Osmosis, a decentralized exchange, aims to improve the efficiency of cross-chain transactions with upgrades | coindesk JAPAN | Coindesk Japan

Cosmos-based decentralized exchange (DEX) Osmosis announced on Jan. 18 in line with its broader plans to expand product integration and make cross-chain trading profitable for traders. , announced an upgrade to v14.0.0 called “Neon”.

Scheduled to take place on January 23rd at 16:00 UTC at block height 7937500, this upgrade contains a lot of important and useful content.

One of the key features of the upgrade is the implementation of geometric TWAP (Time Weighted Average Pricing) in the Osmosis liquidity pool. In the financial world, TWAP refers to the average price of an asset over a specified period of time. The TWAP strategy, like Binance, is often used to minimize the impact of large orders on the market by distributing large orders into smaller ones and executing them at regular intervals. .

The above will allow protocols built on Osmosis to choose between two pricing mechanisms associated with the protocol to provide “centralized liquidity” to users. This is a design to improve capital efficiency using DEX and improve liquidity pool (LP) rewards.

Liquidity pools are tokens supplied by users to a DEX that incentivize them to become liquidity providers in exchange for a share of transaction fees or free tokens.

The upgrade will also make pricing more efficient and help stop liquidity attacks that use upward price manipulation. In the past, malicious actors have obtained $100 million from DEXs through such manipulations.

In addition, “Neon” introduces a downtime detection module to detect if the Osmosis network is up and running, preventing improper liquidation in other lending protocols that rely on Osmosis price data.

The developers of Osmosis said it was important to roll out this upgrade quickly to pave the way for integration with the Mars Protocol, a credit and borrowing marketplace.

Until the upgrade is complete, users will not be able to use Osmosis, nor will they be able to use the staking and governance features.

Osmosis’ native token, OSMO, has fallen 3% over the past 24 hours, in line with the overall market decline. Assets under custody (TVL) for the protocol is currently at $160 million, down 90% from its 2022 peak of $1.6 billion.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: Shutterstock
｜Original: Cosmos DEX Osmosis to Make Cross-Chain Trades More Efficient With Neon Upgrade