The Defi industry has become an alternative for centralized exchanges challenging its operations by bringing a significant change in crypto trading. The massive growth in the use of decentralized exchanges has continued since 2020. Even though centralized exchanges have gained the majority in terms of the high trading volume. This is all because it has provided comfort in trading crypto and fiat currency. But they come with limitations in control, anonymity, and mainly security. This brings the need for decentralized exchanges with inclusive solutions. Osmosis exchange comes as one prominent example. Today, in this article we are going to find out whether it is a legit exchange or a scam.
Osmosis exchange
Osmosis comes as a new development of DEX created in a whole different ecosystem. There have been continuous innovations that differ from the present ones. The creation of decentralized exchanges like Osmosis is done via the use of this Network. Which has been created on the Cosmos ecosystem, a framework that finds its use for the creation of blockchains. Osmosis also applies the use of AMM (Automated Market Maker) featuring liquidity on the cosmos system.
The development of the Osmosis exchange was done on public and open-source software. That lets P2P (peer-to-peer) transactions and lets trading of IBC-accepted tokens. With the use of web and mobile interfaces, users now can access pools. Even though there is no limitation on the operations of the website, still. It is important for users with the fact that they are responsible for the interfaces and fees.
Users who want to explore trading on Osmosis Exchange. They should be aware of this fact about uncertain changes in the price of tokens in their trading pair. The platform generates its revenues from liquidity mining and trading fees. The trading fees of Osmosis include deposit, withdrawal, swap, transaction, and exit fees. A user has to link himself to Kepler Wallet for a deposit.
Cosmos SDK
The Cosmos SDK comes with amazing features in meeting the needs of the users. This Network is not only the best in scalability. but also has a suitable network to grow its user base. Apart from these, it also helps in the easy communication of tokens. And controls ensure top-level security through the use of firewalls to protect the blockchain from the effects of malicious malware. Users can also have access to explore PoS (proof-of-stake), open-source networks, and autonomy.
OSMO token
Like the Binance exchange has its native utility token Binance Coin or BNB, the Osmosis exchange also has its native Osmosis crypto token (OSMO). Rather, the circulation of the OSMO tokens takes place on the platform via staking, liquidity mining, and Airdrop. Developers can unlock it to have the access to it.
At Osmosis, users have the advantage of earning and owning the OSMO token. But before accessing it, they have to prove that they have been active on the platform. Users need to do transactions, stake OSMO tokens, provide liquidity, and vote in the Osmosis governance. It lets earning and building of portfolios after meeting all these criteria. Moreover, the distribution of 20% of OSMO tokens that are airdropped in the accounts of all users is ensured by the Osmosis exchange.
Understand more about decentralized exchanges
Now let us understand more about decentralized exchanges. One must have a question in mind as to what sets these exchanges apart from their centralized exchanges. Well, these are the provision of new incorporated characteristics that makes these trading platforms different from their centralized competitors. Decentralized exchanges have benefited from Automated Market Maker which has brought remarkable changes to the entire ecosystem.
One major feature to notice in decentralized exchanges is user anonymity. Where privacy is one such limitation of centralized exchanges. Where BTC and ETH claim to be pseudonymous but do not guarantee full anonymity. Anyone can access the transactions that have been done on the digital ledger, blockchain. And since the public addresses of the users are shared, it makes them prone to risks. The decentralized exchange comes with the prime objective of ensuring transparency and letting users trade without bothering about their privacy.
A big portion of the DEX
Automated Market Maker is a big portion of the DEX (Decentralized Exchange). With the introduction of the Peer-to-contract system, the AMM has brought remarkable changes in the trading style. AMM also ensures increased decentralization. And algorithms determine the price, not the order book.
There has been sustained growth in the innovation and progressive developments of the DeFi industry to bring ease in trading for the users. With that, AMM has also made a mark of itself in the crypto market via the launch of new technologies and amendments to the present regulatory frameworks.
Decentralized exchanges might have posed a new challenge to centralized exchanges with their advantages. But they do encounter issues with uncertain changes in the liquidity rates. AMM focus on ensuring the creation of liquidity and continuity by boosting trade on DEXs. In addition, it aims to address the current issue of liquidity with the creation of a liquidity pool. And it is easier for traders to create liquidity and give them incentives in the form of rewards.
Conclusion
Osmosis Exchange is a decentralized trading platform built on different ecosystems. Which intends to provide solutions to the limitations of other DEXs. This platform has a wonderful interface that makes users ease to explore their trading experience and get rewarded. Osmosis comes as highly incentive scalable, neutral, autonomous, and speedy. And yes, it is not a scam but is a legit platform. Log on to crypto websites like Cryptoknowmics and explore other topics like Gravity Dex, etc.
