Cosmos-based decentralized exchange Osmosis and lending protocol UX Chain have unveiled a merger proposal that could reshape the Cosmos DeFi landscape. If approved, this consolidation would see the integration of UX Chain’s lending logic and algorithms with Osmosis’ decentralized exchange (DEX), creating a comprehensive DeFi hub.
Integration of codebase: A pivotal first step
The collaborative merger proposal, crafted by contributors from both Osmosis and UX Chain, lays out a strategic roadmap for this transformative union. The process will kick off with the integration of UX Chain’s codebase onto the Osmosis Chain, a move aimed at harnessing the combined capabilities of both platforms.
An immediate outcome of this initial step would be the pooling of shared total value locked (TVL) across the two networks. Notably, during this phase, Osmosis’ native token and UX Chain’s token will continue to trade separately.
Subsequently, the merger proposal leaves the door open for a potential token unification step, which could involve a token swap or migration. The specifics of this token consolidation will be determined through community governance. It is essential to highlight that each blockchain network will hold separate governance votes, managing the processes independently while striving for consensus on the ultimate goal of establishing a robust DeFi hub.
Brent Xu, co-founder of UX Chain, emphasized, “Each chain will have a separate governance vote from each blockchain network. The community governance will manage the processes separately for each network toward achieving consensus around the end goal of creating the DeFi hub.”
Unlocking synergies: Security and advanced features
This proposed merger also seeks to enhance Osmosis’ mesh security, the network’s ability to secure other blockchain projects, by potentially capitalizing on the combined expertise or merging validator sets from both networks.
Collaboratively, UX Chain and Osmosis aim to explore opportunities for developing advanced liquidations, native margin trading, and MEV (Miner Extractable Value) markets.
Osmosis co-founder Sunny Aggarwal expressed enthusiasm about the merger proposal, stating, “This proposal to merge the Umee UX DeFi experience into the Osmosis chain would enable some really powerful new features and functionalities for our users — and we’re excited to continue our collaboration with UX Chain with what the community decides is best.”
A look at past fundraising success
Both Osmosis and UX Chain have notched impressive fundraising achievements in the past. UX Chain, formerly known as Umee, raised a substantial $32 million through a CoinList coin offering in 2021, preceded by a $6.3 million seed round led by Polychain Capital. In the same year, Osmosis secured $21 million in a token sale round, with Paradigm taking the lead among investors.
The merger proposal comes at a time when the Cosmos ecosystem is witnessing increasing collaboration and innovation, underlining the dynamic nature of the DeFi space. With significant financial backing and a shared vision for a robust DeFi hub, Osmosis and UX Chain’s merger proposal presents an exciting opportunity for both their communities and the broader crypto industry.