Osmosis Crypto – Should You Try the COSMOS DeFi Platform?

The cryptocurrency trend isn’t letting up it seems as more countries and companies adopt the digital asset. That’s unsurprising since its features have gone a long way since Bitcoin. Now, we are much closer to realizing a new financial system for the world.

We will focus on one of the promising projects that will make this dream a reality: the Osmosis DeFi platform. It provides a smooth way to trade digital currencies with attractive benefits That’s because it might be your new way to earn passive income from cryptos.

Before we talk about the Osmosis crypto platform, we will have to talk about other concepts related to it. These include the COSMOS network, decentralized finance, and yield farming. After that, we may start discussing the Osmoses DeFi platform and its OSMO token.

A brief overview of cryptocurrency

This article is for general audiences, so we will need to talk about how cryptocurrency works. The world is adopting this technology more and more, but many people still don’t understand how it works.

This will help all our readers understand how the Osmosis crypto network functions. The first cryptocurrency is Bitcoin (BTC) which came out in 2009.

Satoshi Nakamoto created it as a new financial system for the world. Unlike the current one, it will not rely on governments and banks. Instead, regular people will volunteer to operate it.

Using their computers, these crypto miners will confirm bitcoin transactions. Each of them has encryption protecting it, and it’s up to the miners to crack its code.

The first one to get to the winning solution will get to add a new block of data to the crypto network. This is one of the reasons it’s also called a blockchain.

What’s more, that lucky person will get proof-of-work that lets that guy earn more bitcoins as a mining reward. People call this process the proof-of-work model.

You can find so many other cryptocurrencies besides bitcoin nowadays, but many of them still follow this original system. Yet, they now provide more features than before.

What is decentralized finance?

This brings us to the feature that’s most relevant to the Osmosis crypto platform called decentralized finance. Thanks to DeFi, we now enjoy a part of Nakamoto’s vision in real life.

It refers to the financial services that come from blockchain. They’re similar to the ones from our current centralized system, but cryptos improve it in several ways.

For example, it allows a new financing method for people called crypto lending. You may now put cryptocurrencies as collateral when borrowing a loan.

You can find many online platforms that provide this feature. Nowadays, you can find more people getting crypto loans because the ones from banks are a lot stricter.

If you time it right, your collateral may grow during your repayment period. As a result, you may borrow even more money. However, market volatility may work against your favor.

Your cryptocurrency collateral may drop in value, prompting your lender to request more supply. Some may even take your collateral until you do so.

DeFi has a lot more to offer, though. The Osmosis crypto platform mixes so many features that we will have to talk about each one. Don’t worry, we will talk about it soon!

Read More: Why Investors Are Going Bananas For ApeCoin!

Here are the other parts of DeFi:

Decentralized marketplaces

You may have heard of people earning millions of dollars after selling their digital art as an NFT. The acronym stands for the word “non-fungible token,” and it records ownership of an item into a crypto network.

This boosts the value of that item even if there are numerous free replicas available. Unlike those copies, the NFT is tied to a blockchain. Of course, people may value it for other reasons.

You can buy and sell these from decentralized marketplaces, such as the one from Binance. Click here if you’d like to know more.

Digital wallets

Now that our money is becoming digital, we would need something to hold it in that format. Fortunately, software and hardware wallets make this possible.

You may download mobile apps such as Ronin Wallet that let you store cryptocurrencies. Later, you may find the Osmosis crypto wallet to be a more appealing option.

On the other hand, you might want to get a physical or cold wallet. They’re devices that are roughly the size of a USB thumb drive, but they often provide more protection than their digital counterparts.

Decentralized exchanges

These are digital platforms that let people buy and sell cryptocurrencies from each other. It matches buy and sell orders from numerous users within seconds.

That way, the platform can serve both buyers and sellers. This is similar to how a stock market exchange platform works, but many decentralized exchanges have certain advantages.

They often work faster than stock exchange apps and they prevent slippage. This is when most of the prices that the buy and sell orders want don’t match.

This makes the platform inefficient, so users are more likely to leave. Decentralized exchanges avoid this by using automated market makers.

What is yield farming?

Here’s another feature of the Osmosis crypto platform and similar options. Decentralized exchanges work because they have a supply of cryptos traded by users.

As trading continues, it may eventually run out of certain coins. Once this happens, trades may stall for that certain cryptocurrency. This is why exchange platforms let investors help.

Regular folks could supplement this supply with their coins, so they could eventually earn interest. After a day, you may redeem your assets along with the accrued interest.

This is called yield farming, and more people use it nowadays. Similar to most investments, this activity comes with risk since you could also lose money.

Also, this is a better option if you’re a seasoned crypto investor. Yield farming often involves depositing a pair of different cryptos in a decentralized exchange platform.

This means you will have to understand both of them. If not, you might invest at a bad time and lose money. Understanding the Osmosis crypto platform is a start.

What is the COSMOS blockchain?

Can't miss this session✋

The State of @cosmos by @billyrennekamp ⚛️

When? 📅 April 15th

Where? Amsterdam 🇳🇱

Only a few tickets left 🎟️https://t.co/RuEx5K53Ka

— ZKV (@zkv_xyz) April 4, 2022

You may have noticed this article’s positive outlook on cryptocurrency. Yet, we must admit that it has major flaws preventing its further widespread use.

Search the crypto market on the internet, and you’ll find thousands of tokens. You’ll see that new ones enter the market almost every month.

Many of them have different use cases, so it can be difficult to keep track of them all. This is especially true if you’re a first-timer on the market.

Thankfully, Jae Kwon created a cryptocurrency network that may solve this: the Cosmos blockchain. It aims to make it facilitate the connections between the networks.

In turn, regular users will likely find it easier to use these digital assets. What’s more, this could make the asset even more useful. The Cosmos blockchain groups the networks into Zones.

They converge into Hubs, facilitating transactions among the Zones and their members. What’s more, the Cosmos makes it easier for developers to create new crypto networks.

They would need the native cryptocurrency of Cosmos called ATOM for this feature. Also, they would need the Cosmos Software Development Kit.

What is the Osmosis crypto exchange?

Photo Credit: chaindebrief.com

This SDK made the Osmosis crypto platform possible. After going through those other concepts, we may now discuss Osmosis!

It’s a decentralized exchange application that lets people help in the exchange of tokens from the Cosmos ecosystem. Osmosis works as its automated market maker.

It makes sure that the buy and sell orders can execute as quickly as possible. Also, the Osmosis platform uses the OSMO token for governance and payment for transaction fees.

Holding OSMO coins let you vote on changes to the Osmosis network. They also let you cover the fees each time you buy and sell stuff with tokens from the Cosmos network.

Moreover, you may use OSMO tokens for yield farming. You will need other tokens such as the ATOM, the native cryptocurrency of the Cosmos network.

This will let you earn passive income from the Osmosis crypto platform. Still, be wary of the risks that you may encounter from such an investment.

Should you invest?

The Osmosis Foundation just conducted its first ever sale, raising $21M in a strategic round led by @paradigm! (number not an accident 😉)

Funds will support the many dev teams and DAOs building Osmosis into the leading DEX in the Interchain!https://t.co/eS84634Hry

— Osmosis 🧪 (@osmosiszone) October 27, 2021

As you can see, the previous topics were necessary for our discussion of the Osmosis crypto platform. That’s because it combines many of the services from the crypto space.

Believe it or not, those were just the basics! If you’re serious about investing, you will need to learn more about the Osmosis crypto platform.

For example, you will have to be ]aware of its most recent market data. At the time of writing, the price of an OSMO token is $8.15. Does this mean you should buy some now or not?

Final thoughts

This will depend on your investment goals. Whether you’re interested in cryptos or not, you must know all you can about assets before investing in them.

Regardless, you should learn all you can about these digital assets. Check countries and companies, and you’ll realize that cryptocurrency adoption is in full swing!

You can learn more about cryptocurrency, stocks, and other investment options by reading more Inquirer USA articles. Note that this article is not meant to provide investment advice.