OGP Retro: One Year Review

Since the OGP's launch last year, we’ve funded a broad set of projects to help Osmosis grow. In total, we've approved 84 grants across 17 different batches with over $4.5M in funding, after having received and reviewed 620+ applications. In this review, we will reflect on the work we've done over the past year and share some of the highlights.

What Went Well 

Skip Protocol

• Skip has been a top-tier Osmosis contributor since Summer 2022. We met the Skip team after a Terra Hackathon in May 2022 and brought them into the Osmosis sphere. 
• We worked with them on the ProtoRev negotiation and buildout, which has resulted in $200K of protocol revenue for Osmosis, and is an example of Osmosis setting itself apart as a DEX that innovates on internal MEV capture, something no other DEX has been able to do. 
• We’ve also negotiated the chain development contract with the Foundation that stands to further develop POB as well as a number of other modules (e.g. fee markets, protocol-owned oracles). 
• We continue to spend time working with them on things like POB, and see them as a key example on what 10x contributors to Osmosis look like. 

Mesh Security 

• This initiative funded a number of teams to complete the development of mesh security and bring it to mainnet across the Cosmos ecosystem. 
• Following Cosmoverse in 2022, it was clear that Mesh Security had great potential but it was unclear who was responsible for completing its development. Over the following months, the OGP took the lead in scoping out an initiative, recruiting a number of teams (Confio, Cosmology/Starship, Informal, Juno, Design DAO) to build out a solution that could be adopted by any Cosmos chain. 
• In order to help with the funding as well as strengthen the narrative behind Mesh Security, we sought out a number of funding partners including ATOM Accelerator, Akash, Axelar, and the Osmosis Foundation. 
• Mesh Security has become an example of Osmosis spearheading an interchain initiative that results in increased economic productivity for the broader ecosystem, something Cosmos as a whole has historically struggled to do in an efficient manner. 
• Mesh Security is poised to be the dominant security model for sovereign appchains and development is on track to be ready for mainnet by Q1 2024.    

Fee Abstraction

• Any chain that implements the FA module can allow their users to pay gas fees in any IBC-enabled token, leveraging Osmosis on the back-end to facilitate swaps back to their native token. 
• We expect the module to return direct value to Osmosis in the form of additional fees from swaps, as well as by making its pool oracles more widely used. 
• This initiative was first conceived last year, prompted by some teams who wanted to enable gas-free in-app swaps. After putting out a public RFP we ultimately decided to fund Notional to build it, who delivered in a timely manner, and then licensed the module so that other protocols can only use it in conjunction with Osmosis. 
• The OGP worked with the Notional team to post a signaling proposal to deploy the Fee Abstraction module on the Cosmos Hub, which passed with overwhelming support. 
• A number of other chains have already expressed their interest in adopting the module, such as Akash, Burnt, and Stargaze. 
• Over-time, we anticipate Fee Abstraction to deliver significant economic and marketing value to Osmosis. 

Nabla

• Nabla has become a key contributor to Osmosis over the past few months, having helped accelerate a number of core product roadmap items. 
• Initially sourced after posting a public RFP to work on the Cosmoswap frontend, they went on to complete the project in no time while maintaining high standards. 
• They've also improved CLI functionality by enabling in-wallet signing, and are now working on Token Info Pages. 
• Nabla is another example of a 10x team that can drive large amounts of value to Osmosis and can be a crucial resource going forward, especially for anything frontend-related. 

Celatone 

• Celatone has built an open-source explorer for Osmosis with a heavy focus on CosmWasm-specific features to facilitate on-chain contract development. 
• We were introduced to the team by a member of the Osmosis team at the time, who shared how valuable a tool like Celatone would be for developers building on Osmosis. 
• After chatting to many other developers in the ecosystem, we scoped out the grant and funded Celatone to bring their product to life. The grant is now complete, and Celatone is likely the most used explorer by developers building on Osmosis. 
• Many developers have stated both privately and publicly how much they use and love the product, such as builders from Membrane, IBCX and Apollo, showing how Celatone has significantly improved the developer experience on Osmosis. 

Other

Range

• We funded Range to build a security monitoring tool to improve the overall security of Osmosis as well as apps built on top of it. The team is now working on a number of other impactful items for the Osmosis community, such as public observability dashboards to monitor the real-time state of Osmosis pools and IBC flows, as well as research on how to improve and extend the functionality of IBC rate limits, which play an extremely important role in limiting the damage of hacks and other malicious activity on Osmosis. 

Starship

• We partnered with Starship on a grant to integrate their unified development environment, which allows Cosmos developers to spin up a fully simulated mini-cosmos ecosystem and write end-to-end test cases, with both OsmoJS and Mesh Security, in addition to a Typescript testing framework. They're also running tests for a two-way Mesh connection which have been incredibly valuable for Mesh contributors to help solve bugs and fixes for the mesh-security-sdk. 

Notifi 

• Notifi's Osmosis frontend integration allows users to sign up for in-app or external alerts and notifications for product announcements, account activity, portfolio changes, and much more. This addition has significantly improved Osmosis UX, as well as being a useful tool to increase user engagement and retention.

Lenses

• We helped Numia bootstrap their Osmosis public-facing dashboard. The dashboard includes pre-selected and actionable data analytics widgets that display on-chain data that is not readily available elsewhere, such as wallet activity and chain revenue flow, reducing the barriers for non-technical users to analyze and understand Osmosis data.

Threshold decryption research

• In collaboration with Flashbots, we funded Antoine to dig into the potential market implications of implementing threshold-decrypted mempools, which is one of the main items on the Osmosis roadmap. He did a great job with the research as he uncovered some insights that were previously unknown to the Osmosis team, such as how address-based leakage is significant for margin accounts, for instance.

DAO DAO

• We worked to bring DAO DAO's membership, Tokenfactory, and NFT DAO tooling to Osmosis to make sure apps on Osmosis have the necessary tools to manage their communities and grow their user base. These are crucial primitives that were previously missing on Osmosis. 

Genie

• We funded Genie's integration with Osmosis to abstract away massive amounts of granular data chore work, so that apps and protocols on Osmosis can focus on running token distribution campaigns to engage their communities without spending time on the technical implementations.

Map of Zones

• We partnered with Map of Zones on a grant to build historical charts for every Cosmos zone which include new data such as IBC traffic, transaction activity, and daily active addresses. We also covered six months of their operational costs to keep Map of Zones, one of the top public goods in the IBC ecosystem, up and running.

In addition to the successful initiatives listed above, we've also put a lot of effort into being much more communicative and transparent with the community over the past 12 months. We've released monthly and quarterly transparency reports, hosted monthly Twitter Spaces with grantees, held monthly office hours in Discord, and maintained a public dashboard on our website that shows live funding breakdowns, incoming applications, the status of applications, and approved grants.

What Is Approved and In-Progress

Concentrated Liquidity Vaults

• In collaboration with Quasar, we funded Define Logic Labs to build a number of decentralized asset management vaults for deploying strategies to Osmosis. 
• There are two categories of vaults that DLL will build for Osmosis – managed vault options for the top five pools on Osmosis by volume (two vault options, moderate plus and aggressive plus) and vaults for the top five “like pairs” (LST and Stablecoin pairs). These vaults will use a tight tick optimization strategy to maximize yield for like pairs.
• Within a few weeks of release, the first pools that DLL have developed already represent 4% of Osmosis TVL. Over the next few months, we will monitor DLL’s TVL and volume and evaluate their potential for the development of additional vaults. 

Newmetric

• Newmetric is building an all-in-one development platform that covers all your infrastructure needs from development to production, with an initial focus on improving RPC performance and scalability. 
• We were introduced to the founder Jesse by a member of the Osmosis team and immediately saw high potential in him. We had also recently uncovered much of the Cosmos RPC limitations in our discussions with Mystic Lab while they were building the Cosmos Snap. So we decided to fund Newmetric as we understood the importance of what he was building. 
• Newmetric is almost live with Osmosis mainnet and testnet support. While the product still has to be pushed into production and adopted, we've had many developers reach out to us for intros to Newmetric, eager to use their solution. Having reliable infrastructure is crucial for a great user experience. 

Margined Protocol

• Margined is developing a decentralized perpetual protocol on top of Osmosis. 
• After vetting the team, we decided to give them a grant as we thought they were well positioned to bring perpetual swaps to Osmosis, which are a crucial DeFi primitive that can be used for both speculation and hedging.
• One of its innovations is the use of concentrated liquidity pools to facilitate genuine price discovery, empowering traders to actively contribute to the market's information flow. This is a clear differentiator from other, oracle-based perpetual protocols.
• While the official on-chain deployment date is yet to be determined, Margined is currently testing their contracts on testnet after having undergone an audit with Oak Security, and has started the discussion in the forums to bring their contracts to Osmosis mainnet. 

Governance Module Improvements

• Considering the spectrum of decisions under the scope of governance, Osmosis and other Cosmos chains would greatly benefit from a more expressive governance framework. 
• We posted a public RFP calling for contributors to add Optimistic and Multiple Choice Proposals to the Cosmos SDK and, after evaluating a number of different teams, we decided to move forward with Binary Builders. 
• Once the features are developed, accepted and merged to main (expected by EOY), the SDK team will add the exact features to the v0.50 SDK fork maintained by Osmosis so that Osmosis can get the feature before the rest of the Cosmos SDK chains (with the release of v0.51).

Major Learnings

Focus is critical

• We increasingly believe that the top 10% of grantees are orders of magnitude more impactful than the others. 10x teams like Skip, Nabla, and Notional, among others, add an enormous amount of value – more than the rest of the grantees combined. 
• This power law means that we will continue to focus on teams we think can deliver long-term value to Osmosis. 
• It also means less funding of individual contributors without a reliable history of contributing as their chance to drive significant growth is less likely.

Ecosystem

• Since launching the OGP in 2022, we’ve funded a number of applications building on top of Osmosis to cultivate a strong ecosystem of applications that would contribute volume, revenue, and mindshare. 
• This is one area in which capital can be allocated more efficiently. Unfortunately, many of the applications we funded ultimately don’t have enough resources to compete with venture-backed startups, which has led to some teams dropping out or stopping entirely.
• We still think promoting the ecosystem is important, but recognize the need to take a conservative approach to doing so given current market conditions. As a result, in the past few months we’ve been focused on only funding extremely high quality applications on the ecosystem side, and will continue to do so going forward. 

Communication & Transparency

• Communicating and being transparent with the community is important, but not at the expense of efficiency or results. 
• When we went through the renewal process last year, we learned that the community thought our communication cadence wasn’t enough – they wanted a more live-action way of following what the OGP and its grantees are up to. 
• We agreed that these were valid critiques so we started doing monthly reports, quarterly reports, monthly calls with grantees, monthly office hours, and more. However, these take up an enormous amount of time collectively. We ask all our grantees what’s going on, aggregate it into consistent feedback, and present it to the community. 
• Over the next year, we’d like to focus only on the essential comms and transparency efforts, and decrease our focus on ones where there are very few readers or listeners. This includes focusing on quarterly reports, monthly calls with grantees, and highlighting our top performers. 
• This is not to say that we’ll stop our comms and transparency efforts – we’ll instead be focusing on highlighting the impact of the most successful grantees because ultimately that kind of publicity is what will allow Osmosis to gain mindshare and users. 
• We encourage you to reach out to let us know which avenues of transparency you've found most valuable, as well as whether there are any other ways you’d like to see us communicate with the community moving forward.

To Summarize

We're proud of what we've accomplished over the past 12 months. We had many successes and learned some lessons which will help us improve the ROI of the OGP going forward. There are also lots of exciting grants and initiatives which are still in progress, and we intend to see them through to completion and maximize their positive impact.

We’re always learning and iterating on how we run the program and what sort of initiatives we fund. If you have any thoughts or comments, please reach out to us on Twitter or Discord. We are very open to any feedback, critiques, or ideas.