In the first half of 2024, the Osmosis Grants Program has made substantial strides. This year has witnessed key shifts in program’s management, including changes in roles and the appointment of new program leads. This semi-annual report aims to summarize the work completed so far in 2024, update the community on management and operations, and provide a status update on grants.
Funding Breakdown to Date
In the first half of 2024, we continued to strengthen Osmosis by approving 13 grants across 5 batches, allocating a total of $1,609,480. This brings our cumulative funding to $5,344,522 since the program’s inception, supporting 99 diverse projects aimed at enhancing Osmosis and its ecosystem.
Batch 20 focused on enhancements to Osmosis tax reporting and economics. The Incentive Optimization Working Group, led by Hathor Nodes, received funding for their ongoing efforts to refine Osmosis’s liquidity management strategies. Their previous work has successfully reduced daily liquidity incentives by approximately 9,000 OSMO, demonstrating significant cost savings. Thanks to the Hathor Nodes grant, Osmosis successfully saved an additional 2.6 million OSMO in emissions during the first half of 2024, for a total of 3.6 million OSMO saved by the working group so far. Additionally, the batch supported Defiant Labs in updating and maintaining Sycamore Tax, a tool essential for simplifying crypto tax compliance for Osmosis users. These grants ensure sustained efficiency and functionality, supporting both the financial health of Osmosis and the user experience.
Batch 21 focused on tooling, research and education. The Mesh Security Front End grant, in partnership with the Nabla team, supported the development of a robust front-end security interface to offer the best user experience once Mesh Security goes live. Additionally, the IBC Rate Limit Improvements grant enabled Range to create a subdao for managing Osmosis’s asset flow rates, supported by an upgraded dashboard for real-time adjustments. Celatone 2024 Support ensured the continued development and maintenance of the Celatone explorer, vital for community and developers. Furthermore, the Cosmoverse Headline Sponsorship established Osmosis as a principal sponsor for the 2024 Cosmoverse conference. This elevated Osmosis’ visibility and deepened its involvement within the community. By facilitating workshops and presenting keynotes, Osmosis reinforced its position as a key player in the Interchain.
Batch 22 showcased a diverse range of initiatives to enhance the Osmosis ecosystem’s user acquisition and security. The grant for Start.cooking, developed by Big Labs, funded the creation of an App to create tokens and memcoins via the Token Factory Module. In security enhancements, the Osmosis Smart Account Co-Signer, in collaboration with Blockaid, was established to safeguard against malicious transactions through an off-chain cosigner mechanism that screens and requires additional authentication for suspicious activities. Additionally, another grant supported the development of a CosmWasm Developer Adoption Portal by B9Lab, aimed at fostering CosmWasm education and developer onboarding through a comprehensive, multi-media enriched educational portal. Lastly, the Frizzante team received funding for an audit to ensure robust security for its yield tokenization application, which would simplify yield access within the Interchain.
Batch 23 funded Fractal, a first-of-its-kind NFT fractionalization and tokenization platform on Osmosis, which allows NFTs to be converted into fungible tokens, enhancing liquidity and creating new trading dynamics between existing NFT marketplaces like Stargaze and Osmosis. OGP also funded the development of the Alloyed Asset dashboard, an analytical tool that provides detailed insights into Alloyed Assets. This dashboard aids users and contributors in making informed decisions by visualizing essential data such as market cap, asset composition, and historical transactions.
Batch 24 aims to strengthen the relationship between Osmosis and Fireblocks, a prominent crypto asset technology provider, to enhance secure asset management for institutions and large crypto holders. This grant extends the partnership by funding three additional years of Osmosis support, enabling institutions to self-custody and securely transfer OSMO. Recognizing the importance of robust, enterprise-grade infrastructure for regulatory and operational security, this initiative is crucial for retaining and expanding institutional interest in OSMO. The agreement, discounted to $150,000 annually from a previous $250,000, underscores Osmosis’s commitment to fostering long-term relationships with key financial actors, ensuring stability and growth in the Osmosis ecosystem through successive market cycles.
Funding Amount by Category
Tooling is the category that received the most funding over the past semester, accounting for 69.3% of the total funding. This significant allocation reflects our strategic investments in enhancing Osmosis’ operational experience, including the Blockaid grant to improve security, and the Fireblocks partnership, which received a substantial grant for a 3-year term to offer OSMO access for institutional users. The focus on tooling emphasizes our commitment to providing robust solutions that offer both security and efficiency, crucial for maintaining user trust. This strategy highlights our current focus on strengthening the core functionalities and infrastructure of Osmosis rather than expanding into new or ancillary projects in accordance with the OGP’s updated mandate for the 2024 term and beyond. This strategic decision aligns with our objective to solidify Osmosis as a leading platform in the DeFi space by enhancing its foundational components and ensuring a high level of performance and security for all users.
Communication and Transparency
During the first semester, there are several important points that we need to communicate to the community, reinforcing our commitment to transparency. This practice not only fosters trust but also encourages active participation and feedback, which are vital for our collective growth and improvement.
Robo compensation:
In response to the growing responsibilities Robo has taken on within the Osmosis Grants Program, an adjustment to his compensation has been proposed and agreed upon. Robo’s pivotal role in managing interactions with the reviewer committee, overseeing legal and KYC processes, and handling payments has made it clear that his initial salary did not adequately reflect his contributions. To address this, program members Kam and Max, along with contributor Reverie, have collectively agreed to each contribute $1,000 from their own monthly salaries to increase Robo’s compensation. As a result, Robo’s salary has been raised from $4,000 to $7,000 per month, while Kam, Max, and Reverie’s compensation has been reduced by $1,000 each. This adjustment not only better aligns Robo’s salary with his responsibilities but also underscores the team’s commitment to fair and reflective compensation practices. This decision highlights the supportive culture within the Osmosis Grants Program, where adjustments are made to ensure that dedication and extensive efforts are justly rewarded.
Note: The total funding allocated to contributor compensation has not been changed due to this adjustment.
Lemma Solutions:
During a recent review of the OGP financials, an overpayment discrepancy was identified in the compensation issued to Lemma Solutions. According to the original OGP v3 renewal proposal, Lemma Solutions was contracted to receive 2,000 USDC monthly for a year, from January to December. However, starting in March and continuing through July, payments were erroneously issued at a rate of 4,000 USDC per month due to a misinterpretation of the agreed monthly amount, resulting in an inadvertent overpayment. Because of this overpayment, the total amount paid to Lemma to date amounts to 24,000 USDC, an amount equal to the sum to be paid to Lemma over the course of the entire 2024 term. After discussions with the reviewer committee and Lemma Solutions, all parties agreed that further payments would be halted for the remainder of the agreement period, rather than seeking a refund from Lemma Solutions. This approach aligns with the total annual payment due under the contract, and Lemma Solutions has agreed to this resolution.
Market Making Initiative:
The renewal included a mandate to allocate 7M OSMO towards liquidity operations with the goal of improving OSMO liquidity across the ecosystem. The OGP has since deployed 5.5M of the 7M OSMO allocation across three liquidity providers to provide liquidity on centralized exchanges (CEXs) and Osmosis DEX pools. The existing engagements are described below:
- Amber
- Loan Amount: 3,000,000 OSMO
- Term: 12 months
- Strategy: Liquidity support on popular Osmosis DEX pools, with a focus on Alloyed Asset pools including allBTC and allETH.
- Wintermute
- Loan Amount: 2,000,000 OSMO
- Term: 12 months
- Strategy: Liquidity support on popular Osmosis DEX pools, including ETH/USDC, SOL/USDC, WBTC/USDC, and DYDX/USDC
- Pulsar
- Loan Amount: 500,000 OSMO
- Term: 12 months
- Strategy: Liquidity support on popular CEX venues, including Binance, Bitget, Coinbase, KuCoin
The OGP is now regularly reviewing reports provided by each provider to monitor performance and KPIs as part of our SLAs. We are also in the process of reviewing opportunities to deploy the remaining 1.5M OSMO with new providers across different strategies.
Current State of the OGP
We share a breakdown of our current assets, liabilities, and expenses below.
Multi-sig
Total OSMO: 2,627,135.15
Total USDC (Noble): 615,723.75
Total axl.USDC: 39,945.04
Gnosis Safe
Total USDC: 1,840,090.18
Funding
Total funding approved: $1,609,480
Total funding paid out: $598,045 or 37% of total funding approved
Funding due at grant completion: $1,041,302, or 65% of total funding approved
Operational Expenses
The table below details our operating expenses over the past semester, totaling $167,000 for the 6-month period.
Updates/Changes to the Current Grants
Incentives Working Group by HathorNodes: With the remaining members of the working group, Hathor has continued to fine-tune the incentive optimization algorithm in accordance with the requirements set forth in the grant. Because of these adjustments, Osmosis has saved an additional 2.6 million OSMO in emissions in the first half of 2024 (worth appx. $3 million USD at the time of emission or $1.3 million USD at current prices), for a total of 3.6 million OSMO saved by the working group so far. Hathor has nearly completed changes that would see Osmosis transition to a bootstrapping incentives model, which will have the impact of saving an additional 1000+ OSMO in incentives per day. The model is currently being finalized, and the new bootstrapping incentive mechanism is expected to be proposed to Osmosis governance in September.
Celatone 2024 Support (through end of March 2025): Following the recent acquisition of Celatone by Initia, some questions arose regarding the status of the grant. After discussions with the Celatone team and in consultation with Initia, it has been confirmed that Celatone will continue to support Osmosis for the originally agreed-upon period.
