Emeris is Here!
A look at the Emeris launch and the future of DeFi in the Cosmos ecosystem
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This week we're diving into the Gravity DEX Protocol and Emeris.
Gravity DEX
A DEX, or decentralized exchange, is a marketplace for buying, selling, and swapping assets without the need for a central authority. DEXs are vital to the health of an ecosystem by empowering decentralized finance (DeFi), or permissionless trading of assets that would otherwise require know-your-customer (KYC) or centralized exchanges (CEX) to regulate the sale. A DEX offers its end users permissionless swaps and incentivizes liquidity through swap fees and other rewards. In the case of Cosmos, active DEXs include Osmosis DEX and the Cosmos Hub.
Back in March, Cosmos Governance Proposal #38, a signaling proposal put forward by the Tendermint and B-Harvest teams, proposed adopting a liquidity module onto the Cosmos Hub. Thus, Gravity DEX was born.
Another Osmosis?
The Osmosis DEX was a revolution for DeFi in the Cosmos. As the first interchain DEX to offer swaps of native assets via IBC, Osmosis brought the IBC vision to life, while also offering huge opportunities for agile innovation in DeFi.
So, why does the Cosmos need two DEXs? Isn't Osmosis enough?
First, the DEX mechanism differs between the two. Gravity DEX protocol integrates a novel Equivalent Swap Price Model (ESPM), with batch order execution, to protect smaller volume users from front-running and price fluctuations. Gravity DEX also has order book capability, hinting at a coming feature. Dive into all of Gravity DEXs features here. Osmosis, on the other hand, is designed for experimentation. Everything is parametrizable, including, “swap fees and token weights in pools…even the curve algorithm and TWAP calculation.” Explore Osmosis’ experimental vision here.
Next, Osmosis uses its native $OSMO token to power the DEX, its swaps, and its base pair for most pools (some use $ATOM). Gravity DEX uses $ATOM as the base pair for most pools, although custom pools can be created for a price of 60 $ATOMs.
Finally, Osmosis offers rewards to liquidity providers in the form of liquidity mining. In simple terms, a large percentage of inflation rewards (45%) are passed out to liquidity providers on the Osmosis DEX to attract liquidity. Gravity DEX on the other hand, will need the support of $ATOM holders to determine how it will be incentivized since there is no new token (more below).
In summary, Gravity DEX brings an extremely robust and incredibly secure DEX to the Cosmos Hub, while Osmosis brings a cutting edge, experimental DEX that represents an innovation in Cosmos DeFi. Having two incredible DEXs in the ecosystem should not be seen as a bad thing. While the two could be seen as competitive, it is the end user that benefits from the competition. Both offer unique usage benefits, as well as arbitrage opportunities that will increase trade volume on both.
Emeris
Emeris was created by the Tendermint team, as an interface for the Gravity DEX, but also as much, much more.
Tuesday marked the official launch of the Emeris Beta. The launch is significant for the Cosmos HUB, Gravity DEX, and the larger Cosmos (and frankly all of crypto), but wasn’t without some hiccups.
A number of hours passed on Tuesday before the issues were resolved. If you were on Twitter or Telegram, you undoubtedly saw takes critical of Tendermint and their development team. While the frustration from the community was understandable (if a bit shortsighted), the Tendermint team has proven itself capable of shipping massive projects in the interest of the Cosmos ecosystem. If you only know one thing about the Tendermint team, it should be that. That they took extra precautions to be sure that a quality product without vulnerabilities was delivered IS A GOOD THING! And maybe, just maybe, a few weeks delay on a product designed to be used for decades to come is not such a big deal when you zoom out.
Interchain Wallet
Built into the vision for Emeris is the one-stop-shop for all things crypto. More than just catering to Cosmos tokens, Emeris will also be a functional wallet for BTC & ERC-20 tokens and will have a built-in fiat on-ramp and off-ramp (requiring KYC). As of now, Emeris supports Cosmos tokens and hosts a fiat on-ramp.
UI for Gravity DEX
Emeris offers an innovative and sleek UI for interacting with the Gravity DEX. Emeris allows users to swap tokens over IBC, or offer liquidity for a modest APY (more on incentives above).
Gravity Bridge
Straight from the Cosmos Hub Roadmap 2.0, a planned Gravity Bridge will be launching in Q4 of 2021. This will allow the free flow of erc-20 tokens from Ethereum onto the Cosmos Hub and into the Gravity DEX. Emeris plans to have support for wallets on both sides (erc-20 and cosmos tokens) as well as the continued UI for Gravity DEX, which will have erc-20 tokens included and able to swap.
Emeris brings great value to $ATOM and the Cosmos. Imagine someone just getting into crypto, looking for a wallet that can hold BTC, ETH, erc-20s, and Cosmos tokens. They’ll probably download the Emeris mobile app (releasing in September), use the fiat on-ramp, and make swaps using the native UI for Gravity DEX.
Pretty slick, eh?
Wen Liquidity Incentives?
With Gravity DEX up and running via Emeris, the next step is to build liquidity.
While Osmosis has the $OSMO token that can funnel inflation into liquidity incentives, Gravity DEX’s native token is $ATOM. No liquidity incentives were natively included at launch, but LPers may still receive swap fees in reward for their liquidity.
Going forward, since Gravity DEX is built on the Cosmos Hub, $ATOM holders can choose to incentivize the Gravity DEX pools however they wish, via governance proposal. Currently, no such proposal exists, but there are rumors that one will be brought up in the near term.
To kickstart Gravity’s liquidity, the Tendermint team are LPing their own $ATOMs - approximately 10% of their stack were unstaked in order to LP.
Cosmos Ecosystem Happenings/Announcements
Emeris official launch announcement,
Osmosis continues to shine in TVL
Althea Network announced the creation of a separate Gravity Bridge Blockchain, sparking large debate, while the Hub continues work on their own Gravity Bridge
Resources and Recent Discussions
Gautier Marin, Tendermint's product director, shared a detailed introduction to Emeris AND hosted a helpful Reddit AMA on the subject.
Daniela (aka Catdotfish) published this step-by-step tutorial on how to get up and running on Emeris.
Cryptocito proclaimed a coming 'airdrop season' for Cosmonauts in a new Youtube post.