How to Buy Osmosis (OSMO)
Beginner’s Guide
What Is Osmosis (OSMO)?
Osmosis (OSMO) is an automated market maker protocol (AMM) for the ATOM ecosystem. Osmosis was inspired by Balancer and Uniswap and wants to provide tools that go beyond traditional token swaps and offer users DeFi functionality for a cross-chain world. For example, developers can build customized AMMs with sovereign liquidity pools and users can launch liquidity pools with unique parameters like bonding curves and multi-weighted asset pools. That means a liquidity pool does not always have to follow a 50:50 distribution between its assets but can be customized according to the wishes of the party setting up the pool. Osmosis’s vision is to build a cross-chain native DEX that connects to all Cosmos ecosystem chains. Later, it plans to expand to non-IBC chains like Ethereum and chains similar to Bitcoin. In this fashion, Osmosis will transfer its unique customizability like custom-curve AMMs, dynamic adjustments of swap fees, and multi-token liquidity pools beyond blockchains in the Cosmos ecosystem.
How to Buy Osmosis Summary
- Get a Osmosis wallet (e.g. Ledger, Trezor , Exodus, Guarda, AtomicWallet)
- Find an exchange that sells Osmosis (e.g. , Binance ,Mexc Global )
- Deposit money and make the trade
- Withdraw the Osmosis to your wallet
Buying Osmosis in 3 Simple Steps
Step 1 – Get a OSMO wallet
Osmosis Hardware Wallets
Osmosis is a decentralized exchange and liquidity pool built on the Cosmos blockchain, and it is compatible with several hardware wallets that support Cosmos-based assets. Here are some of the hardware wallets that can be used to store and manage Osmosis tokens (OSMO):
Ledger: Ledger is a popular hardware wallet that supports Cosmos-based assets, including OSMO. Users can manage their OSMO tokens using the Ledger Live software, which provides a secure and user-friendly interface for managing cryptocurrency assets.
Trezor: Trezor is another popular hardware wallet that supports Cosmos-based assets. Users can manage their OSMO tokens using the Trezor wallet software, which is designed to provide a high level of security and usability.
Keystore: Keystore is a hardware wallet that is specifically designed for the Cosmos blockchain. It allows users to store and manage their OSMO tokens securely, using a hardware device that is disconnected from the internet.
Cosmostation Wallet: Cosmostation Wallet is a multi-currency wallet that supports several Cosmos-based assets, including OSMO. It offers both a mobile and desktop wallet application, as well as a hardware wallet integration option through the Ledger device.
Math Wallet: Math Wallet is another multi-currency wallet that supports several Cosmos-based assets, including OSMO. It offers both a mobile and desktop wallet application, as well as a hardware wallet integration option through the Ledger device.
Using a hardware wallet to store and manage Osmosis tokens provides an additional layer of security, as the private keys used to access the tokens are stored on the device and are not exposed to potential security risks associated with software wallets.
The best option for storing any cryptocurrency would be to use a hardware wallet. These are pieces of hardware that store the private key to your coins offline.
Today, there are two leading hardware manufacturers to choose from – Ledger and TREZOR. Both companies have different models of hardware wallets that will get the job done.
If you want deeper insights on specific models, you can read my Ledger Nano X review or my TREZOR Model T review.
Osmosis Software Wallets
Osmosis is a decentralized exchange and liquidity pool built on the Cosmos blockchain, and there are several software wallets that can be used to store and manage Osmosis tokens (OSMO). Here are some of the software wallets that support OSMO:
Cosmostation Wallet: Cosmostation Wallet is a multi-currency wallet that supports several Cosmos-based assets, including OSMO. It offers both a mobile and desktop wallet application, with features such as staking, governance voting, and transaction history.
Keplr Wallet: Keplr Wallet is a browser extension wallet that supports several Cosmos-based assets, including OSMO. It offers a user-friendly interface, with features such as staking, governance voting, and integration with other decentralized applications.
Lunie Wallet: Lunie Wallet is a web-based wallet that supports several Cosmos-based assets, including OSMO. It offers a simple and intuitive interface, with features such as staking, governance voting, and transaction history.
Math Wallet: Math Wallet is a multi-currency wallet that supports several Cosmos-based assets, including OSMO. It offers both a mobile and desktop wallet application, with features such as staking, governance voting, and integration with other decentralized applications.
Exodus Wallet: Exodus Wallet is a multi-currency desktop wallet that supports several Cosmos-based assets, including OSMO. It offers a simple and intuitive interface, with features such as staking, portfolio tracking, and integration with other decentralized applications.
Using a software wallet to store and manage Osmosis tokens provides a convenient and accessible way to access and interact with the Osmosis network. However, it is important to note that software wallets can be vulnerable to security risks, and users should take appropriate precautions to ensure the safety of their assets, such as using strong passwords and enabling two-factor authentication.
Hardware wallets cost money, so if you’re not sure how serious you are about cryptocurrencies and just want to get a taste of what they feel like, perhaps you would be better off starting with a software wallet.
A software wallet is a free program that lets you store your coins on your computer or mobile phone.
The easiest Osmosis software wallets to get started with are undoubtedly Exodus, Atomic Wallet and Guarda . All wallets are very intuitive. Exodus, Atomic Wallet and Guarda is available on desktop for Windows, Mac and Linux, as well as on mobile for both iOS and Android. If you want more information you can read my Exodus, AtomicWallet and Guarda review.
Step 2 – Find an Osmosis Exchange
Buy Osmosis through Binance
- Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies. It was founded in 2017 and is registered in the Cayman Islands. Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software.
Buy Osmosis through MEXC
Founded in 2018, MEXC Global is known as the exchange of high performance and mega transaction matching technology. The team at MEXC Global are some of the first movers and pioneers of financial and blockchain technology. Currently, MEXC Global caters to 10 M+ users in more than 170 countries around the world and we have just started.
Step 3 – Withdraw Your Osmosis
Once you decide on an exchange, open an account and buy your Osmosis. Make sure to withdraw the Osmosis from the exchange to your personal wallet. Never leave coins on an exchange, as you risk losing them all if that exchange gets hacked or shuts down (which has happened in the past) and always double check address before send coins because you can send the coins to wrong address .
Overview
Who Are the Founders of Osmosis?
Osmosis was launched by Sunny Aggarwal, an Indian blockchain entrepreneur that runs Sikka, a blockchain infrastructure company focused on participating in protocols and networks for the decentralized internet. His company is also a top five validator on Cosmos. Sunny served three years as a research scientist at the Tendermint protocol and Cosmos Hub before developing Osmosis.
One of the investors in Osmosis is Paradigm, a digital asset investment firm with stakes in countless other blockchains and protocols like Axie, FTX, and Maker, to name a few.
What Makes Osmosis Unique?
The Osmosis blockchain protocol has three key strengths that set it apart from other AMM money market protocols.
First, Osmosis has customizable liquidity pools. Unlike Uniswap, where LPs can provide liquidity only to a two-token pool with an equal ratio, Osmosis allows for providing liquidity to pools with several tokens and unequal ratios. Osmosis argues that agents in a maturing DeFi market like arbitrageurs and LPs need a more flexible solution that allows them to self-identify opportunities and react to them by adjusting parameters. Thus, on Osmosis LPs can adjust factors slippage, transaction fees, and more.
Coordination between stakeholders is of equal importance, which is why liquidity pool shares on Osmosis are not only used to calculate the fractional ownership of a liquidity pool, but also the right to participate in the strategic decision-making of the liquidity pool as well. This incentivizes long-term liquidity provision and prevents possible vampire attacks from other protocols. Thus, liquidity providers with more skin in the game get a bigger say in the strategic direction of the pool, which is in line with the bigger risk they’re taking.
Finally, Osmosis introduces the idea of “AMMs as serviced infrastructure.” With an increase in the amount and complexity of DeFi products, AMMs have had to:
- Compromise efficiency and trade on AMMs with non-optimal bonding curves.
- Take on the risk of building a custom AMM to maximize efficiency.
Osmosis wants to remedy that by providing AMM creators with an option to define the bonding curve value function and reuse the rest of the infrastructure using Osmosis’ products.
OSMO is the protocol’s governance token with a total supply of 1 billion. At genesis, 100 million OSMO was released, split evenly between airdrop recipients and a strategic reserve. Tokens are being released at the end of each daily epoch and follow a “thirdening” schedule, meaning token issuance is cut three times a year. In the first year, 300 million OSMO will be released, in the second 200 million OSMO, in the third 133 million OSMO, and so on. Newly released tokens are distributed as follows:
- Staking Rewards: 25%
- Developer Vesting: 25%
- Liquidity Mining Incentives: 45%
- Community Pool: 5%
The total token distribution is as follows:
- Liquidity Reward Mining: 40.5%
- Developer Vesting: 22.5%
- Staking Reward: 22.5%
- Community Pool: 4.5%
- Strategic Reserve: 5%
- Airdrop: 5%
How Is the Osmosis Network Secured?
Osmosis is built on the Cosmos blockchain, a layer-1 chain describing itself as “Blockchain 3.0” because of its interoperability. Cosmos uses a proof-of-stake consensus mechanism to connect different blockchains to a “web of blockchains” that can deal with the problems all modern blockchains face: scalability, transaction speed, and transaction fees. By creating a web of interoperable blockchains, Cosmos can provide better performance than rival chains while not compromising important factors like low fees and quick transaction finality.