Bittime - Osmosis, a Cosmos-based blockchain which is famous for its decentralized exchange (DEX), will join the competition in the Bitcoin layer 2 realm. This is the latest indication of the rise in Bitcoin developer activity.
Osmosis Will Launch Alloyed Bitcoin
Next month, Osmosis will launch "alloyed bitcoin", their latest product aimed at making trading easier and increasing liquidity. Alloyed bitcoin is a tradable asset, serving as a derivative representation of Bitcoin's liquidity pool.
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Reporting from Unchained, Sunny Aggarwal, one of the founders of Osmosis Labs, explained that alloyed bitcoin is an innovative product.
"It's basically a collection of different BTC variants from across the ecosystem," Aggarwal said.
In other words, Osmosis combines assets such as Nomic-issued nBTC, Ethereum- based wBTC , and Osmosis' native wBTC to increase liquidity.
Also read: Price Prediction for Osmosis (OSMO) 2024-2030
This concept is similar to how centralized exchanges, such as Coinbase, classify all ether (ETH) on their platform as ether - regardless of origin or other cross-chain bridges.
Alloyed bitcoin is the latest in a series of similar products that Osmosis offers, including alloyed ether.
What is the Purpose of Alloyed Bitcoin?
Alloyed bitcoin could be a key component to Osmosis' security model once their smart contracts are running.
However, governance members, consisting of OSMO token holders, must first approve the use of alloyed bitcoin in the security model through voting. OSMO is the native token of DeFi hub Cosmos.
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Currently, Osmosis security comes from validators powered by staking OSMO. However, later alloyed bitcoin will be added as an asset that can be staked besides OSMO. If the community agrees to this, BTC could become a key asset for DeFi on Cosmos, according to Aggarwal.
"How this proposal is received by Osmosis governance will depend on its terms," Osmosis Grants Program lead RoboMcGobo wrote to Unchained on Telegram.
Also read: Complete Guide to Staking Osmosis $OSMO
"Osmosis should allocate a portion of their security budget (which is currently only for OSMO stakers) to staked BTC. While I think most would agree, the amount of staking rewards diverted to staked BTC may be up for debate."
If governance allows staking of BTC, "staked BTC will earn a portion of the OSMO staking reward, which will slightly reduce the staking reward for OSMO stakers depending on how much BTC is staked," added RoboMcGobo.
With a total value locked (TVL) of $177.45 million, Osmosis is the fifth-largest blockchain network in the Cosmos ecosystem, with a seven-day trading volume of $175.57 million, according to DefiLlama.
According to Aggarwal, staking BTC on Osmosis can increase security and bring more liquidity to Osmosis and Cosmos as a whole.
"Staking provides an annual return (APR) that encourages people to move their BTC," he explained.
This Osmosis step emerged along with the rise of experimentation on Bitcoin. From the launch of Ordinals in January 2023 bringing non-fungible tokens (NFTs) to Bitcoin, to the recent emergence of the Runes protocol, use cases on the native blockchain continue to expand.
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Innovation is also seen in projects that aim to create a layer 2 Bitcoin network, such as Citrea and Merlin Chain.
Build on Bitcoin, a layer 2 focused on decentralized finance (DeFi), launched its mainnet on Wednesday, highlighting a resurgence of activity in Bitcoin, with developers returning to the oldest blockchain.
The price of BTC itself has increased 6.4% in the last 24 hours to around $63,230, according to data from CoinMarketCap.
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To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
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Monitor price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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