Osmosis DAO, a Decentralized Autonomous Organization, has shown its support for a proposal to implement a zero-fee Bitcoin bridge to the Cosmos ecosystem through Nomic. This initiative has garnered a significant amount of community backing, with 92% of DAO members in favor of the zero-fee upgrade. This move aims to eliminate bridging fees and transfer fees for nBTC transactions between Nomic and Osmosis, enhancing the user experience and encouraging more participation in DeFi activities.
Traditionally, bridges have faced challenges in capturing value directly from deposits and withdrawals. However, the new revenue share proposal by Osmosis sets a different business model by aligning Nomic’s protocol revenue with the usage of its Bitcoin bridge. This model will replace bridging costs with a share of taker fees generated from trading activities on Osmosis, benefitting Nomic from the increased adoption of nBTC across various applications on the platform.
This user-centric upgrade is expected to allow users to utilize their Bitcoin assets for lending, borrowing, staking, and other DeFi activities on Osmosis. By integrating Bitcoin into the broader DeFi ecosystem, the platform aims to attract new users and provide existing users with more opportunities to engage in decentralized finance.
Sunny Agarwal, the co-founder of Osmosis, expressed his excitement about the proposal, highlighting it as a significant milestone in DAO-to-DAO transactions. He emphasized the unique business model that this proposal introduces, made possible by appchains, which may be challenging to replicate in generalized blockchains.
The decision to implement this zero-fee Bitcoin bridge comes on the heels of Osmosis experiencing substantial growth in trading volume in the fourth quarter of 2023. The platform saw a six-fold increase in trading volume, surpassing $5.3 billion, attributed to the introduction of new features like volume-splitting incentives, recalibrated epoch incentives, and the targeting of liquidity towards high-traffic areas.
Overall, the zero-fee Bitcoin bridge proposal by Osmosis DAO represents a significant step towards enhancing the DeFi experience for users and promoting the adoption of Bitcoin within the Cosmos ecosystem. By eliminating fees associated with transactions and introducing a revenue share model, the platform aims to create a more inclusive and user-friendly environment for decentralized finance activities.