• 14 July, 2024

Cosmos’ Osmosis DEX Introduces New Stablecoin Trading Protocol

The Cosmos-based decentralized exchange (DEX) Osmosis has introduced a stableswap where users may buy and sell several stablecoins. This new function enables users to trade between many centralized stablecoins, including USDC, USDT, BUSD, and others not before available in the Cosmos ecosystem.

“We want to support multiple stablecoins in the Cosmos ecosystem — both larger centralized stablecoins (like USDC, USDT, BUSD), as well as some of the newer stablecoins in the Cosmos ecosystem,” Osmosis founder Sunny Agarwal, said in a statement.

Osmosis continue to expand

As with other stablecoin exchanges, the Osmosis stableswap leverages the “curve algorithm” to pool tokens so that traders may buy and sell large amounts of stablecoins with little to no effect on the price or value of the tokens itself. Osmosis, which manages $177 million in assets, is the largest Cosmos-based DEX in daily volume, as reported by DeFi total value (TVL) aggregator DeFiLlama (AuM).

The stableswap rollout is a part of Osmosis’ v13 update, which also included new functionalities such as the IBC rate capping and multi-hop discounts. According to a Medium article published by the DEX earlier this month, the stableswap allows Osmosis users to “create liquidity pools that are more optimized for pairs that are intended to be tightly correlated.”

Stableswap also introduces another useful feature in the form of configurable scaling factors for assets with price ratios other than the standard 1:1. As pointed out by the firm, having this ability to fine-tune can be helpful for a wide variety of assets, including staking derivatives and leveraged assets.

Besides trading stablecoins, Osmosis also offers the trading of quasi-pegged assets such as liquid staking derivatives in conjunction with their respective native assets. For instance, the ATOM/stATOM pool is for trading the staked ATOM (stATOM) token that is issued by Cosmos‘ native asset ATOM.

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