- Osmosis DAO will cast a vote in support of Nomic’s latest revenue share proposal, which calls for the adoption of a fee-free bitcoin bridge.
- The change, if authorized, would allow bitcoin to flow more freely throughout the Cosmos ecosystem, possibly drawing in additional liquidity.
Osmotic Adopting a fee-free bitcoin bridge using the decentralized bridging protocol Nomic is scheduled to be voted on by the community that oversees the appchain Osmosis and the Cosmos-based decentralized exchange, DAO.
Voting is scheduled to conclude at 7 p.m. ET, with 91.7% of votes now in support of the proposition and 46.4% of voters present. Thus far, just 1.2% of voters have opposed the proposal, and 7.1% have abstained. If accepted, the update would allow bitcoin to enter the Cosmos ecosystem more easily for DeFi-related purposes.
The plan replaces the existing bridging expenses with a new protocol revenue-sharing agreement between Nomic and Osmosis, with the goal of increasing bitcoin liquidity on the platform.
At the moment, Nomic permits users to send bitcoin directly to Osmosis, which will then be converted into the bitcoin-backed asset nBTC. The maximum amount that can be sent is 21 BTC, and there are 1% and 0.5% transfer fees.
The plan would eliminate bitcoin bridging fees for transactions that start or end on Osmosis. To offset transaction costs, withdrawals to Bitcoin might still be subject to a flat miner fee.
To incentivize its adoption on the chain, Nomic would earn a part of the taker fees from trading nBTC and its derivatives on Osmosis in return. According to the plan, Nomic would get a proportionate share of fees from trading using nBTC derivatives as well as 10% of all taker fees on nBTC-related trades made through Osmosis.
As a result, Osmosis customers may experience lower bitcoin transaction costs, which would allow them to incorporate bitcoin liquidity directly into the Osmosis ecosystem without having to pay extra bridging fees.
If both Nomic and Osmosis governance agree the mechanism, it will be put into effect via a future software upgrade and remain in place for the first six months, or until mutual governance action takes precedence.
If approved, this proposal would mark a critical turning point in DAO-to-DAO transactions. It offers bridges a new “rev share” economic model that is only made feasible by appchains. Sunny Aggarwal, a co-founder of Osmosis, posted in the Osmosis forum.
What do Nomic and Osmosis mean?
Created with the Cosmos software development kit, Osmosis is a stand-alone Layer 1 blockchain with automated market maker and decentralized exchange features. In terms of developer activity, it is said to be among the most vibrant ecosystems.
Based on DeFiLlama data, Osmosis is one of the biggest protocols in the Cosmos ecosystem, with a total value locked (deposited) on the chain of $124 million. With a $33.8 billion total trade volume over all chains, it is also ranked in the top 15 decentralized exchanges.
Nomic allows users to securely bridge bitcoin to blockchains that use Cosmos’ cross-chain message and bridge protocol, the inter-blockchain communication protocol (IBC), by building on developer Turbofish’s Orga, a bespoke high-performance blockchain application framework.
In October 2023, Nomic turned on its native Bitcoin (nBTC) interchain upgrade, opening the door for tokenized native bitcoin transfers inside the Cosmos ecosystem.
Users wishing to transfer bitcoin into the Cosmos Network using decentralized techniques had no choices prior to the release of the nBTC interchain update. Users had to transfer their bitcoin into other cryptocurrencies because there was no specific bridge protocol, which added another level of difficulty.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
