Osmosis DAO Approves Proposal for Free Bitcoin Bridging with Cosmos
Sunny Agarwal, co-founder of Osmosis, praised this proposal as a significant milestone in DAO-to-DAO transactions.
Osmosis DAO Approves Proposal for Free Bitcoin Bridging with Cosmos
Osmosis DAO has approved a proposal to eliminate fees for transferring Bitcoin into the Cosmos ecosystem via Nomic, addressing user difficulties.
Voting Results
The initiative received overwhelming support, with 93% of voters in favor, aiming to enhance Bitcoin liquidity on the platform by removing the existing bridge fees.
The revenue-sharing agreement with Nomic is also a crucial part of implementing this fee-free cross-chain solution, setting a new precedent for bridge business models.
Previously, bridges struggled to generate direct revenue from deposit and withdrawal transactions. However, Osmosis's upgrade addresses this issue by linking Nomic's protocol revenue to the actual usage of the Bitcoin bridge they provide.
Nomic will support users in depositing Bitcoin directly into Osmosis (up to 21 BTC) and receiving Bitcoin-backed assets, nBTC. In return, Nomic will receive a 1% deposit fee and a 0.5% transfer fee.
The proposal also stipulates that Nomic will collect 10% of the total fees from transactions involving nBTC through Osmosis and a corresponding portion of fees from nBTC derivative transactions.
Sunny Agarwal, co-founder of Osmosis, stated:
"The proposal provides a new business model for bridges, one that is only possible with specialized appchains and difficult to apply to generalized blockchains."
Before partnering with Osmosis, Nomic had planned to integrate with the Bitcoin staking protocol Babylon in April and launch stBTC, a liquid staking Bitcoin token.
Cross-Chain Bridge
A cross-chain bridge is a solution that enhances interoperability between blockchains by allowing the transfer of cryptocurrency assets across different networks.
Osmosis was particularly active in Q4 2023. According to Messari, DEX trading volume increased sixfold compared to the previous quarter, surpassing $5.3 billion. This achievement is attributed to the new features and effective incentive strategies that Osmosis has implemented recently.
