The OGP’s renewal included a mandate to allocate 7M OSMO towards liquidity operations with the goal of improving OSMO liquidity across the ecosystem. The OGP is now engaging three liquidity providers to provide OSMO liquidity on centralized exchanges (CEXs) and certain Osmosis pools. Below, we share a brief overview of our process and existing engagements.
Selection Process
The OGP engaged in discussions with a few different liquidity providers as part of a vendor selection process. We approached these discussions with two goals in mind: first, to find the best partner and deal structure that improves OSMO liquidity on CEXs while remaining aligned with the protocol’s growth, and second, to onboard new institutions to Osmosis. As a reminder, liquidity providers offer their services through loan agreements that include an option to purchase the OSMO at the end of the agreement. With that in mind, proposals received were assessed based on factors such as the strike price offered on the option, centralized exchange support, their willingness to provide liquidity on Osmosis, their reputation and KPIs like uptime, spreads, and market depths provided.
Current Engagements
The OGP is now engaged in three liquidity provider agreements. We outline each one below:
1. Amber
- Loan Amount: 2,000,000 OSMO
- Term: 12 months
- Liquidity support on popular CEXs and strategic Osmosis DEX pools
2. Wintermute
- Loan Amount: 2,000,000 OSMO
- Term: 12 months
- Liquidity support on popular CEXs and strategic Osmosis DEX pools
3. Pulsar
- Loan Amount: 500,000 OSMO
- Term: 12 months
- Liquidity support on popular CEXs and strategic Osmosis DEX pools
The team is regularly reviewing reports provided from each liquidity provider to monitor performance and uptime as part of our SLAs. We’re thrilled to see significant liquidity improvements on popular CEXs, and two of our partners have already onboarded to Osmosis, adding institutional liquidity provisioning to popular pools.
What’s next?
The OGP has 2,500,000 OSMO remaining to allocate for liquidity operations. Our plan is to monitor this initial distribution and assess the most productive path forward for the remaining allocation.
