The following post will explore some of the potential benefits of the Osmosis and Sifchain projects partnering in some way. This is all hypothetical, and I have not seen any public discussion from either team that could indicate this is on the cards. Don't expect this to happen, I'm just exploring some "what if's" in this post.
IBC for Sifchain.
The IBC upgrade for Sifchain is coming soon. Likely within the next two weeks, it seems. This will be a godsend for Sifchain in my opinion, and will add a great deal of accessibility and functionality to the Sifchain platform. Personally, the main reason I am yet to buy any ROWAN, and have limited myself to playing with airdrop funds only, is because I don't really ever use Ethereum. Currently the only on-ramp to get funds in to Sifchain, is from ETH, via the peg system. Only having small amounts of funds at my disposal means I have pretty much ruled out this due to high ETH gas fees, and then the pegging/unpegging fees to bring funds on or off Sifchain.
IBC fixes this. My post about Sifchain yesterday covers this in more detail, so I won't go over it again.
Benefit's for Osmosis.
The Osmosis launch has been highly successful, with a TVL captured approaching $100 million in the first few weeks, and a vibrant and passionate community formed. Momentum is high, and growth as more chains add IBC seems likely. However, OSMO is massively inflationary, in the short term at least, and one false step could lead to a loss of momentum and OSMO selloffs. In addition, Gravity Dex is starting soon, and the way these two projects overlap, compete and complement each other remains to be seen.
The biggest benefit for OSMO from a Sifchain partnership would undoubtedly be access to ETH tokens, without the need to trust the Gravity Bridge. Osmosis would be relying on a competing protocol in many regards when Gravity bridge launches. The Osmosis founder has publicly stated his disagreement with the way Gravity will run on the Cosmos Hub, instead of as a stand alone chain allowing Cosmos Hub to maintain neutrality. He sees Gravity as disrupting Cosmos's neutrality once a shared security upgrade to the Cosmos ecosystem becomes available.
Partnering, or at least developing a mutually beneficial confection with Sifchain would alleviate these concerns, and position Osmosis to be able to bring ETH assets onto Osmosis, without needing to rely on Gravity Bridge. This could be important, particularly if the rivalry between Osmosis and Gravity develops into a fierce competition for funds. Sifchain as a plan B makes sense.
Osmosis needs a stablecoin. Other chains are coming that have stable coins, but need to role out the IBC upgrade first. Teaming up with Sifchain would be the quickest fix for that, making USDT, and all the other Ethereum stables available on Osmosis. This is a big deal,, and would definitely give Osmosis a boost in appeal. Lot's of people want to DeFi with stables, and Sifchain could enable that for Osmosis faster than other processes, without needing to rely on Gravity.
Benefit's for Sifchain.
Osmosis has definitely captured the imagination of a large portion of the Cosmos eco-system, whereas Sifchain seems to be not on the radar at the moment. Linking with Osmosis, and adding ROWAN into pools on Osmosis would instantly make it much more visible, and much easier for Cosmos people to buy in and participate in Sifchain. Also, having OSMO on Sifchain (along with all the other IBC enabled coins) would be beneficial to the project, and help them gain some ground in the competition for liquidity. There are so many projects out, and coming, all competing for liquidity, that having a unique feature will be necessary for growth.
For Sifchain, it's biggest selling point in the short term is the ETH pegged tokens it can bring to the Cosmos eco-system. As I see it, this is its biggest potential unique selling point. Down the track, it will also bring assets from other EVM style chains, like Binance Smart Chain and Matic, but for now it is the ETH tokens. The best way to leverage this advantage is by teaming up with someone to find mutually beneficial solutions. The most likely candidate for this is Osmosis. Gravity is unlikely to be interested, with it's own ETH pegging solution on the way. Other Cosmos chains/Dex's when they add IBC mostly have their own stable coin solutions, and are less likely to need a partnership. Osmosis is the best fit, and
What would a partnership look like?
In short, an OSMO pool on Sifchain, ROWAN pools on Osmosis, both incentivized in some way to attract liquidity. This is likely to happen regardless of any high level partnership. However, there could be a feeling in the Osmosis community that adding ROWAN pools to the incentive list is not in their best interest, as it would be helping a competing protocol gain traction. I can foresee some interesting debates in the Osmosis community when the proposal to add OSMO incentives to a ROWAN pool get listed for vote. I imagine that vote could be quite divisive.
Having OSMO listed on Sifchain would also benefit Osmosis. It would give another pathway for people to buy in, and the first "external" listing of OSMO. (Maybe first, maybe not depending on whether Sifchain upgrades to IBC before or after Gravity launches). Regardless, more availability and more Pathways into OSMO would be a benefit.
The main benefit for both would be as building the two platforms as strong and viable alternatives to Gravity. Sifchain brings the link to Eth, Osmosis brings the attention and a portion of the Cosmos eco-system, and Both would benefit. Exploring synergy between projects would be a more beneficial way to build for the long term than resorting to rivalry and fierce competition.
Down the line a bit, Sifchain has other unique aspects it would bring to the table, with leverage being a big one, also BSC and MATIC token bridges is another benefit Sifchain brings to the table.
These are just a few random thoughts for the respective communities to consider. Like I said, it is all hypothetical and I have not seen anything to suggest this partnership is likely - yet. In my opinion, the two projects working together makes sense, but there is a lot of competitive rivalry, a good dash of ego, and passionate communities that could make a partnership unworkable. Time will tell.
If you enjoyed this post, feel free to check out some of my other posts about Sifchain and Osmosis:
- Things are looking up for Sifchain
- Osmosis Liquidity Incentives
- Well that escalated quickly
- Cosmos based DeFi part 2 - Osmosis
- Cosmos based DeFi part 3 - Sifchain
If nothing else, think of the meme's that could come from a partnership. What would Sif and the Osmosis mad scientist look like as a couple? All sorts of possibilities...
Thanks for reading, I'd love to here from people in both communities what you think.
Cheers,
JK.