[PROPOSAL][DRAFT] Merge (FULL or PARTIAL) Cosmos Hub and Osmosis Networks

Hub Proposals
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This thread is meant solicit high-level ideas for a possible merger, fully or partially, increased collaboration, and to escalate any major barriers or concerns with merging chains, resources, etc. All options are on the table!

This is a pre-signalling draft proposal to gauge interest and feedback on possible increased collaborations between $ATOM and $OSMO. A mirrored proposal should go up by an Osmosis member on the Osmosis forum to develop more impactful discussions.

1. Executive Summary

This proposal outlines the possible benefits and strategy for merging Cosmos Hub and Osmosis, fully or partially, into a unified blockchain ecosystem under $ATOM. The goal of this potential merger would be to leverage synergies and create a more robust and scalable infrastructure that serves both ecosystems, their respective communities and the interchain as a whole more effectively.

2. Introduction

Cosmos Hub and Osmosis are two prominent projects within the Cosmos ecosystem. Cosmos Hub, as the original chain of the Cosmos Network, provides security and liquidity for the Cosmos Ecosystem, most recently through the release of Interchain Security (v2). Osmosis, on the other hand, is a leading decentralized exchange (DEX) that specializes in automated market-making (AMM) within the Cosmos ecosystem. Increased collaboration, through merging, either fully or partially, offers a unique value-add opportunity to integrate their strengths, optimize resource allocation, and enhance their collective impact within the crypto industry.

3. Objectives of Increased Collaboration

**(FLEXIBLE)

  1. Enhanced Interoperability: Leverage Cosmos Hub’s security and interchain capabilities with Osmosis’ DEX functionalities to create a more integrated and seamless experience for users and developers
  2. Unified Ecosystem: Consolidate the ecosystem to reduce fragmentation, simplify and unify user interactions
  3. Increased Efficiency: Optimize resource utilization, reduce operational costs, and enhance the overall scalability of the unified platform.
  4. Growth and Innovation: Foster a more robust environment for innovation and growth by combining the development capabilities and community support of both Cosmos Hub and Osmosis.

4. Some Benefits of Increased Collaboration

(FLEXIBLE)

  • Scalability: Integrating Osmosis’ AMM capabilities with Cosmos Hub’s infrastructure can significantly boost scalability and transaction throughput.
  • Improved Liquidity: Allow Osmosis to tap into ATOM deep liquidity for their applications
  • Enhanced User Experience: Users will benefit from a more seamless experience
  • Reduce Fragmentation: The merger will enable more cohesive vision, reducing fragmentation and aligning interests across the ecosystem.
  • Innovation Opportunities: Combining development teams and resources can lead to accelerated innovation and the introduction of new features and services.

5. Proposed Strategy

(FLEXIBLE)

  1. Due Diligence: Conduct a comprehensive review of both platforms’ technical, financial, and operational aspects to identify potential challenges and opportunities.
  2. Integration Plan: Develop a detailed integration plan outlining the technical, operational, and governance aspects of the merger. This includes aligning protocol upgrades, combining liquidity pools, and establishing unified governance structures.
  3. Technical Integration: Implement the necessary technical changes to merge the platforms, including updates to the blockchain protocols, smart contracts, and user interfaces.
  4. Governance Transition: Define and execute a clear transition plan for governance, ensuring a smooth handover and continued stability of the unified platform.
  5. Marketing and Communication: Develop a marketing and communication strategy to announce the increased collaboration highlight its benefits, and provide clear guidance on how users can transition and engage with the new platform.

6. Risk Assessment and Mitigation

(ADD TO THIS)

  • Technical Risks: Address potential technical issues through rigorous testing and phased rollouts.
  • Community Resistance: Manage resistance by ensuring transparent communication and involving key stakeholders in the decision-making process.
  • Operational Challenges: Mitigate operational challenges by setting up dedicated teams to handle integration tasks and support post-merger activities.

7. Conclusion

The merger, full or partial, of Cosmos Hub and Osmosis represents a strategic opportunity to create a more integrated, efficient, and innovative blockchain ecosystem. By combining the strengths of both platforms, we can unlock new potentials and deliver enhanced value to our users and the broader blockchain community.

8. Call to Action

We invite the communities of Cosmos Hub and Osmosis to engage in discussions regarding this proposal, participate in governance processes, and support the potential merger to realize the shared vision of a unified and thriving Cosmos.

You can also join the ongoing telegram discussion taking place here: Telegram: Contact @atomOGchat

Edit: Sunny has shown preliminary interest in this idea communicated via the above-linked telegram chat. This is just one snippet of a larger conversation

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Thank you Paul for taking the initiative to the forum.

I am a huge proponent of this movement. In my role as retail, community member of both projects and governance participant in the wider IBC ecosystem.

For me personally, I believe the two OG cosmos communities can ignite a new cosmos hype in crypto.

The best Dex, the best launchpad, rich liquidity, most amazing tech and product talent. All this in one place.

We can make this fundamental change real. Let us choose greatness first and solve the details in a next step.

Thor might be coming, but we have it in our own hands to stride towards a bright future.

ONE TRUE HUB

5 Likes
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Work in progress:

Into for proposal

In an effort to enhance interoperability, streamline operations, and solidify the Cosmos ecosystem, we propose a strategic merger between Osmosis and the Cosmos Hub. This merger will be executed through a phased approach, focusing on the convergence of tokens, chain mechanics, core development, and the broader ecosystem. The goal is to leverage the strengths of both chains and create a unified platform that maximizes efficiency, security, and liquidity provision while supporting innovation within the Interchain ecosystem.

• Why do it?

The merger between Osmosis and Cosmos Hub represents a significant step forward in unifying the broader Cosmos ecosystem. By combining resources, development teams, and liquidity provisioning capabilities, we will create a more robust and efficient platform that drives long-term value for all stakeholders involved.

Making the interchain dex Vision a reality and the economic might of ATOM is what will help accelerate Osmosis into this. The DEX needs liquidity for BTC, and we think doing stuff with ATOM pairing is how we can make that happen. Similar to how RUNE does the Savers.

• How to set up the props?
First proposal is on the Cosmos Hub, to “extend the offer”, then on Osmosis to “accept the offer”.

•merger(swap details)

Smart Contract Mechanism: The swap will be facilitated by a smart contract where users deposit OSMO and receive ATOM in return. The swap process will be transparent, auditable, and governed by on-chain smart contracts.

Conversion rate, premium for longer lockup?

Smart contract, you put osmo in and get atom out. Fixed price 12month average + 50% premium. 3 months period for a swap.

• token merge mechanics

What happens to unissued osmo?

• Chain merge mechanics?

Phase 1: Osmosis as a Token-Less ICS Chain
To begin the chain consolidation, Osmosis will initially transform into a token-less Interchain Security (ICS) chain under the Cosmos Hub’s security umbrella. Osmosis will continue to function as the core hub for liquidity provisioning, AMM, and other decentralized applications (dApps). However, the staking mechanism and governance will be transferred to the Cosmos Hub, with ATOM becoming the sole staking token.

Phrase 2: The slightly tricker mechanism is to figure out how to merge the states of Cosmos Hub and Osmosis chains into one. Will be challenging, but I think doable

•osmosis team becomes core dev team

•informal and hydra ship their ends

•bringing other networks and providing liquidity

•merging CPs

8 Likes
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Thank you for raising this proposal. The idea of a merge is exciting but, respectfully, this proposal is a lot of words but doesn’t really say anything.

Neither the Hub nor Osmosis should be expected to make a governance commitment until there’s an actual, concrete plan presented to them. If this merger effort is serious, then it should be unrushed, as there probably won’t be a second chance at this.

From @agent.kwosh 's reply it looks like some actionable items are being proposed already. I’d propose that folks working on this continue to use this forum post to provide ongoing updates on implementation ideas where they can get feedback from the community (and the same can be done on Osmosis’s forums).

As someone who has been involved in Osmosis’s community for a bit, i’d also suggest strongly considering the following:

  1. Governance- This is probably the most important aspect of the merger, even moreso than any monetary premium. Hub governance is far too slow as it is currently to be the canonical way by which to govern Osmosis. I’ve always envisioned Hub gov as being kind of like the US 3 branches of government" system. The system is designed to be slow because it keeps massive change to a minimum. Osmosis, on the other hand, averages 3-5 gov proposals a week, and can’t iterate quickly enough on a 14 day discussion + 14 day vote period to remain a viable product. Osmosis will either need to be on a separate voting period, separate voting token, or the Hub’s voting period will need to be reduced. The Hub and its stakers / validators should also consider whether they’re ready for that volume of governance proposals.

  2. Conversion Mechanism - Swapping OSMO for ATOM using a time-locked premium mechanism seems interesting! I wouldn’t be opposed to a vesting period on ATOM offered at a premium (though I think it’s likely some will), but there are a few caveats to this. First, any vesting tokens should be stakeable. Going from liquid and stakeable tokens to vesting tokens over as long as a year will incur significant opportunity cost that will already eat away at a huge chunk of any premium. Second, there are a number of tokens that will need to remain liquid under this mechanism. Some good examples of this are OSMO tokens in Osmosis LPs (how we’ll manage these is going to be incredibly difficult anyway) and the Osmosis Grants Program wallet, which has outstanding commitments that need to be paid (this is true even if the OGP is wound down as part of this proposal. It’d be cool to maybe see OGP duties and treasury transferred over to the AADAO if this passes, but even then these ATOMs will need to remain liquid so that the AADAO can execute on the OGP’s outstanding commitments).

  3. Incentives - Osmosis has been greatly paring down on the use of incentives lately, but isn’t quite to the point of eliminating them completely. It’s very possible that some allocation of ATOM will need to be set aside for incentivizing LPs into the future until revenue is sufficient to incentivize growth of liqudity. It’d be a shame to merge the Hub with Osmosis just to see Osmosis go the way of Gravity Dex.

I’m sure there’s more that will come up over time as this discussion continues. I think it’s going to be a pretty uphill battle to get this over the line, especially considering the OSMO to ATOM conversion (more for tokens in LPs and smart contracts than the tokenholder swap portion). Will be interesting to see how this discussion evolves with time.

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I agree with the friction points you’ve touched on and would propose that instead of a governance and/or architecture merge, what users really want is a more seamless user experience across Cosmos Hub consumer chain applications and Osmosis, and additional use cases/value propositions that leverage both of these juggernauts. Both of those things can be done without upending how each conducts governance and day-to-day business, and for far less cost.

Some initial ideas are paying the same front-end developers to build out UIs and a seamless UX across the two Hubs, incentivizing liquidity pools on multiple DEXes including Osmosis, and in general tweaking some UX pathways to make it more natural to navigate between applications. I understand these things seem small and not particularly noteworthy on their own, so maybe we just bundle up a lot of these small proposals into one big one that triggers more enthusiasm and interest from retail investors.

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Thanks, Robo. Have made some slight adjustments to the thread title and OP based off some of your suggestions, to ensure a sentiment of flexibility and openness to all forms of collaboration.

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Unfortunately, this should be a straightforward “No” from the broader community.

Though an exciting idea, this proposal aims to establish an entirely new organization, rather than working to improve the existing one.

Instead of overcomplicating Cosmos Hub away from staying as minimal as possible, a counter, more flexible solution would be to utilize ICS2B down the road. A win/win scenario, for both ATOM and OSMO, where ICS2 protocols are entirely managed by the logic of the other chain, i.e. Osmosis (emphasis on win/win).

By combining the strengths of both platforms, we can collectively continue to unlock new potential for both sovereign communities, all the while delivering enhanced value back to our users and the broader blockchain community.

Looking forward to see how this discussion progresses.

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I don’t believe that the OSMO validators would vote in favor of this, or even onboarding as a consumer chain. There is little reason to vote themselves out of relevance and profit.

Love the idea though and are 100% in favor of it.

What about keeping the Hub minimal? How would a merger affect transaction times and costs?

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I am mainly and firstly interested what the point of view is regarding the sentiment towards the projects and the parties leading it. I don’t see much controversy around the Osmosis team, while the ICF receives a huge lot of backlash. Why would the Osmosis team even be willing to merge and get all the negativity with it, when they can also run without?

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Thanks for taking the time to participate in governance and draft this proposal. Opinions are my own here (as I work for Stakecito that validates both Cosmos and Osmosis, and I’m also a protocol fee controller for Osmosis).

A few questions come to mind for me.

  1. Have you spoken with the Osmosis team to establish that this is something they would be keen on adding to their near term product roadmap? Osmosis is a sovereign chain with its own strategic goals and plans and so imo it’s not entirely fair to table a merger if there have not been preliminary discussions with them.

  2. I was reading about an Osmosis Cosmos merger on Twitter all day and was so confused as there was no information on this on the Osmosis forums. This literally impacts Osmosis in its entirety and so buy-in imo should first be from Osmosis the team, and then Osmosis the community. Finding the proposal on the Cosmos Hub was just weird.

  3. If there have been no discussions to determine team’s willingness to take this on, imo it’s way too early to make this a governance matter.

  4. I agree with Robo that this is a proposal with a lot of words but it actually does not say much. It also feels very surface level researched, and, not to throw shade - but I know ChatGPT when I see it.

  5. I personally feel that if such a proposal were to go up, it would need to be a lot more technical in scope, with more analysis into the benefits and risks to both Osmosis and the Hub and preferably by contributors to either of the 2. For example, I can see many ways in which this hurts Osmosis - @LeonoorsCryptoman has mentioned a few above.

  6. I recommend moving this from the proposals section and to a more general section of the forum. I also recommend bringing the discussion over to the Osmosis community, on the Osmosis forums.

I’m not against the idea by the way, currently, I have no opinion but slightly leaning towards no given my concerns above. Just questioning approach here.

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Thank you, Winfred. As you can see in my OP, I do mention that we should see a mirrored proposal on the osmosis forums to further more legitimate discussions. That being said, Sunny is engaged and has shown preliminary interest in a merger. You can see these conversations openly in the telegram chat linked in the OP that happened yesterday. I wanted to keep the momentum going so pushed out a rough wireframe, though am iterating constantly based on feedback.

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Aaaah thanks I usually avoid clicking on links.
Would probably help a lot to screenshot that conversation and add it in the OP.

With that said, showing interest is different from “we’ve got the bandwidth and want to prioritize this in our roadmap”. I see where you’re coming from though, re: momentum.

I personally would like to see more analysis before I can form an opinion. I feel like this is exciting at face value, but it comes with so many implications and so far a lot of the Osmosis folks I know who’ve been around a long time are not very pro this idea in its current state :slight_smile:

The main supporters are ATOM folks.

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Added one screenshot as reference, though to get the full sentiment, would urge joining in the telegram discussion.

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the main supporters of osmo are atom folks :slight_smile:

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Hmmm there’s def an intersection, but there’s also just osmo folks.
To be clear, I’m in that intersection.

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The idea of a Cosmos and Osmosis merger has been circulating within the community, especially following the discussions around the Stride acquisition proposals. Given the complexity and sensitivity of such initiatives, as evidenced by the evolution of the Stride proposal, it’s crucial that we approach this potential merger with careful consideration, particularly focusing on the technical and strategic aspects.

In my view, a full merger may not be the most effective approach due to the significant differences between the two projects. Cosmos and Osmosis operate under distinct foundations with different teams, cultures, and development philosophies. Osmosis has consistently demonstrated a fast-paced, innovation-driven approach, while Cosmos, despite its strengths, has faced its share of controversies and challenges.

Given these differences, a partial acquisition or a focused strategic collaboration seems like the most viable solution. This would allow both ecosystems to maintain their unique strengths while benefiting from shared resources and closer integration where it makes the most sense. Merging the foundations entirely could hinder progress by creating friction and diluting the focus of each team. Instead, by pursuing a more measured approach, we can ensure that both Cosmos and Osmosis continue to thrive while leveraging synergies in a way that supports the broader vision of the Cosmos ecosystem.

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Hi everyone!

Thank you @PaulEdward and guys at Osmosis TG.Love your brains.

I do have some questions though.
What would become after full merge? As those two are like night and day. Osmosis still working on a DEX would somehow become controversial. Wasn’t in 2021 Gravity DEX the DEX on Cosmos Hub and it has already shown then that ATOM inflation for farming is a potential threat to other DEXs within Cosmos eco. Maybe it could be done I am not saying it could not, but I really like what Osmosis is doing on its own. I am one of those crazy retailers that actually belives in tech😉

I also agree with @RoboMcGobo about governance potential merging problem. I think it would have to adapt towards Osmosis governance model that needs quicker solutions.

And finally the tokenomics after merge. How would this play out?

Although I somehow like the idea, at this time I am more in favour of them staying on their own or some partial merge that would benefit both. Imho we need more different projects to push eco forward. I somehow always hope to see our eco as Internet of blockchains where Hub is neutral towards other aplications but helps them on their way.

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en ce qui concerne la gouvernance, mon opinion est que c’est un faux sujet. Nous arrivons bien a porter des mises a jour du hub sous 7 jours tandis que les certaines restent sur 14j. Nous pourrions tres bien convenir dun delais plus court en ce qui concerne le logiciel osmosis

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I just want to say that I will never ever never ever ever ever ever never never never never never never never never accept a discounted price on my osmo for atom.

1.5x minimum, full liquidity demanded

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Interesting.

I think the only possible solution is Osmo to join the HUB as an ICS chain. Osmo should keep the governance sovereignty.

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