A group of decentralized finance (DeFi) protocols have come together for Cosmos. These teams include cross-chain bridge protocol Wormhole and liquidity aggregator Swing. There is also the lending protocol Tashi and the Cosmos network Evmos. This move aims to solve the liquidity problems of the altcoin project
4 DeFi protocols lend a helping hand to Cosmos
Wormhole will register five new bridged tokens for use on Evmos, according to statements from two of the teams involved. These altcoin tokens are: Tether (USDT), USD Coin (USDC), wrapped Ether (wETH), wrapped Bitcoin (wBTC) and Solana (SOL). A Wormhole governance vote on this part of the proposal began on September 19. Currently, the proposal enjoys almost unanimous support. Once the tokens are launched on Evmos, they will be applied to the Swing protocol. This will allow users to send to Evmos from any network that Swing supports, including BNB Chain, Polygon, Fantom, and others.
Tashi will also implement Swing into the user interface. Thus, it will allow users to bridge cryptocurrencies and deposit them as collateral with minimal button clicks. Using this collateral, users will then be able to borrow Cosmos-based or Ethereum-based altcoins, exchange the loaned coins with others, deposit them into liquidity pools, or perform other common DeFi transactions.
Title: Tashi user interface. Source: TashiLiquidity is needed to solve the crisis in the altcoin project!
According to representatives from both Swing and Tashi, the integrations are ready to go live. They are just waiting for the Wormhole proposal to be passed and implemented. Voting on the proposal will end on September 24. This means that the new liquidity system should be implemented shortly. Tashi co-founders Lindsay Ironside and Kristine Boulton claim that the new system is needed to solve the liquidity “crisis” in the Cosmos ecosystem. In this context, Boulton makes the following statement:
We have this Blockchain that continues to provide these incredible opportunities. But no one uses it. Because they cannot find liquidity there. But Wormhole, I think they’re in 29 different chains now, so it’s an opportunity to solve this crisis.
Where does the problem with Cosmos lie?
Lindsay Ironside states that after she first started using the Cosmos ecosystem, she felt that a new system was needed. He had a bad user experience the first time he tried to exchange USDC for Cosmos (ATOM) and send it to Evmos. To obtain ATOM, he first had to bridge his USDC to Cosmos Hub. But when USDC entered the network, it did not have the ATOM to pay the gas fee to execute the swap.
According to Ironside, this experience made the altcoin team realize that they needed to focus on this problem. “It was a big deal coming in as new users […] trying to understand where the solutions to these problems were,” Ironside notes.
How will the latest move solve the problem for the altcoin project?
Swing CEO Viveik Vivekananthan agrees that the new system will potentially solve these problems. If a user wants to exchange USDC for a different altcoin on Evmos, Swing will convert a small portion of the sent coins into Evmos’ native coin. The user will then spend this coin on gas to complete the exchange. Vivekananthan says that in this way, it is possible for users to log in to Evmos using any supported coin.
The Cosmos community is working hard to attract users with new features in 2023. Cosmos-based blockchain Noble launched a local version of the USDC stablecoin on March 28. Also, as you follow on Kriptokoin.com, Cosmos Hub implemented liquid staking on September 13. However, the ecosystem is also facing a competitor in the form of Optimism Superchain, which is trying to create an interconnected blockchain network with features similar to Cosmos.
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