According to a December 4 announcement, Cosmos-based networks Umee and Osmosis will merge via a software upgrade. Umee’s UX Chain code will be re-implemented on the Osmosis chain, allowing to combine the functionality of both networks and create what the development team calls a “DeFi Hub” for the Cosmos ecosystem.
Umee is a decentralized lending protocol that runs on its own dedicated Cosmos chain (called the “UX Chain”). Osmosis, on the other hand, is one of the largest decentralized exchanges (DEX) in the Cosmos ecosystem and also runs on its own private network. According to DefiLlama, it has a cumulative transaction volume of over $23 billion and is the fourth largest Cosmos chain in terms of total value locked (TVL).
According to the announcement, the development team behind the protocol agreed to merge the two networks, allowing lending applications and DEXs to exist on the same chain. The team claims that this will enable the exchange to enable advanced features that were previously impossible, including spot margin trading, short selling, liquidation, stablecoin pools, inter-chain flash loans, MEV markets, and more.
Osmosis co-founder Sunny Agarwal said: “The combined architecture of the two chain functions will open the door to flash loans and new forms of MEV on the same DeFi Hub.” He added, “We originally thought of using flashmint through protorev, for Various types of cross-chain arbitrage and implementation[d] Lending and lending protocols on the same chain will further optimize this vision. “
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The announcement did not specify a specific date for the merger. Instead, it urged users to “keep an eye out for more updates.” Umee UX Chain token UX “still exists,” CEO Brent Xu clarified in a statement to Cointelegraph. Xu said the development team will put forward a proposal to “call the community to take action to discuss and decide how to manage the token economy for user experience.”
Osmosis first implemented centralized liquidity functionality on July 12. On October 3, it announced that it would allow a bridged version of Bitcoin (BTC) to be traded on the exchange.