Osmosis is a DEX based on the AMM mechanism and an independent Layer1 application chain built using the Cosmos SDK. It is the first DEX application chain in the Cosmos ecosystem to access IBC cross-chain communication. Osmosis operates similarly to other AMM DEXs, with liquidity providers depositing liquidity into liquidity pools and traders interacting directly with the liquidity pools. $OSMO is the native token of Osmosis. It is used as a token to maintain the security of the PoS network and is also used as Gas.
Since the Osmosis application is built on the application chain and is a DEX application and an independent blockchain, the security of Osmosis as a blockchain is generally lower than that of other public blockchains. For this purpose, Osmosis designed the Superfluid pledge mechanism. This mechanism allows liquidity providers to add the native token $OSMO to the Osmosis AMM liquidity pool. The LP token obtained by $OSMO can then be used as a pledge token to maintain the Osmosis PoS blockchain network. safety. LPs can earn additional staking rewards in addition to transaction fee income, and the Osmosis network will also benefit from additional security.
Osmosis is also working on solving the MEV problem and has jointly developed a front-threshold encryption scheme called Ferveo with Anoma. Simply put, in the blockchain architecture, since all transactions are public in Mempool, validators can arrange the order of transactions within their blocks to make profits when blocks are produced. The Ferveo encryption scheme can hide the transaction details from the verifier when the transaction enters the memory pool, preventing the verifier from viewing the transaction content and arranging the transaction sequence in advance. Only after the transaction is executed and a block is generated, the verifier can view the details of the transaction. The Ferveo encryption solution is not yet live, and the Osmosis team plans to bring it to Osmosis through multiple updates in the coming months