A coalition of decentralized finance (DeFi) platforms has come together to address liquidity issues within the Cosmos ecosystem. The collaboration involves Wormhole, a cross-chain bridging protocol; Swing, a liquidity aggregator; Tashi, a lending protocol; and Evmos, a part of the Cosmos network.
Based on statements from Wormhole and another team involved, five new tokens will be bridged to be used on Evmos: Tether (USDT), USD Coin (USDC), Wrapped Ether (wETH), Wrapped Bitcoin (wBTC), and Solana (SOL). A governance vote by Wormhole on this proposal started on September 19 and has garnered nearly unanimous backing.
Upon their introduction on Evmos, these tokens will be integrated into the Swing protocol, facilitating transfers to Evmos from any network supported by Swing, including BNB Chain, Polygon, Fantom, and others. Furthermore, Tashi will incorporate the Swing protocol into its user interface to streamline the bridging and collateralization process, enabling users to easily take out loans in either Cosmos or Ethereum-based tokens.
Both Swing and Tashi representatives indicate that these integrations are set to launch once the Wormhole proposal is approved and implemented. The vote on the proposal concludes on September 24, suggesting that the new liquidity solutions should be operational shortly thereafter.
In an interview with Cointelegraph, Tashi co-founders Lindsay Ironside and Kristine Boulton highlighted the urgency of resolving the liquidity “crisis” in the Cosmos ecosystem. According to Boulton, the platform offers exceptional opportunities but struggles with adoption due to liquidity constraints. She noted that Wormhole’s existing presence on multiple chains could remedy this situation.
Ironside shared her experience of using the Cosmos ecosystem for the first time, explaining how she faced issues swapping USDC for Cosmos (ATOM) and transferring it to Evmos. She said this experience underscored the need for a solution to these challenges, especially for newcomers.
In a separate conversation, Swing CEO Viveik Vivekananthan agreed that the new setup aims to solve these issues. To facilitate swaps, Swing will convert a small amount of transferred tokens into Evmos’ native coin to cover gas fees. Initially, Swing will facilitate token bridges primarily from non-Cosmos networks to Evmos, with plans to add intra-Cosmos network bridges in the future.
This initiative comes as the Cosmos community actively introduces new features in 2023 to attract users. For example, the Cosmos-based chain Noble recently launched its native USDC stablecoin, and Cosmos Hub introduced liquid staking. However, Cosmos faces competition from the Optimism Superchain, which aims to create a similar interconnected blockchain network.
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