Deploy 2M OSMO to the ampOSMO/OSMO Pool

Thank you Philipp for putting this proposal up for discussion! Given that there is also a proposal live on the forum now to allocate 20m OSMO to the stOSMO / OSMO pool on Osmosis I think it’s worth examining the differences between the two and deciding on whether we should be allocating OSMO to both, only one, or neither LST asset.

While I love the concept behind a protocol-native LST like ampOSMO (generating some tx fees from on-chain LST activity is always a good thing, right?) I worry that the ask here far outweighs the utility that the Osmosis community would get and the level of protocol alignment that Eris Protocol has had with Osmosis historically. Let’s do a deeper dive on this.

Protocols Should Pick Winners

Eris protocol is primarily a Terra ecosystem project, which is where it has the bulk of its TVL and devotes the bulk of its resources and attention. As @0xPhilipp himself has noted in a proposal on Terra, it’s acceptable for protocol chain governance to not treat all LSTs as equal and pick winners. I think that this logic is sound. Protocols should devote the bulk of their attention and financial support to the liquidity partners that will help them grow and with closely aligned incentives.

In alignment with your statements above, Eris Protocol has not devoted any time and attention to Osmosis, and should show improvements on contributing to Osmosis before asking for nearly $3.5 million in community pool funding. The ampOSMO / OSMO pool on Osmosis currently only has just over $2,000 in liquidity in it, despite the protocol having already been live on Osmosis for 3 months. Eris Protocol has devoted no liquidity or incentives to Osmosis at all to help bolster the growth of ampAssets in the ecosystem.

In fact, when Eris had the opportunity in a recent proposal to build out liquidity for ampLUNA on Osmosis (where LUNA liquidity is sorely lacking), they didn’t do so, and instead sent those funds to competitors. IMO this is totally fine, I think it makes sense to devote resources like this to protocols that are best suited to support your goals, but Osmosis should be taking the same approach in choosing its partnerships. Even stkOSMO and qOSMO are devoting liquidity incentives to Osmosis.

In contrast, Stride devotes well over $100,000 per month in liquidity incentives to bolster liquidity on Osmosis, not just for stOSMO, but for non-Osmosis native assets like stATOM, stSTARS, and stJUNO as well. In aggregate, stAsset pools make up 20% of Osmosis liquidity. They are the largest liquidity partner for Osmosis behind Axelar. The mutual relationship between Stride and Osmosis is extremely important to Osmosis’s ongoing success. Stride is even considering putting up a gov proposal to ask for Cosmos Hub community pool stATOM as protocol-owned liquidity on Osmosis. While I’m pretty skeptical that this would pass Cosmos Hub governance, it still demonstrates the level of strategic alignment that Stride has with Osmosis

Stride has worked with Mars Protocol to help ensure that stOSMO gets listed as a collateral asset on Mars should their proposal pass. This is an important usecase for LST OSMO as Mars transitions into Mars v2. If Eris’s proposal were to pass and Stride’s does not, the ampOSMO pool would have neither a the liquidity nor the necessary redemption rate scaling factor adjustment contract to satisfy Mars’s risk frameworks and get ampOSMO listed as collateral on Mars. This liquidity investment thus buys us far less than Stride’s proposal does.

We Probably Should Not Pass Both Proposals Together

Passing Stride’s proposal does not necessarily mean that we should not devote any protocol owned liquidity to ampOSMO. I think it’s fine to help bootstrap adoption of other LSTs on Osmosis and help diversify LST OSMO liquidity. The community pool is underutilized as I’ve mentioned several times, and with a possible removal of incentives coming up soon, I feel that POL is the only way that we’ll be able to support liquidity for certain assets, especially those that don’t use Supercharged Pools.

However, collectively the Stride and Eris proposals will comprise 30% of the community pool. While Eris’s proposal is smaller, the investment returns are far smaller for what is being asked as well.

I would suggest revising this proposal down to a more reasonable ask like 500k or 1m OSMO (which should be enough to get it listed as collateral on UMEE). When Eris has demonstrated its commitment to Osmosis, we should revisit this proposal and think about increasing the size of the ask at that time.


While I don’t receive any compensation from Stride, I administer their host chain delegation program (for free) and am a Stride governor. Feel it’s important to disclose these potential conflicts of interest even though I will always consider the best interests of Osmosis first when discussing Osmosis proposals.