Osmosis is a decentralized exchange (DEX) built on the Cosmos blockchain. It aims to provide liquidity for tokens in the Cosmos ecosystem through automated market-making. The platform allows users to create and trade on pools of digital assets. Osmosis was founded by Sunny Aggarwal and has been developed by the Interchain Foundation. It was launched in 2021 as a part of the Cosmos ecosystem. The name "Osmosis" comes from the idea of assets flowing between different blockchain ecosystems.
Osmosis, a decentralized exchange (DEX) built on the Cosmos network, offers several benefits compared to its direct competitors in the DEX space. One key advantage is its focus on enabling the trading of highly illiquid assets, such as non-fungible tokens (NFTs) and liquidity staked tokens (LSTs). This sets it apart from other DEXs that primarily cater to more liquid assets like cryptocurrencies.
Another benefit of using Osmosis is its emphasis on providing a higher level of capital efficiency. The protocol utilizes a unique automated market maker (AMM) mechanism called "Bancor Curve" that aims to optimize capital utilization and reduce impermanent loss. This can be particularly appealing for liquidity providers looking to maximize their yield.
Additionally, Osmosis boasts greater composability with other Cosmos ecosystem projects. Interoperability within the Cosmos network allows for seamless integration and collaboration with other blockchain applications, enhancing overall ecosystem development.
Furthermore, Osmosis provides a user-friendly interface and a simplified user experience, making it more accessible to newcomers in the decentralized finance (DeFi) space.
While there are other DEXs available, such as Uniswap, SushiSwap, and PancakeSwap, Osmosis offers a unique value proposition by catering to illiquid assets, prioritizing capital efficiency, promoting interoperability, and providing a user-friendly experience. However, it is important for users to carefully consider their specific needs and preferences before deciding which DEX to utilize.
Osmosis is a decentralized exchange (DEX) built on the Cosmos blockchain. It leverages the Inter-Blockchain Communication (IBC) protocol to enable cross-chain swaps and liquidity provision.
At its core, Osmosis utilizes automated market makers (AMMs) to facilitate trades. These AMMs are powered by a concept called liquidity pools, which are pools of tokens that users contribute to. The pools are created based on the available token pairs, and users can add or remove liquidity from these pools.
When a user wants to swap one token for another on Osmosis, they interact with the liquidity pools. The swap price is determined based on the ratio of tokens in the pool and follows a formula known as the constant product formula. The user provides the input token, and based on the pool's liquidity and the formula, they receive the output token.
Osmosis operates on the Cosmos blockchain, a scalable and interoperable blockchain network. By utilizing the IBC protocol, Osmosis can communicate and interact with other compatible blockchains, allowing for cross-chain interoperability. This enables users to access a wide range of tokens from different blockchains and trade them seamlessly on Osmosis.
Overall, Osmosis leverages the power of decentralized technology, liquidity pools, and the Cosmos blockchain to provide users with a decentralized exchange that offers cross-chain swaps and liquidity provision capabilities.
DIA adopts a comprehensive approach to fetching trade data from various exchanges, including both decentralized finance (DeFi) and non-fungible token (NFT) exchanges. The process varies depending on the type of exchange in question.
For centralized exchanges like Coinbase, Kraken, and Binance, DIA utilizes scrapers that directly collect trades from exchange databases using REST APIs or WebSocket APIs. The data collection frequency ranges from 1 to 7 seconds, depending on the exchange. This approach allows DIA to obtain real-time trade data with high precision.
In the case of decentralized exchanges, DIA retrieves data from various blockchains by subscribing to swap events in liquidity pools. This means that DIA fetches trading data directly from the blockchain itself, ensuring enhanced accuracy and reliability. Examples of decentralized exchange sources include Uniswap, curve.finance, and PancakeSwap.
When it comes to NFT marketplaces, DIA captures live trading data by retrieving information from integrated marketplaces' smart contracts. This process occurs with a retrieval period ranging from 20 seconds to 1 minute, covering all real-time NFT transactions. By focusing on integrated marketplaces, DIA avoids relying on potentially unreliable bids and offers data. Notable NFT integrated exchange sources include Blur, X2Y2, OpenSea, and TofuNFT.
Overall, DIA's approach to fetching trade data involves leveraging a combination of rest APIs, WebSocket APIs, and direct blockchain interaction, depending on the nature of the exchange. This comprehensive strategy ensures highly accurate and customizable price feeds for users.
DIA has a specific process for computing trade data from Osmosis in order to build price feed oracles. The process differs depending on whether we are referring to a DeFi exchange or an NFT collection.
For DeFi exchanges, the first step in DIA's process is data cleaning and outlier detection. This is important to ensure that the price estimation is resilient against trades with prices that deviate from the current market price. DIA uses an Interquartile Range (IR) filter to exclude data points and sets that fall outside an acceptable range relative to the interquartile range. Only trades that fall into the middle quartiles are considered for further processing.
After the cleaning process, DIA applies price determination methodologies to calculate the final price. One example is the Volume Weighted Average Price (VWAP) methodology, which takes into account the different volumes of trades. All trades from the queried time range are weighted by their volume to arrive at a single price value for each asset. DIA also offers other filters like Moving Average with Interquartile Range Filter (MAIR) that provide different ways of calculating the final price.
On the other hand, for NFT collections, the process is different. DIA determines the floor price of an NFT collection by processing the retrieved on-chain trade data in two steps. First, the data goes through cleansing filters to exclude market outliers and manipulation techniques. Then, a pricing methodology is applied to determine the final price point.
One of the methodologies offered by DIA for NFT collections is the Floor Price methodology, which provides the lowest sale price recorded on the blockchain during a given time window. However, DIA recognizes that this simple mechanism is susceptible to manipulation techniques like wash trading and sweeping the floor. To address this, DIA offers advanced methodologies like Moving Average of Floor Price, which calculates the moving average of a collection's floor price, and applies an interquartile range outlier detection filter.
Overall, DIA uses a combination of data cleaning, outlier detection, and specific pricing methodologies to compute trade data from Osmosis and build price feed oracles for both DeFi exchanges and NFT collections.
Instead of distributing pre-calculated data feeds, DIA covers the whole data journey from individual trade collection, and computation to the last mile of the feed delivery.