capacity limit of 21. BTC
+0.85%
The deposit fee is 1% and the transfer fee is 0.5%.
Under the proposal, Bitcoin bridging fees would be waived for transactions originating or terminating on Osmosis. However, you may still be charged a flat Bitcoin mining fee when withdrawing in Bitcoin to cover transaction fees.
In return, Nomic will receive a portion of taker fees by trading nBTC and its derivatives on Osmosis to encourage usage on the chain. The proposal stipulates that Nomic will receive 10% of total taker fees on nBTC-related transactions through Osmosis, and a proportional share of the fees on transactions involving nBTC derivatives.
Osmosis users can therefore benefit from reduced Bitcoin transaction costs and integrate Bitcoin liquidity directly into the Osmosis ecosystem without additional connection costs.
This mechanism will be implemented for an initial six-month period if approved by Nomic and Osmosis governance, or during future software upgrades until replaced by mutual governance arrangements.
“If passed, this proposal would be an important milestone for DAO-DAO transactions. “This provides a new ‘rev share’ business model for bridges, something that is uniquely possible through AppChain.” Osmosis co-founder Sunny Aggarwal wrote on the Osmosis forum.
What are osmosis and nomics?
Osmosis is an independent layer 1 blockchain built using the Cosmos software development kit, specifically designed to support decentralized exchanges and automated market making capabilities. It claims to be one of the most active ecosystems in terms of developer activity.
According to DeFiLlama data, Osmosis is one of the largest protocols in the Cosmos ecosystem, with a total value of $124 million locked (deposited) on chain. It is also one of the top 15 decentralized exchanges across all chains, with a cumulative trading volume of $33.8 billion.
Built on developer Turbofish’s Orga, a custom, high-performance blockchain application framework, Nomic allows users to securely connect their Bitcoin to blockchains running the Inter-Blockchain Communication Protocol (IBC), Cosmos’ cross-chain messaging and bridging protocol. can.
Nomic has enabled the Native Bitcoin (nBTC) interchain upgrade in October 2023, paving the way for native tokenized Bitcoin transfers within the Cosmos ecosystem. Before the introduction of the nBTC interchain upgrade, there were no options for users who wanted to transfer Bitcoin to the Cosmos network through a decentralized method. The lack of a dedicated bridge protocol meant that users had to convert Bitcoin to other cryptocurrencies, adding complexity.
Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.