Osmosis, Cosmos ecosystem, Brahma Finance | Hidden Gems – Defi
Review Date: June 9, 2022
TOKEN METRICS WATCHLIST
We scored many projects this week, and these are the DeFi and yield farming opportunities we think you should know about:
- Osmosis + Cosmos ecosystem: Airdrop potentials
- Brahma Finance
Please keep in mind that some of these projects have not yet been subjected to our code review process, but we want to call them out here for preliminarily catching our eye based on our fundamental analysis process.
Osmosis is the leading DEX platform in the Cosmos ecosystem. It runs on powerful underlying technology that allows developers to build customized AMMs and asset pools, all while being highly composable to allow new projects to be developed on top of it. Osmosis also has powerful network effects as the best integrated DEX on Cosmos, consistently seeing the most daily volume across all projects on the Cosmos network.
Why we like it
DEXs are a crucial part of any ecosystem, and Osmosis is in a distant lead within Cosmos. However, a secondary reason to pay attention to Osmosis is the developing culture of airdrops from new projects building within Cosmos. After analyzing more than 20 recent and upcoming airdrops, we identified that holding the Osmosis token was an eligibility criteria for more than half of them – many projects value the utility that Osmosis brings in facilitating access to liquidity and uses an airdrop to reward Osmosis stakers and liquidity providers. As far as airdrops go, the ATOM token unlocks the most opportunities (unsurprising as this token represents the Cosmos network), with Osmosis in second place and Juno in third.
Osmosis raised an undisclosed amount from Paradigm and 1Confirmation.
One co-founder is Sunny Aggarwal, who has 3 years of experience as a Research Scientist for Tendermint, the group that created the entire Cosmos ecosystem. The other co-founder is Josh Lee, who also worked at Tendermint and was previously the co-founder of Chainapsis, which built the Keplr wallet.
The primary function of the token is governance, with key voting areas including protocol upgrades, adding liquidity mining rewards, and setting the base network swap fee.
- Consider picking up just enough OSMO and ATOM to be eligible for the majority of airdrops. For ATOM, 10 tokens will qualify for most, and 25 will cover the more exclusive ones. For OSMO, 20/50/100 were common minimums in the past. If you want to cover even more ground, 20 JUNO has typically been sufficient. Additionally, you should stake all of the respective coins as that has occasionally been a criteria in the past. All staking can be done in Keplr: https://wallet.keplr.app/#/dashboard
- To acquire OSMO, the easiest route is actually to purchase ATOM (listed on most major exchanges), transfer it to your Keplr wallet, and then swap into it right on Osmosis itself: https://app.osmosis.zone/?from=ATOM&to=OSMO
- If you already hold tokens in the ecosystem, or want to see what airdrops have happened in the past and might be upcoming, here are two useful resources: https://cosmosairdrops.io/ and https://cosmosuplink.web.app/airdrops
- While we like the protocol, the combination of high token inflation in the short term and current market conditions suggest this isn’t the time to build a larger position in OSMO. However, the upside potential of airdrops could warrant holding the amounts mentioned above.
Brahma Finance (76%)
Brahma is a recently launched protocol that aims to create new sources of yield that are sustainable and diversified. The underlying concept is that Brahma will offer vaults for the user to deposit assets in (USDC and ETH at first), and the vaults will collect interest on the assets in historically low-risk yield pools such as a stableswap pool on Convex for USDC and the ETH-sETH pool on Curve for deposited ETH. After a week passes, the vault collects the interest from deposits and uses machine learning to determine whether to open a long or short position with only the interest. This allows the vault to take leveraged bets via derivative protocols while leaving the original deposit completely intact.
Why we like it
New sources of yield are always valuable to analyze as the DeFi space continues to innovate. Brahma’s model is particularly attractive now when market conditions are difficult to navigate as it provides a source of yield that is both reactive to the market and doesn’t put the original capital at risk like some other vault structures do. They are also experimenting with a novel karma system that tracks user engagement and rewards positive interactions, with the opportunity for those with high karma to have exclusive access to certain upcoming vaults.
The three co-founders have previously worked together on building infrastructure for crypto trading. One of them has a master’s from the Indian Institute of Technology with two years of experience at Samsung as a Research Engineer, and another studied Cryptography at Stanford and worked at a quantitative investment firm. The team is now at 9 and hiring.
Brahma raised 4.2M in a seed round that was led by Framework Ventures and included Dialectic, Ledger Prime, the LAO, Jason Choi, and more.
- As the project is still early, the main action is to explore the site, docs, and community. If the concepts outlined are appealing, getting involved early will let you start building up karma, which will grant special opportunities in the future.
- The vaults are currently live and running capital, but are effectively in beta testing. They currently have a karma minimum to access as they are still undergoing audits and don’t want to open the product up to a more general audience prematurely.