New Innovation On Liquidity Providing And The Benefits Of Cosmos Network

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    joseph23

    Published on Apr 17, 2022
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    When I remember how Defi started and compare the early days of Defi to what we have today, I would say that there is a great future for Defi. The concept of providing liquidity on decentralized exchanges is a joy to many crypto investors due to the huge rewards it bestows. Delegating your tokens to validators was more of a joy to people like me compared to providing liquidity because we do not need to worry about impermanent loss and the APR is quite juicy.

    The opportunities available through Decentralized finance are available in all the existing Blockchains such as Ethereum, Polygon, Binance Smart Chain, etc. To compete well in the Defi market, some of these Blockchains brought innovations to their services, for example, DFYN, a dex on Polygon network introduced dual rewards, such that when you provide liquidity with two tokens, instead of earning the governance token or one of the tokens, you will earn the two tokens. The cosmos network introduced the strategy of rewarding LP stakers and delegates on the network with an airdrop of new project tokens. The Ethereum network adopted a huge APR to combat the gas fee issues. In general, the struggle for survival is still on.

    Today, I want to share some of the features on the Cosmos network which make it a good place for your Defi activities.
    A few of us may be aware that Osmosis, the first Automatic Market Maker on Cosmos has introduced superfluid staking. It was indeed an innovation that will help LP providers maximize their rewards. When we provide liquidity on exchanges, we earn from transaction fees, pool rewards, etc. For the POS mechanism of consensus where the blockchain is secured by validators through stakes, it is beneficial for more tokens to be with validators than on DEXes. This is why Osmosis Dex introduced the Superfluid Staking which operates by staking 50% of one of the tokens to a validator. For example, if you have 50 Osmo and its ATOM equivalent on pool 1 on Osmosis Dex, 25 Osmo will be in the pool, and the other 25 Osmo is staked with a validator. This helps to secure the Osmo network more compared to when the 50 osmo is on Dex.

    Presently, there are plans to introduce interfluid staking which works similar to Superfluid Staking but this time, it will be for the other pair. This means that both Osmo and Atom in the OSMO/ATOM pool will have 50% on the Dex and 50% with a validator. Isn't it beautiful?. This is only seen on the Cosmos network, perhaps because its consensus method is POS. Many Defi investors that are farming on the Cosmos network can attest that the opportunities and rewards there are much. NFT projects are also trooping in there. We already have the likes of Stargaze and Asset Mantle, and more are on the way.

    So back to the title of the post, Why should you join the cosmos network?

    Enjoy amazing APR when you provide liquidity on some of the DEXes on the cosmos network and maximize the reward when you are using Osmosis Dex through Superfluid Staking and the forthcoming interfluid staking.

    Enjoy A considerable High APR up to 300% for staking a single token with a validator. Most single staking on other networks in most cases is not up to 100%.

    Enjoy lower or zero gas fees for transactions.

    Gain airdrops from new projects that are coming to the Cosmos network. Whether you are an LP provider or you delegated your tokens to a validator, you will be eligible for airdrops, However, there are certain conditions to it.

    In conclusion, if you are a lover of LP staking, then you wouldn't want to miss out on Superfluiding part of four LP tokens, and if you love passive daily rewards, come and delegate tokens to validators, compound or withdraw your rewards daily.

    DISCLAIMER: This is not financial advice, ensure to do your research.

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