Osmosis’ Success since launch is a strong indicator of it’s future.

Osmosis is the first DEX in the Cosmos Ecosystem. Aside from it’s amazing average pool APR, which is around 150% APR. Osmosis’ true value comes from it’s sophisticated technology, strong development team and amazing community. Osmosis currently allows free, feeless transactions on it’s dApp. It also has a daily payout of rewards from all your Pools. This means that with the average 150% APR, you can realistically see 346.79% APY! This is assuming you compound your daily rewards. Remember APY percentage is calculated with APR and compounding frequency. Because of the lack of fees, this means regardless of the reward quantity you can compound it absolutely free. While an APY of over 300% is extremely impressive. There are a quite few pools on Osmosis that have possible APY’s of over 1000%!

Osmosis has had a really amazing performance since it launched in June 2021. The success of which will likely be a ripple turning into a tsunami. What follows is only my personal SPECULATION in regards to the future of this project, it is not fact. If you aren’t already invested in Osmosis then you should highly consider it. Aside from it’s potential future value, Osmosis is currently full of amazing rewards for Liquidity Providers. Not only that, but it’s APR on staking is over 100%!

Year 1 – Genesis Year

Luckily all of us are still able to adopt this platform in its ‘Genesis Year’. I believe for the majority of the year we will see a consistent > 200% APR. Anyone LPing during this year is going to see major ROI from yields alone, the price of OSMO won’t rise significantly, the tokens are still being given out left, right and center, I don’t think we’ll see a price greater than $5 this year. My advice for anybody LPing during Genesis Year, Compound! By compounding your yields you are earning more daily, like a rolling ball of snow, growing exponentially larger each day.

Year 2 – Mainstream Adoption

Osmosis will have brought many returns to it’s early adopters, having earned 45% of token drops through LP incentives. OSMO will have it’s first “thirdening”, the price of OSMO will rise due to the decreasing supply, more people begin to adopt the token for the “FOMO” – Fear Of Missing Out. After seeing the returns made by Genesis LPer’s people are going to try and jump on board as quickly as they can. The APY on LPing will plummet likely as far as ~100%, Genesis LPers will se a 50% decrease in their daily rewards, and this may seem like a negative, but it’ll be offset by the increase in price, most likely OSMO will reach ~$10 by Q4 2021, or Q1 2022.

Year 3 & Beyond

APR will continue to dwindle most likely reaching an APR somewhere between ~ 10% – 25%. OSMO token supply continues to decrease as “thirdenings” continue, the price of OSMO will continue to rise as the “FOMO” begins to reach it’s peak. The entire Crypto market at this point will be looking bullish, and OSMO will see a significant price hike. After the conclusion of Year 3 I don’t believe we’ll ever see an APY of anything above ~50% on OSMO/ATOM. Yield Farmers should look to other pools for significant yields. Those who have continued to compound their rewards from Year 1 should be seeing significant daily returns. At this point I would suggest you cash out returns, compounding them will see more gains but at this point you would likely make more profit from cashing out the returns and reinvesting them into another pool / index / etc.  

In Conclusion

That’s my take on the near future for the Lab. Keep in mind that the success of Osmosis also contributes to the value of ATOM. Both OSMO and ATOM will rise in price relative of each other due to their connection. Impermanent Loss in a OSMO/ATOM pool should be minimal. But that will always be a risk in yield farming. I don’t believe that ATOM or OSMO will see huge price pumps like BTC or ETH, I believe those days are over for crypto, with the number of coins on the market. But they will be successful.

If you’re interested in making the most out of Osmosis, then check out our list of Osmosis’ best Liquidity Pools!

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