The Ultimate Yield Farming Guide For Osmosis

Osmosis is one of the most popular projects around at the moment.

According to DefiLlama’s table of Total Value Locked (TVL), Osmosis is now on 52nd place across chains with a TVL over $197 million and is one of a handful of projects that is riding the wave of interest that surrounds the Cosmos interoperability ecosystem.

That’s why we’ve written this ultimate guide, so you can find out all you need to know about the project and its technology, as well as the bridges, wallets, and yield farming opportunities that exist on Osmosis.

Check out our video on How To Yield Farm on Osmosis! 👇

For the best explanation of what Osmosis is, a good place to start is the project’s official documentation, which states:

“Osmosis is an advanced automated market maker (AMM) protocol that allows developers to build customized AMMs with sovereign liquidity pools. Built using the Cosmos SDK, Osmosis utilizes Inter-Blockchain Communication (IBC) to enable cross-chain transactions.”

Osmosis was founded in 2021 by Sunny Aggarwal and Josh Lee. Sunny previously worked with Cosmos as a Research Scientist at Tendermint, the company behind the open-source software on which the Cosmos ecosystem is built. In October 2021, Osmosis raised $21 million dollars in a token sale led by Paradigm, the crypto venture capital firm.

As mentioned earlier, Osmosis is one of the projects benefiting from the increased interest in Cosmos and its ‘Internet of Blockchains’ concept. Essentially, the big idea behind Cosmos is to produce a consistent development and messaging framework called the Inter-Blockchain Communication (IBC) Protocol, which allows developers to build interoperable blockchains.

Each blockchain has its own specific functions and benefits, related to its target user group. In the case of Osmosis, the aim is to act as the main AMM between Cosmos-based blockchains. However, more than this, Osmosis aims to extend the use of AMMs beyond common token swap use cases.

“Our belief is that the design space of AMMs is still massively underexplored…we can expand them into automated algorithms for things we might not even think of today as market-making.” — Sunny Aggarwal, Founder of Osmosis

In terms of the specific features that Osmosis offers, some of the most important ones are:

Liquidity pools are self-governing and completely customizable through governance.

All key parameters are customizable, including swap fees, token weight, curve algorithm and time-weighted-average price (TWAP) calculations. Nothing in the Osmosis AMM is hard-coded, so liquidity providers can vote to change any pool parameter, including swap fees, token rates, reward incentives and curve algorithms.

New curves can also be easily created in the blink of an eye. This is important because it removes the need to create a new AMM if the model changes. Developers can simply deploy new curves and take advantage of the already existing liquidity in the ecosystem.

This unique functionality could enable…