The Cross-Chain DEX in Cosmos Ecosystem
The Cosmos Ecosystem
Cosmos is not a single blockchain, rather it is an ecosystem of blockchain, or as it labeled itself, "The Internet of Blockchain". It has a different vision in contrast to Ethereum where all application is built on the Ethereum blockchain, the application within the Cosmos ecosystem is all encouraged to build on a separate blockchain, the so-called App-Chain. Hence, every Dapps could be a separate blockchain. Any particular blockchain could also grow its ecosystem rather than only focus on one single application, Terra has already grown itself as a successful layer 1 blockchain where many various Dapps developed on it.
Below is the map showing various blockchains which have the IBC (Inter-Blockchain Communication protocol) enabled in the Cosmos ecosystem. Through IBC, the different blockchains could communicate with each other and hence transact with each other.
With different blockchains within the Cosmos ecosystem comes with the need for the cross-chain transaction of tokens which native to each particular app-chain. The Cosmos ecosystem cross-chain decentralized exchange has already come to us.
Cosmos Cross-Chain DEX
There are currently four major cross-chain DEXes on Cosmos, below is a table summarizing which chain they are built on and some basic information.
And basic DEX metric as below:
Osmosis DEX is currently the largest cross-chain AMM DEX in Cosmos Ecosystem with total liquidity of around $1.16B. TVL according to Defi Llama is also around $1.16B. (The TVL figure on Defi Llama does not include the staked amount of native token OSMO, this results in a TVL amount equal to the total liquidity amount).
Osmosis is a separate Proof of Stake blockchain with its own native token OSMO and is being used for staking for the consensus mechanism. Osmosis DEX also provides the usual liquidity mining incentive in OSMO for liquidity providers who provide liquidity to DEX's pool.
Osmosis DEX's LPs could bond their LP tokens in the protocol to receive the liquidity mining incentives with a longer bonding period that comes with a higher liquidity mining incentive.
Another interesting feature that is expected to be released is superfluid staking. This could allow OSMO holders who provide "OSMO-other" token liquidity to delegate their LP tokens to validators. This will enable them to earn liquidity mining rewards and the block-producing staking reward (as OSMO is the native token of a PoS blockchain) at the same time. This is a good example of the edge an app chain could have. The base blockchain could be fine-tuned for the protocol built on it, thus the OSMO in liquidity provider shares can also be part of the staking system, the Osmosis chain can keep track of assets doing double duty in securing the network and boosting liquidity in the DEX.
In addition to the above, Osmosis is also working on the integration of wormhole bridge & Gravity bridge to connect with other major blockchains such as Ethereum and Solona.
Osmosis is developed by a team of developers with long experience in Cosmos, with Sunny Aggarwal who was the former lead researcher at Tendermint, Josh Lee who was involved in the building Cosmos wallet – Keplr Wallet.
All other current cross-chain DEXes have a far smaller scale compared to Osmosis. However, one notable competitor could be the Gravity DEX due to its special status as developed directly by the Cosmos development team and is being built on Cosmos Hub, which has the most channels connected to other blockchains in the Cosmos Ecosystem.
The DEX does not have its own token, instead, it uses ATOM as the base token for the transaction fee. The DEX does not have its own frontend as well, it uses Emeris, a cross-chain portal for Dapps developed by Tendermint. Gravity DEX can be thought of as one of the efforts that Tendermint team is making to grant value to ATOM, which has long been criticized for its poor value accruing.
While Gravity DEX shall benefit from the status of Cosmos Hub, the center of Cosmos ecosystem with the most blockchains connected, the scale of the DEX is far smaller than Osmosis. One reason could be that there are currently no liquidity mining incentives for LPs on Gravity DEX, which is due to ATOM being used as the DEX token which has made it more complicated how to distribute ATOM for liquidity mining purposes.
SifChain & Coinswap
Sifchain is a blockchain built with the Cosmos SDK and the only Dapps running on it is the IBC-enabled cross-chain DEX. One bright feature is it has a self-developed bridge connecting Ethereum. The native token of SifChain is ROWAN.
The team behind this project is from major Web 2 companies and cryptocurrency exchange, and the engineering team includes developers from Thorchain, Cosmos, and Polkadot according to their official website.
Coinswap is a cross-chain DEX built on IRISnet, a blockchain built on Cosmos SDK. The project is developed by a Chinese company called Bianjie.AI together with Tendermint. It currently has very limited liquidity and token pairs available to trade.