Lately, all eyes have been back on the EVM and Solana, with memecoin and L3 trading emerging as the current focal points for speculation. Of course this wasn’t always the case, rotations exist for a reason. Late last year, when the current bullrun began, the Cosmos ecosystem saw a healthy amount of attention with the inception of Celestia (TIA), and subsequent airdrops like Dymension (DYM). Now, even Dymension is seeing its own ecosystem airdrops with Nim Network (NIM) rolling out, leading one to wonder just how many layers of airdrops there can be, and how long capital can flow on this area before fizzling out.
Airdrops aside, Cosmos has long been at the threshold of innovation in crypto, while not always the best place to go to make money. Things like Proof of Stake, and appchains first came to prominence on Cosmos before inspiring builders to make use of these concepts within other ecosystems. Today we’ll be briefing you on some of the most exciting protocols the Cosmos has to offer, both new and old…
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Pryzm
Pryzm is a yield trading protocol, soon to launch its mainnet on Cosmos. Yield trading obviously came to popularity with the growth of Pendle, which launched around the same time as Pryzm. Of course, Pendle needs no introduction, as the PENDLE token recently put in new ATHs, and so has TVL. A lot of this is off the back of restaking integrations, which Pryzm could also add in the future. Pryzm makes use of Cosmos infrastructure to provide an appchain specifically for yield, integrating with key protocols like Osmos, etc.
Features of the protocol include yield tokenization, fixed yields, liquid governance, liquid staking derivatives, a specialized AMM for yield trading, limit orders, a DCA function, and the re-staking of liquid staking tokens. Pryzm allows its users to customize their exposure by splitting yield-bearing tokens into core elements for optimized exposure to yield, price, or governance.
There is a lot of pent-up demand and interest for Pryzym’s offerings, which include an airdrop for those who stake and delegate to the protocols validators. The protocol has recently released registration for the StakeDrop campaign as well as a new landing page at pryzm.zone.
Cosmos has a massive total addressable market which Pryzm can integrate and pool assets from to allow users to trade yield in a way that hasn’t really been possible on non-EVM chains. Beyond just Cosmos though, Pryzm has the capability to integrate any asset from any chain due to its layer 1 blockchain status and built-in Oracle module, which reports yield payouts. The protocol is currently in its testnet, with mainnet slated for Q2 2024.
Osmosis
Osmosis is the DeFi center for Cosmos; its offerings have expanded quite a bit over the years to include perps trading and key integrations with other protocols, allowing them to build on top of Osmosis liquidity. This is on top of UI upgrades, overcoming the impact of USTs collapse, adding more pairs, connecting to more zones, etc…
Within Cosmis, Osmosis plays a big role in providing liquidity management, swaps, yield earning, and more in its suite of DeFi applications. Osmosis Labs is exploring various initiatives, including transmitter V3 pools that could include multiple assets to reduce liquidity fragmentation caused by different versions of assets like Ethereum, Solana, and Tether coming from various blockchains.
Margin can be accessed via integration with Mars Protocol, as well as perps trading powered by Levana. Features like these make Osmosis a true one-stop-shop for those looking to interact with Cosmos, and the protocol plays a pivotal role in onborading first-time users from CEXs or other chains.
It’s worth noting that Osmosis pioneered the concept of staking LP tokens for blockchain security years ago. While launching on an EigenLayer AVS could bring narrative benefits, there are already multiple solutions within Cosmos for similar purposes. This is important to note as there is increased conversation around utilizing EigenLayer’s restaking solution.
Picasso
Picasso is an interoperability & restaking hub powered by IBC. The protocol places a focus on implementing IBC beyond the Cosmos ecosystem, specifically on both Ethereum and Solana, after already having successfully integrated IBC with Polkadot.
Picasso is exploring generalized restaking for liquid staking tokens (LSTs) from various chains, ensuring asset security through IBC. Similar to EigenLayer, it will accept both native restaking of $SOL as well as restaking of LSTs. Restaking is done through the MANTIS app (Multichain Agnostic Normalized Trust-minimized Intent Settlement).
The restaking vault is notably operated by a 7-of-9 multisig, primarily made up of Picasso team members as well as advisors, community members, validator operators, and the SolBlaze protocol. Restaking vaults are currently live, though the Solana IBC connection that they are proposed to be used for is not. When this happens, the vault contents will be delegated to the Solana IBC validators.
IBC is likely the most significant driver for the future of the Cosmos technology stack, despite the challenge of achieving the same adoption levels as EVM platforms. Some are in the camp that instead of developing various different bridging solutions, which has the notorious risk of exploit as seen in high profile events like the Ronin bridge hack or even the Multichain bridge incident, people should coordinate and use one highly interoperable and efficient solution in IBC.
The Solana integration is being targeted first; it is pending audits but is close to launching, expected this month. This will coincide with the simultaneous readiness of the Ethereum connection. When it comes to Ethereum, the use of the sync committee and a ZK circuit for efficient validator signature verification are utilized.
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