DeFi Protocols Collaborate to Tackle Liquidity Challenges within the Cosmos Ecosystem
Summary:
A collective effort by several DeFi protocols, namely Wormhole, Swing, Tashi and Evmos, aims to address liquidity issues in the Cosmos ecosystem. Wormhole is about to onboard five new tokens on Evmos, while Swing will integrate these tokens to allow for cross-network transfers. Co-founders of Tashi, Lindsay Ironside and Kristine Boulton, have emphasized the need for such an initiative to resolve the liquidity crisis. While the new system is positioned to resolve these challenges, there is also competition from the Optimism Superchain that is working towards creating a connected chain of blockchains.
Several DeFi protocols have collaboratively undertaken a project to address the liquidity challenges in the Cosmos ecosystem. The players participating in the initiative are cross-chain bridge Wormhole, liquidity compiler Swing, loan protocol Tashi, and Cosmos network Evmos. Wormhole is set to include five bridged tokens for usage within Evmos, which are: USDT, USDC, wETH, wBTC, and SOL, as indicated by updates from Wormhole and Evmos teams. Since the commencement of a Wormhole governance vote on September 19, the proposal has been met with a nearly complete agreement.
Once the tokens are introduced to Evmos, they'll be integrated into the Swing protocol. This will enable users to transmit these tokens from any networks Swing supports, such as BNB Chain, Polygon, and Fantom among others, to Evmos. Furthermore, Tashi's system will embed Swing, simplifying users' process of bridging and depositing these tokens as collateral, and also facilitating borrowing of either Cosmos or Ethereum coins against the collateral. The loans can be converted into other forms of currencies, invested in liquidity pools or used for other popular DeFi transactions.
Insiders from Swing and Tashi have confirmed that upon approval and execution of Wormhole's proposal, the integrations are all set to be activated. The vote on the plan is slated to conclude on September 24, implying that the upgraded liquidity mechanism should be operational shortly thereafter.
According to Tashi's co-founders Lindsay Ironside and Kristine Boulton, the platform's capabilities have remained underutilized because of significant liquidity issues. Ironside shared her own experience of swapping USDC for ATOM for the first time, where she encountered problems in making the swap due to the insufficiency of ATOM needed for the gas fee. This experience prompted Ironside and her team to prioritize addressing this challenge.
Swing's CEO, Viveik Vivekananthan, agrees that the new system could potentially offer a solution to these hurdles. He explains that Swing will convert a fraction of the coins transmitted into Evmos' native currency to pay for the gas necessary for the swap. Initially, Swing will mainly bridge tokens from non-Cosmos networks onto Evmos. However, there are future plans of widening its compatibility to include inter-Cosmos network bridges.
In an attempt to draw in more users with new functionalities in 2023, the Cosmos community has been pretty active. They launched a native version of the USDC stablecoin on the Cosmos-based chain Noble in late March and implemented liquid staking on the Cosmos Hub in mid-September. Nevertheless, Cosmos also faces stiff competition from the Optimism Superchain, which seeks to establish a connected network of blockchains with features mirroring those of Cosmos.
Published At
9/20/2023 7:30:00 PM
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