Intending to remove the friction that users experience when bridging their Bitcoin holdings to other ecosystems, the Osmosis DAO has given the green light to implement a Feeless Bitcoin Bridge through their partnership with Nomic, the announced provider of the Bitcoin bridge.
In this article, we will look more into what the cosmos group does, the details regarding the agreement including the parties involved, the impacts of the decision, and the reasoning behind the proposal.
Let us start by looking at the important parties involved in the agreement.
What does the Osmosis platform do?
Osmosis is one of the leading decentralized exchanges that functions both as a Layer-1 blockchain as well as an application.
The platform lets its users swap, earn, and build their portfolio through cryptocurrencies and claims itself to be the largest interchain Decentralized Exchange (DEX).
The Decentralized Autonomous Organization Osmosis has been revered by many in the crypto community for containing the best UI/UX tokens and has often been called ‘The Liquidity Hub’
Now, let us get into the details regarding the new proposal from the group in the following section.
What are the important details regarding the new agreement?
The Osmosis Group which carries out its work as a Decentralized autonomous organization (DAO) recently carried out a vote among its community regarding the adoption of the fee-free Bitcoin bridge that allowed Bitcoin into the Cosmos ecosystem.
The new revenue-sharing agreement is expected to address the limitation in the blockchain bridges which limits the parties to earn their revenue directly from the deposits and withdrawals that happen in their ecosystem.
Almost 92% of its community voted in favor of the proposal with only 1% against the proposal and the other 6% abstaining from voting, thus with the overwhelming majority in favor of the move the idea has been put on the frontline for implementation.
Let us now look at the possible impacts that this proposal is set to have in the ecosystem and in the token market.
What are the Impacts of the proposal?
As per the announcement given by the community, the agreement as proposed will be letting Nomic use its protocol revenue to become more aligned with the usage of its bridged BTC.
With the approval of the proposal, there will be no charging in the form of bridging fees or transfer fees for any BTC transaction that happens between the two entities Nomic and Osmosis.
The new upgrade will enable users to use their Bitcoin holding for Decentralized financial activities on the Osmosis platform such as borrowing, lending, and staking of their tokens.
The new proposal is expected to turn the tides when it comes to the long bearish run of the Osmosis token (OSMO), which now stands at a price of $0.5203, down by 6.24% from its last recorded value.
However, the impact of the new move can be seen in the price speculated for the Osmosis (OSMO) token with a prediction of the coin staying within the average range of $2.30 by 2024.
The predicted lowest value of the coin too is set at an optimistic price range of $2.15 if the crypto market experiences a decline.
The previous market trend of the coin was set at a Bearish trend, with the coin having experienced only about 11 green days in the past 30 days constituting about 37% in the overall period of evaluation.
The coin had a neutral Fear & Greed Index score that scored a value of 21 even with a price volatility of 17.67%.
From the available price prediction and market analysis of the OSMO token, we can hope that the recent move from the platform will help to turn the tide of the token and set itself on a more bullish path in the future.
Now in the below section, we will look at the intent of the proposal to make a Zero-fee Bitcoin bridge.
What was the intended purpose behind the Implementation of the proposal?
The essential goal that the Osmosis group hopes to achieve is to leverage the value that has been tied up in Bitcoin (BTC) to bring more liquidity into the broader crypto finance industry.
The new move is also expected to integrate Bitcoin into the broader Decentralized finance (Defi) ecosystem thus attracting new users.
Final Thoughts
Taking into account all the factors that relate to the company, its token, and the response from the majority of its community members there is no doubt that the move from Osmosis is set looking in the right direction for both its platform and its token.
What is however of concern for all the involved parties is the lack of response that we see from the market toward the move and the current state of the token in the market.
Interested parties must therefore tolerate an extra risk element and bet on the actualization of the prediction that has been set for the coin in the long run to reap benefits for their investment.
