For the Cosmos ecosystem, Osmosis has built a new stablecoin trading market known as a stable swap.
Universe-wide decentralized exchange Osmosis has introduced stable swap, a system for exchanging stablecoins.
With this launch, Osmosis developers intend to become the primary platform where Cosmos users may access and trade a broader selection of stablecoins, both centralized and backed by crypto tokens. If successful, it might become the stablecoin exchange for Cosmos akin to Ethereum’s Curve.
“We intend to support several stablecoins in the Cosmos ecosystem, including both bigger centralized stablecoins (such as USDC, USDT, and BUSD) and some of the younger stablecoins in the Cosmos environment,” stated Osmosis creator Sunny Aggarwal.
Similar to other stablecoin exchanges, the Osmosis stableswap utilizes a “curve algorithm” that concentrates tokens in asset pools so that traders may exchange huge quantities of stablecoins with little price effect or value volatility.
According to DeFiLlama, Osmosis is the biggest decentralized exchange in the Cosmos ecosystem by daily volume and owns over $177 million in crypto assets.
Numerous Ethereum-based stablecoins, like as USDC, USDT, BUSD, and DAI, have streamed into Cosmos since the launch of several bridge solutions, such as Axelar and Gravity Bridge, during the last year. In October, Circle, the issuer of the USDC stablecoin, announced its intention to debut natively on Cosmos in the first quarter of 2023.
Osmosis said that stableswap pools would get a large lot of usage as Cosmos’s population grows and the environment develops. The company said that it would enable developers to establish stablecoin pools similar to Curve’s 3pool, which, according to the team, will increase stablecoin liquidity in the Cosmos ecosystem.
In addition to facilitating stablecoin trading, Osmosis also enabled quasi-pegged assets such as liquid staking derivatives to be exchanged alongside their respective native assets. For instance, the trading pool for staked ATOM (stATOM), the liquid staking token created by Cosmos’ native asset ATOM, will be designated as ATOM/stATOM.