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In a groundbreaking development, a proposal has surfaced within the Osmosis community. It seeks to forge a powerful collaboration between Terraform Labs (TFL) and Osmosis. Combining $1 million $LUNA from TFL and 575,000 $OSMO from the Osmosis Community Pool is remarkable. Creating a huge liquidity pool for the $LUNA/$OSMO pair on Osmosiszone will improve Terra’s collaboration with Cosmos.
1/ A proposal to match $1M in $LUNA from TFL with 575K $OSMO from the Osmosis Community Pool to establish a deep $LUNA / $OSMO pool on @osmosiszone has just been posted on the Osmosis gov forum.
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) January 19, 2024
Join the discussion on the forum, or keep reading 🧵⤵️https://t.co/IsxrAFLr6u
Osmosis Aims to Transform Trading with $2M Liquidity Initiative
Many DeFi users utilize Terra and Osmosis, thus their communities have long overlapped. Decentralized trading platform Osmosis traded UST and LUNA (now LUNC) between 2021 and 2022. The recent StationWallet v3 rollout improved ecosystem cooperation.
The proposal matches OSMO from the Community Pool with $1 million of Terraform Labs’ LUNA for one-sided liquidity. A strategic alliance intends to make Osmosis a critical link between Terra and the Cosmos. Increased Osmosis trading should raise OSMO staker fees.
Osmosis has liquidity issues because two pools a conventional LUNA/OSMO pool and a highly active LUNA/USDT pool restrict LUNA liquidity. These pools lack liquidity for LUNA-Cosmos interchain swaps at $23,000.
To fix this and integrate Terra into Cosmos markets, TFL suggests pairing 1.4 million LUNA with 575,000 OSMO from the Osmosis Community Pool. This project seeks to create a $2 million Osmosis LUNA/OSMO token pool. This ensures liquidity for Osmosis LUNA’s main trading platform.
Osmosis’s liquidity match should strengthen its Terra-Cosmos asset trading function. Due to Osmosis’ increasing trading, OSMO token holders will pay more. Enhancing Terra’s liquidity link to Cosmos makes Osmosis and Terra applications easy to use. This integration intends to make using many apps in both ecosystems easy for users.
Osmosis Community and Terraform Labs Strengthen Ties for DeFi Advancements
The Community Pool funding would send OSMO tokens to a multisig wallet of Osmosis and Terra contributors and community members. This wallet will hold both parties’ money for a year. After this period, the Osmosis Community Pool and TFL multisig will split the liquidity value if you terminate or shrink it.
Similar to Terraform Labs’ Station v3, a user-friendly multi-chain wallet, Osmosis is ambitious. This integration simplifies Osmosis access for Station users, strengthening the two communities. Terraform Labs and Osmosis’ partnership increases Terra and Cosmos ecosystem finance and collaboration. It might boost Osmosis’s position as a major transaction and trade facilitator in the dynamic and linked blockchain environment.