Swing Integration Proposal w/ Osmosis (AMA Recap)
Swing Integration Proposal w/ Osmosis (AMA Recap)
Discussing the upcoming Swing Integration Proposal with Osmosis Team.
Today, we're discussing the Swing Integration Proposal with Osmosis. Joining us is Aaron from Osmosis and Sam from Swing. We'll introduce both platforms and talk about the proposal and plans for integration.
Swing is a Cross-Chain SDK that aggregates liquidity from multiple chains, bridges, DEXes, and aggregators. It has strong backing from reputable VCs and experienced team members.
Osmosis aims to enable one-click swaps between chains and achieve infinite interoperability. It leverages the Cosmos Network and the IBC protocol for seamless cross-chain transactions. Aaron, from Osmosis, will explain its key features.
The Swing integration proposal focuses on enabling Cross-Chain swaps between EVM and Cosmos on Osmosis. This integration will strengthen the liquidity options and expand the ecosystem. Sam will discuss the role of the Cross-Chain Swaps contract in this proposal.
Aaron will highlight the benefits of Osmosis liquidity pools, including the upcoming concentrated liquidity pools and order books. Sam will emphasize how Swing helps teams onboard liquidity from various blockchain ecosystems.
The governance model of Osmosis involves community participation and decision-making through forums and voting. Swing's proposal is currently open for review and feedback on the Commonwealth Forum.
Please feel free to provide any feedback or thoughts on the proposal. We value your input and are open to improvements.
Let’s get it started!
Introduction from Aaron:
I'm Aaron. I'm leading the growth and strategy side for the Osmosis labs and am super excited for Swing to get integrated. I think it's a valuable case, what you guys are bringing connecting these 24 chains and even bringing liquidity. We always need more of that.
Introduction from Sam:
I am the co-founder of Swing. Happy to tell you guys a bit about my journey when I joined a growing crypto space back in 2017 - 2018. I did several projects back in the summer of 2020 and did everything I could to explore DeFi.
When we started Swing we were focused on Polkadot and were called PolkaSwitch. We're focusing on Cross-Chain technology from day one. But then the pivot to all EVM chains came along and now it becomes Swing.
Question #1: Can you provide an overview of Osmosis and its key features that sets it apart from other decentralized exchanges?
Aaron: I think it'd be valuable to dive into how Osmosis came to be, and what the vision was. Back in the Cosmos Hub's initial starting days, the founders of Osmosis were working on the Cosmos Hub, and they had this vision that the Cosmos Hub would be the hub to facilitate all interoperability through not just the Cosmos ecosystem, but the entire space as a whole. And that wasn't exactly unfolding as smoothly and quickly as many people were hoping. So the Osmosis team kind of spun off and they started Osmosis and one of the simplest ways to envision this goal is that basically you can just one click swap from anywhere, not just crypto, but eventually the dream is that you can go from anywhere to anywhere, whether it's from the Ethereum ecosystem through Osmosis to the Polkadot ecosystem or going from the Avalanche ecosystem through Osmosis to any other ecosystem of choice or potentially fiat on-ramps from one country to another. And that's kind of how the naming came to be Osmosis. And again, this isn't anything that's set in stone or on a road map right now, but these are just kind of like dreams that people have, aiming for infinite interoperability. But right now, one of the things that separate Osmosis from other decentralized exchanges is that it's built with the Cosmos tech stack. So Uniswap or Trader Joe, they're kind of like siloed ecosystems and they're beholden to their tech stack. Being built on Cosmos allows interoperability seamlessly through all these 58 other chains and might be over 60 at this point that are connected through IBC. And at the same time, a lot of the things that the Cosmos tech stack allows these other ecosystems do not allow, and it's just a lot more efficient, quick, customized, and viable.
So being the liquidity center for the Cosmos ecosystem, most things launching in the Cosmos ecosystem come to Osmosis for their initial asset integrations so that their asset is available to the ecosystem. And our core team is currently working on a concentrated liquidity rollout, which is just like the UniV3.
There are still the classic pools. They still have a case, but with the shift towards these concentrated liquidity pools, which we call Supercharge Liquidity is just something that requires far fewer incentives to maintain a sufficient amount of liquidity and at the same time it's just far more capital efficient. And then after the concentrated liquidity rolls out, our team will be working on order books, which we are calling LOOT Books, which will stand for Limit Orders On Tick Boundaries, which is placing limit orders with the concentrated liquidity price ranges.
Question #2: Can take us through what exactly the Swing integration proposal is and how it relates to Osmosis?
Sam: I think for Swing, we share the same reason. We're also trying to enable cross-chain transfer and swaps across anything from EVM chains to Osmosis, including Cosmos. For our integration proposal, we're trying to enable a Cross-Chain swap between EVM and Cosmos. I'm pretty sure this is going to be the first step, afterwards, we're going to maybe enable more applications like Cross-Chain staking and Cross-Chain anything. I guess after our proposal goes live, we're going to make sure to have Osmosis and also the whole Cosmos ecosystem to get more liquidity from EVM or other non-EVM ecosystems. Cosmos is one of the best cross-chain native ecosystems with a lot of action. It will bloom up all of the products within Cosmos and also Osmosis.
Question #3:How does Osmosis leverage the Cosmos Network and its IBC protocol for cross-chain interoperability?
Aaron: Coming back to the IBC technology for listeners that may not know what it is, this is probably the most powerful tool in all of the crypto space that allows for seamless native bridging and the way you can think of it in a real-world example is all these shipping ports that are in different countries. Whether it's shipping from Shanghai to San Francisco or San Francisco to Portugal, these cities and the natives don't necessarily speak the same language. They all speak different languages. But the shipping ports all have the same standard of communication and they have the same standard of shipping boxes.
They know how to work with each other because everything is standardized. So these chains in the Cosmos ecosystem, they aren't necessarily going to be the same. They all do different things. Some of them might just be forks, of course. But a lot of these chains are highly custom and different, but they still can speak with each other because they have to standardize the way the assets are created.
So let's say, a token or asset on Juno or let's say Osmosis, of course, they can all interoperate with other chains because they're all built with this standardized method. That is the base of IBC. But the way Osmosis is leveraging that beyond the obvious of just smooth and seamless quick and cheap transactions is that we have things like cross-chain swaps, of course.
So whether you want to make a swap on one chain and come back to Osmosis without ever having left Osmosis, that can be done, or whether it's fee abstraction. So fees that are paid on other chains can utilize the Osmosis DEX to pay these fees. There will be mesh security which also leverages IBC, whereas other chains can kind of like the Nato Alliance, another real-world example. But they can have a stake of their network staked to a separate network just by combining their security. So, yeah, these are some examples of just leveraging IBC.
Question #4: Can you explain the role of the Cross-Chain Swaps contract in the Swing integration proposal?
Sam: It is a bit on the technical side but the Cross-Chain Swaps contract deployed on Osmosis is the most important building block of our whole cross-chain swap application. It is pretty similar to the UniV3 router contract. It will find the best path to swap one token for another with the best liquidity on Osmosis and forward the token to the user's wallet on Osmosis or another chain thru IBC.
Question #5: What are the benefits and advantages of these liquidity pools on Osmosis compared to let's say traditional order-based exchanges?
Aaron: They offer more than just that. But the thing that Osmosis offers, historically they're just the classic pool. So most people come for the reward. They want to earn incentives. And these are paid out every these are distributed every day at the epoch when the emissions go out. But the reason why order books are several was that they're all the kind of like just like the base need that an exchange would have.
A lot of centralized exchanges pretty much have order books, right? And this is a missing puzzle piece right now, but it needs to be built out on something. You can't just exist without the earlier primitives. We have the pools there, the classic pools, the balancer, V2 pools, or the concentrated liquidity pools coming soon.
For anyone that doesn't understand how a concentrated liquidity pool works and why it's so valuable, think of a classic pool as this giant, infinite-range pool where the price can go from zero to infinity. And that cost liquidity pools are essentially these classic pools. But with ranges, think of these classic pools as a bucket and the concentrated liquidity pools are an infinite amount of these buckets and you get to decide how large the bucket is.
If you want your assets in a very small range ratio your bucket will be very small. But if you want to expand that, you can have a larger bucket. And the idea is that these order books will be placed on the tick boundaries of these buckets. So it'll be a native order book. It wouldn't be centralized, obviously, and this is why it's a little difficult because it's not centralized and we are building it as the first in the Cosmos ecosystem.
It's coming from the ground up.
Question #6: How will Swing help teams who are building on Osmosis or Cosmos onboard liquidity from different blockchain ecosystems?
Sam: At Swing, we bring liquidity to your doorsteps from 24+ EVM & Non-EVM blockchain ecosystems. We aggregate decentralized liquidity from popular cross-chain bridges like Axelar, Hop, LayerZero, Celer, DEXes like Uniswap V3, and DEX aggregators like 1inch, Paraswap, DODO, etc). After we pass this proposal on to Osmosis, we will be able to bring all this liquidity to Osmosis users which opens up the decentralized way of swapping tokens from EVM to cosmos app chains. With the current CEX situation in the US, I am sure more and more people will move towards a more decentralized future with DEX to swap tokens and bridges to transfer tokens without relying on any server which might be subject to censorship and restrictions.
Question #7: Can you elaborate on the governance model of Osmosis and how the community members participate in the decision-making process?
Aaron: The process will be essentially Swing will go to the community forums and post about the proposal that's going to be going up as a draft and the community wants to see that at least for three days on the forum before it goes on-chain. And this gives the community three days to read into it, offer edits, and gives time for Swing to offer any edits.
Anything that goes up before this period is supposed to be vetoed or not voted on because even if it's a great proposal we want this three-day forum for discussion and after the three days you go up, you go on-chain, you make your proposal up there, you probably want to share it with the community, let them know what's up, and then people go up to vote. And then I believe that's a five-day voting period.
Question #8: To sum it all up, what are some use cases wherein Swing would be particularly useful or valuable?
Sam: Yeah, I would love to recap everything that I mentioned earlier. As I said the major use case would be to enable Cross-Chain Swap from the EVM ecosystem to Cosmos. For application builders, I think running a wallet will be able to help you enable Cross-Chain swaps from EVM to Cosmos.
If you use the Swing SDK or widget, we'll be able to help you so that you don't have to develop everything from scratch. A developer just needs to incorporate our widget and then boom, you have access to the swapping ability. Later on, we are going to explore cross-chain staking and other cross-chain applications that can be built upon this infrastructure and more. Cross-chain swap is the first step with this current proposal. Users will be able to choose any app-chain as the destination chain and trigger the cross-chain swap with only one-time interaction with the MetaMask wallet. After that, you can just sit back and relax and Swing will handle everything under the hood like cross-chain transfer, contract interactions with Axelar GMP, and IBC transfer.
Special thanks to Aaron and Sam! The Swing Integration Proposal with Osmosis is live on the Commonwealth. Go there, share your feedback, and thoughts and as we take the proposal forward for voting on-chain, we would be looking forward to the support from all of you guys.
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