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Revolutionizing DeFi: Umee and Osmosis Join Forces to Create the Ultimate ‘Cosmos Hub


Cosmos-based networks Umee and Osmosis will merge via a software upgrade, according to a Dec. 4 announcement. Umee’s UX Chain code will be reimplemented on the Osmosis chain, allowing features of the two networks to be combined and creating what the development teams call a “DeFi Hub” for the Cosmos ecosystem.

Umee user interface. Source: Umee

Umee is a decentralized lending protocol that runs on its own dedicated Cosmos chain called “UX Chain.” Osmosis, on the other hand, is one of the largest decentralized exchanges (DEXs) in the Cosmos ecosystem, also running on its own dedicated network. It has over $23 billion in cumulative volume and is the fourth-largest Cosmos chain in terms of total value locked (TVL), according to DefiLlama. 

According to the announcement, the development teams behind the protocols agreed to combine the two networks, allowing the lending app and DEX to exist on the same chain. The teams claim this will enable advanced features on the exchange that were previously not possible, including spot margin trading, shorting, liquidations, stablecoin pools, interchain flash loans, MEV markets and others.

“The combined architecture of both chain functionality will open up the door for flash loans and new forms of MEV on the same DeFi Hub,” said Osmosis co-founder Sunny Agarwal, adding, “We originally thought of flashmint via protorev for multiple types of cross chain arb, and realize[d] a lending protocol on the same chain would further optimize this vision.”

Related: Cosmos Hub greenlights ATOM inflation cut for security boost

The announcement did not state a specific date for the merger. Instead, it urged users to “be on the lookout for more updates.” UX, the Umee UX Chain token, “will still exist,” CEO Brent Xu clarified in a statement to Cointelegraph. The development team will make a proposal that “will have a call to action for the community to discuss and decide on how to manage the tokenomics” of UX, Xu stated.

Osmosis implemented a concentrated liquidity feature for the first time on July 12. On Oct. 3, it announced that it would allow a bridged version of Bitcoin (BTC) to be traded on the exchange.