Dear Osmosis Community,
When looking through the Cosmos, it is clear that Osmosis has shown a dominant presence as the most successful DEX in the ecosystem. Concurrently when looking at lending platforms in Cosmos it is quite apparent that the Umee UX Chain is the dominant lending platform in Cosmos with more special features than any other lending platform in crypto. Considering the potential synergies, we’re proposing a merger of these blockchain protocols into one of the most powerful DeFi ecosystems possible.
- Code Development Integration:
In this proposal, we will recommend that the UX Chain will transition its code development to be built on top of the Osmosis blockchain. This means reimplementing the code base on the Osmosis chain in order to benefit from the pre-existing liquidity, TVL, and functionality. This strategic move will foster greater collaboration, code optimization, and superior product design in DeFi. This means implementing all of the most advanced lending features onto Osmosis and ensuring that these features can be blended with the Osmosis codebase.
Concurrently this would benefit from shared TVL between the two networks. By combining the TVL between protocols, the goal will be to onboard larger portions of market share within this synergistic ecosystem. By consolidating development efforts, we aim to enhance the technical capabilities of both chains and unlock new possibilities for DeFi.
- Mesh Security Collaboration:
Mesh Security research is one of the most important aspects of the evolution of chain development. The UX chain will actively collaborate with the Osmosis chain to bolster mesh security. The combined expertise of both projects will contribute to creating a more secure and resilient network, ensuring the safety of user assets and the overall stability of the ecosystem.
This collaboration will involve a deep integration of security protocols and a joint effort to address potential vulnerabilities.
- Potential Token Swap/Migration:
As part of the merger, this proposal opens up the possibility of discussing a token swap or migration mechanism. This process will ensure a seamless transition for the community, aligning token values and functionalities. The goal is to maintain fairness and transparency throughout the tokenomics, providing a mechanism towards ensuring proper value is ensured between both networks.
Tokenomics is one of the most important aspects of a decentralized network, so further analysis and due diligence will be put in place around discussing the most efficient mechanism for ensuring proper alignment. Feedback and direction will be requested from the community on how best to execute this process and the exact execution will be discussed and decided on at a later date in the future.
Benefits of the Merger:
UX codebase can be used as a leverage feature for Osmosis Spot Margin Trading.
A lending protocol alongside a dex protocol allows a market for shorting crypto assets.
By combining the features of a lending protocol and dex, you can instantiate more streamlined liquidations for the lending protocol.
The UX chain deploys a stablecoin aggregation system called the meToken. This acts as an index for stablecoins. By combining this stablecoin index token with Osmosis, you have the potential for a powerful stableswap combination.
Interchain Flash Loans
By combining the architectures of a Lending protocol and a DEX, the first interchain flash loans can be developed.
Multiple MEV markets can be developed from both a dex and lending platform.
What can we expect from this:
Enhanced Technical Capabilities: The integration of the UX Chain’s code on Osmosis will result in a more powerful and versatile blockchain platform.
Improved Security: The collaboration on mesh security will create a more robust network, minimizing potential vulnerabilities and attacks, while enhancing overall user confidence.
Unified Token Ecosystem: The potential of a token swap/migration would simplify the user experience and align the community towards a common goal, fostering unity within the ecosystem. More discussion would be needed if this were a path in the future.
In this initial phase of the merger between Osmosis and the Umee UX Chain, the focus will be on product design and a merging of the code bases. This product-centric approach of implementing the UX Chain leverage module onto the Osmosis chain is to ensure that the most advanced DeFi product is developed towards offering the best functionality in crypto.
For this initial proposal, the Osmosis chain and the UX chain will both remain in existence. Additionally, the Osmosis token and the UX token will both remain as independent tokens for this initial phase. Future iterations and ideas on chain and token configuration would be dependent upon the community governance to decide.
This Forum Discussion has been adapted from the original Forum post on the Umee UX governance forum linked here:
This forum post to Osmosis governance is the first step towards pursuing the merging of joint codebases between these protocols. Your feedback is crucial in shaping the future of this proposed merger. We encourage the community to share thoughts, concerns, and suggestions to ensure a well-informed decision-making process.
We are excited to explore this new development in our long term roadmap. Let’s work together to make this merger a reality and unlock new possibilities for the Cosmos ecosystem!