The collaboration between Osmosis and the UX chain will focus on addressing potential security vulnerabilities and shared liquidity to enhance growth prospects.
The ultimate growth of blockchain technology has been pegged to the multi-chain capabilities, whereby the Cosmos (ATOM) network has described it as blockchain 3.0. In the context of multichain capabilities, Osmosis (OSMO), a leading decentralized exchange (DEX) on the Cosmos ecosystem with more than $128 million in total value locked (TVL), has announced plans to merge with UX Chain, a layer one blockchain on the Cosmos formerly known as UMEE. Notably, the merge proposal was adopted to enhance their network security and simply the respective token ecosystem. Moreover, the two protocols joined together have a higher synergy that is crucial to their long-term success.
“This proposal to merge the Umee UX DeFi experience into the Osmosis chain would enable some really powerful new features and functionalities for our users – and we’re excited to continue our collaboration with UX Chain with what the community decides is best,” Osmosis co-founder Sunny Aggarwal said.
Closer Look at the Osmosis and UX Chain Merger
According to the proposal, the UX Chain is expected to transition its source code development process to the Osmosis network in several stages. As a result, all the superior products of the UX Chain will be available on the Osmosis network, thus providing their customers with a more robust decentralized financial (DeFi) environment for a more efficient web3 experience. Moreover, the merger will bring together the total value locked on both networks, which is crucial in onboarding mainstream investors to the web3 space. As for the respective tokens, the merger proposal noted that it will take some time before integration to ensure due diligence and more analysis is conducted.
“Each chain will have a separate governance vote from each blockchain network. The community governance will manage the processes separately for each network toward achieving consensus around the end goal of creating the DeFi hub,” Brent Xu, co-founder of UX Chain, noted.
Some of the highlighted benefits of the merger is the fact that the UX codebase can now be used as a leverage feature for Osmosis spot margin trading. Other highlighted benefits that come with the merger include; streamlined liquidations, seamless shorting of crypto assets, robust stablecoin combination via the meToken, Interchain flash loans, and multiple MEV markets.
The respective communities are expected to vote on the future of existing tokens in a bid to consolidate liquidity and improve overall security.
Following the announcement, the UX token gained more than 20 percent in the past 24 hours to trade around $0.0039 on Monday. The Osmosis network, on the other hand, gained nearly 83 percent in daily traded volume to about $12.2 million. Notably, OSMO price hovered around 73 cents on Monday, up more than 67 percent in the past four weeks.