For those who don’t yet understand the crypto financial system I must take a moment to carve out the path for Cosmos (ATOM.)
I have long been a fan of Cosmos because I saw early on that it was going to be the backbone of the new financial world. When I say Cosmos, I refer to the crypto ATOM and although it hasn’t yet seen a giant upwards price push as of this article writing, I do think it will come eventually and suddenly. Though this isn’t why I write about Cosmos and it’s benefits.
For those who don’t yet understand the crypto financial system I must take a moment to carve out the path for Cosmos (ATOM.) First off I believe their choice of the Cosmos name is apropos. As I think back on the 1980’s Cosmos documentary I can hear Carl Sagan explaining in simplistic yet extravagant detail about the Cosmos and all it contains. Truly, this new digital era needs a backdrop of such vastness to contain it, something that will make sense of it all and wrap it up in a nice pretty bow. This is what the Cosmos ecosystem aims to do and it is governed by the ATOM token.
Planetary systems have such similarities to the crypto financial ecosystem. Although this may seem out of left field, I believe the Cosmos creators somehow knew this before they dove in. Think about the different types of cosmic bodies: you have moons, stars, galaxies, planets, comets, asteroids, and many other random collections of atomic masses. Think about these as layers from biggest to smallest or from densest to lightest.
First you have galaxies. These are large and can contain any number of things. Focus next on Solar Systems complete with a star (or set of stars) and planets hurdling around the center of the gravity vortex made up of the dense star(s) generating the gravity. And finally planets of all types, with their moons and their moons’ moons… This amorphic symmetry is what keeps us whirling through the universe at super high speeds while we humm away at our super small circle of life.
Now lets take to the cryptoverse. Similar to the universe, the cryptoverse has all within it. Anything crypto is contained within the cryptoverse, whether it’s a twitter account for a crypto influencer or a million dollar pension fund buying it’s first BTC – it’s all within the known cryptoverse.
When considering each network, imagine those as solar systems. We’d have one Bitcoin solar system, another Ethereum solar system, still another Avalanche solar system… all with their own features… you get the idea… Within each of these solar systems there are many types of planets. For example, in the Avalanche (blockchain) solar system there is a (protocol) planet called Wunderland with a (crypto asset) moon called TIME and within Ethereum’s solar system there are super complex (sub chains) planetary systems, one called Polkadot (DOT.)
It’s not important to know these projects in order to understand this larger concept – but it takes us back to the start. The Cosmos ecosystem encompasses EVERYTHING that was already mentioned above and anything else you may hear of in the future. They aim to be The Internet of Blockchains – the place where one can go to do nearly everything crypto. Just how can they do this? And why didn’t Cosmos (ATOM) come first?
It’s no secret that Cosmos claims to be the crypto everything as it’s been their mantra since they started. Their intentions weren’t to create the next big coin to pop and drop. Instead they set out to be founders of this new crypto space. Their goals were not to birth everything but instead evolve on the sidelines and absorb everything as it was being born.
The Cosmos development team set out on the ambitious goal to build everything that exists within crypto into protocols that they can use to make their systems more robust. They have completed many of their initial goals. With a cosmos wallet, not only can one hold assets on multiple blockchains, but one can actually interact with multiple blockchains all at once without needing to segregate their funds into dozens of wallets. All assets locked inside Cosmos’ ecosystem are on DEFI natively, so there’s no need to muck with anything to get to the next stage of crypto.
Onboarding your assets into DEFI is as simple as opening a cosmos wallet and transferring them in.
There is a LOT that went into getting the Cosmos ecosystem ready for prime time and I have to imagine that once they set up such a demanding development cycle, claiming they will do everything for everyone, I suspect their abilities to control other projects were minimal. Their saving grace is in the nature of the space. By default, development in crypto is almost always open source.
Due to the open source nature, all code from other prominent projects was shared in real time, so Cosmos didn’t need to be first, they just needed to adopt everything else that was being developed into their model. Their goals began at the base level, first adopting main blockchains (like Ethereum) and on a protocol level and therefore being able to interact with the blockchain natively. So not only is Cosmos able to hold main assets from other blockchains, but it is also able to facilitate interaction with digital contracts. This allowed them to grow and add more.
Just like a black hole, Cosmos attracted all the projects of worth and built their ecosystem to contain, nurture, and grow with each of the supported blockchains. This is a more long-term focus as this type of growth is conducive to a “set it and forget it” mentality; once they build to the lowest common denominator they are able to easily scale certain solutions on demand.
Cosmos didn’t need to come first, they just needed to develop a core that was extremely flexible and able to have anything snapped onto it.
If you’ve read this far hopefully you are interested in learning more but, in truth, as with most things crypto, we are the beneficiaries of all the developers’ hard work. As they announce and roll out newly supported ecosystems, Cosmos is offering airdrops to the masses as a way of easily onboarding them into these ecosystems via the Cosmos product offerings. I’m here to explain these various airdrops and let you know how you can claim them.
Just a quick tangential note to those who are unfamiliar with the term “airdrop”: an airdrop is when a group of crypto assets are set aside to gift to the public. Sometimes you’ll need to post something on twitter or register to a new site to receive an airdrop. For others you simply need to know how to be in the right place at the right time.
As a practice, I don’t participate in ANY airdrops that require me to do something. If I get an airdrop without revealing my defi address to anyone, that’s the kind I like.
First off, I cheated and here’s the link I have pulled this information from. It seems as if this link might be updated over time, so the information below does not represent the total value of these airdrops. It’s my guess that over the next 12-18 months we’ll see more and more airdrops for those involved in the Cosmos ecosystem, so the earlier one does these first few steps the better they are.
First off, if you don’t own any ATOM, buy it. This isn’t financial advice, but practical advice to anyone wishing to claim airdrops. I believe the more ATOM one owns the more airdrops one would qualify for. If you look at my cheat sheet linked above you’ll see many airdrops haven’t yet come and you still may qualify for those if you purchase new ATOM tokens now.
And if you own ATOM, there is no reason NOT to stake it. I have staked about 75% of my ATOM since I purchased it in Exodus. This is something that is SUPER easy to do via Exodus.
No matter if you own ATOM or if it’s staked I believe some of the Comos airdrops will work for you.
It’s not first on the list, but it’s first in my book. This OSMOSIS wallet that Cosmos built is not only quirky and interesting to look at but extremely powerful. It has several layers of usability baked into several applications serving everything from easy liquidity farming to staking on multiple networks.
In general, Keplr is a browser extension (similar to Metamask) available on most browsers, but I always recommend using Brave as that’s the most secure crypto browser out there as of now.
Just like installing any other crypto wallet, Keplr will generate a seed phrase that you MUST keep. Losing this seed phrase means you will lose all of the crypto in your wallet.
Once you visit the Osmosis Zone you’ll need to authenticate into Keplr and connect both wallets together which will allow your assets to be shared back and forth. The Cosmos team has made it super simple to claim the OSMO airdrops. Just go to this page: https://app.osmosis.zone/airdrop and you will see step by step instructions.
There are some weird rules on holding ATOM (since Feb 18th, 2021) that may prevent some folks from receiving the below airdrops. But for anyone who is reading, please consider that the airdrops aren’t the real reward. The airdrops are great, but ultimately one should be after the yields as they are sometimes over 100% annually. This means in some cases you’d double your investment every year. These rates aren’t going in an upwards direction, so join now while you can!
Back to the airdrops, basically, in order to claim the Mission #0 airdrop, you’ll need to load in the wallet that held your ATOM since Feb 18th, 2021 (I suspect that Mission #0 must be claimed before the other Missions open up).
In order to claim Mission #0 you need to pre-load the wallet that held ATOM. In order to do this you’ll need your private keys for your ATOM wallet.
I used Exodus to stake my ATOM well before this date and there’s an easy way to get any of your private keys for any Exodus wallet.
In the top right of any asset within Exodus, you’ll see a sideways ellipsis. When clicked this should open a mini window with proper actions for each blockchain. You’ll see “view private keys” in all the assets. When you click it will ask you for your Exodus password, then show you your private key.
Be VERY careful with this series of random letters and numbers as this is the key to all of your ATOM and any other asset contained within. Anyone who knows this can take your crypto – keep it safe and don’t paste it randomly.
After you are done copying and pasting it, copy something else to store in your clipboard. It doesn’t matter what, anything to remove your private key from your active clipboard.
You’ll need to open the Keplr extension and click on the person in the top right. This will bring you to the account listing page. Click add account and you’ll be taken to a LOCAL webpage that is a part of the Keplr extension.
You can tell it’s a local webpage because you can see in the address bar there isn’t a “http://” or “https://” instead it’s “chrome-extension://”
This means it’s loaded on your computer and doesn’t use the internet. In fact, you can disconnect the internet when doing the next step. That’s what I do and it’s good practice when you are dealing with private keys. Just pull the internet plug from the back of your computer and do this next step.
Here you can “import existing account”
Paste your private key, and give the account a name (maybe “exodus” in my case so I can remember where else I can access this wallet.)
Once done you can plug back in your internet if you unplugged it and you can go back into Keplr, click on the person and select the new account. This should connect your wallet to OSMOSIS, but won’t give you any airdrops yet unless you have held ATOM since Feb 18th. You’ll still need to do a little more work to earn it all.
The genius of this is, as you do the menial work to get the airdrops, you learn how to interact with all of the elements needed to be a defi superstar.
Those who have never purchased ATOM can still participate in any of these steps. However, they may or may not receive OSMO rewards as a result. But they will receive decent returns over time as indicated below.
OSMOSIS is a separate wallet from Exodus and Keplr is yet another wallet. You now will have your ATOM balance visible in Keplr and even though you can see your ATOM balance, it’s not initially clear why the assets here https://app.osmosis.zone/assets are blank. It’s because OSMOSIS uses balances from it’s wallet and you must “deposit” ATOM in to get things rolling.
To do this you can click on the “Assets” menu and click “DEPOSIT” next to ATOM.
This should pull up the Keplr wallet and ask you to approve it’s access to your funds.
This looks overly confusing but really isn’t. It states the website (app.osmoss.zone) and it’s intentions similarly to when an app asks for permission to use your location on an iPhone. Just ignore the weird words like “cosmoshub-4” – this is just the shard of the network you are connecting with. Not relevant.
Once you approve you’ll see a FROM and TO:
The ‘from’ is your “Exodus” wallet you imported and the ‘to’ is your Osmosis wallet. You’ll need to enter an amount to deposit, then click deposit.
Word to the wise: never withdraw all of your crypto from a wallet as you may get stuck trying to do a transaction that needs crypto to complete but doesn’t have any… this type of catch-22 is annoying.
Once you have some ATOM, go to the Trade page:
This is DEFI!!!! Welcome!
More specifically, this is a “swap” page where you can exchange one asset for another.
You should see ATOM and OSMO as that appears to be the default pair to swap.
In this case, you’ll select the asset on the top that you wish to sell and pick an asset on the bottom that you wish to buy. By taking the ATOM and OSMO default, you’ll notice that if you enter a 1 next to ATOM it calculates 1 ATOM worth of value in OSMO. If you click the large blue Swap button you will get that amount of OSMO and give up 1 ATOM.
Pick whatever asset you want to buy – and make a swap. You don’t even need to use whole numbers. Check this out: I’m buying 0.05 ATOMs worth of ION which happens to be 0.000671 with today’s market prices.
It pulls up this scary looking screen.
This basically lays out the message that is sent into the network to facilitate your transaction. You’ll see your sender address (I redacted mine for obvious reasons) and it gives you a selection of fee choices. You can pay a little to have the transaction completed quickly or $0 to trade in the average time (which at this point is about 3 seconds.)
Once completed, you’ll see your balance on the Assets page change and now go to the Airdrop page. You should see some of the missions completed by now. Note that I believe this only works on wallets that housed ATOM since Feb 18th, but it’s still worth a shot as you never know!
There are three things left to do: add liquidity, stake osmo, and vote on a governance proposal. This may seem like a foreign language, but OSMOSIS makes it really easy and by doing it, defi gets easier to understand.
Staking is a key process in crypto profit taking. To stake means you lock up a portion of your crypto for a period of time and gain in-kind rewards as a result. You can think of staking as opening a savings account denoted in the asset you are staking. In this case, you must stake OSMO to gain a yield in new OSMO tokens.
Once you click on the Stake button you are pushed into a non-similar looking web page which lists a ton of validators. Without getting into the mechanics of staking, you can click on “Manage” next to any validator that you wish to stake with. They all have websites and you should be able to click through and make sure they are proper companies. I don’t believe there is a difference between any of them, though if they don’t have a website or worse, have a crappy website (with spelling errors!), it’s probably best to avoid those players.
It should load your OSMO balance from the airdrops up until now and you should be able to click on “delegate”, enter a number and then click “Delegate.” I don’t recommend staking it all as you may still need some OSMO to pay for transactions. You’ll get another ugly Keplr screen pop up asking you to approve the staking and, once set, your “delegated” balance should be updated. You should see this on the top now with the amount you staked and your “pending rewards”. At some point you can come back here and, at the top right, the claim rewards button will be lit up. But not yet, it takes time.
This would be how you claim the OSMO that you earn over time and you may want to check in once a month to claim – or just leave it to claim all at once. There’s no difference as you will get the same rewards.
When you go to “undelegate”, the OSMO staked amount will go into a 14 day locking period where you can’t use the OSMO you just unstaked. Once it’s done it will be returned to your Asset page balance.
Now go back to the “Airdrop” page as you should see another green completed and your OSMO balance should have increased. The amount of airdrop left should have decreased also.
Now that you have a few assets, ATOM, OSMO, and perhaps a third or more, you can go to the “Pools” page. It may look confusing the first time, but you get used to this.
Welcome to liquidity mining!
The easiest way to explain liquidity mining is to point back to when you “swapped” one asset for another. Who was on the other side of that transaction?
Well, no one… It was a transaction funded by a liquidity pool with both assets in it.
So, assuming you did as I did and swapped ATOM for ION, the ATOM/ION liquidity pool would usually provide that other side. It would take my ATOM into the pool and give me back the equal amount of ION but in this case I don’t believe there was an ATOM/ION liquidity pool — so how did this swap work?
Decentralized Exchanges are able to create super complex and specifically precise transactions that initiate within seconds. In this case, I believe my ATOM was sold for OSMO and that OSMO then sold for ION. All within the 3 seconds the Cosmos network needed to process the transaction and all without an actual cost to me, the user, unless I needed to speed up the transaction.
Costless is a bit of a misnomer – because as you read below there is an actual cost, it just comes out of the transaction. But it feels free because it’s a low cost that is non-impactful on the results.
There is information just above the SWAP button indicating what the ultimate transfer rates are, the liquidity pool and swap fees, both under 1% total, as well as the estimated slippage. Slippage is bad if it’s over 1% as that indicates that you’ll be getting up to 1% less value when you trade. So, in my case, if slippage was 1% it would mean I’d be giving $1.34 of ATOM and receiving only 98.2% of that value in ION (100% – (.3 + .5 + 1)) which is $1.31588 worth of ION.
Certainly these things don’t seem to matter on a small scale, but multiply all of this by 1000 and you see how slippage gets annoying particularly if it gets in the 5-7% range, yucko.
The beauty of defi is that anyone can fund any liquidity pool with as little or large funds as they want. So, how do you fund a liquidity pool? This is the true driver of DEFI, the collection of those fees and re-distributing to all the folks who lend their assets to the pool, is why you are here. Passive wealth growth has been the staple of every rich person since the beginning of time and here we have the perfect opportunity for everyone to partake.
Back to the Pools page.
Each of the chunks displays a liquidity pool and for example sake let’s pull up ATOM/OSMO.
This seems to be a decent pool with a good APR. Imagine a bank account offering you 123.12% APR LOL. You’ll notice that there is $201 million worth of liquidity in this pool already and the two assets are ATOM and OSMO.
There are basically two steps to start participating.
Step 1 is to join together some ATOM and OSMO into a single LP token (stands for Liquidity Provider.) This token is the only token that can be staked into this pool as it’s the only way to have these two assets joined together.
To do this, click on “Add / Remove Liquidity” on the top of the page:
This should pre-set the assets with ATOM on the top and OSMO on the bottom like this:
You’ll see your balances on the right and as you enter a number into either ATOM or OSMO the other will calculate so you balance your assets: they must be equal to each other to join this pool.
Once you settle on the amount you wish to add to the liquidity, click “Add Liquidity” and sign the transaction in your Keplr wallet pop up and the system mints the LP token for you.
Step 2 is staking the newly minted LP token and you do this by clicking the “Start Earning” botton on the right of the page below the chemist dude.
OSMOSIS does a really cool thing: they allow you to pick the cool down period. Remember as we staked OSMO there was a 14 day period where you can’t use your crypto when you un-stake it. This is called a cool down period and when staking LP tokens in OSMOSIS they allow you to choose how long you are willing to wait and reflect the APRs accordingly.
Pick your flavor and click MAX on the right of the amount to bond, then click “bond”. You don’t want to keep extra LP tokens in your balance if there is an incentivized pool they can participate in. After you sign your Keplr transaction you’ll be entered into the incentivized liquidity mining pool.
Now go check your Airdrop page 😉 Fun huh!
Mission 1 should now be completed along with Mission 0, 2, and 3. Only number 4 is left.
Its mission critical to vote. Just like in non-digital life, voting in crypto is how we regulate, decide, reward, and democratize the marketplace. OSMOSIS makes voting easy.
Click on the Vote tab and it will pop you into the governance area where you may need to wait for a vote to be active in order to vote. In general voting is as easy as staking except you pick yes or no. I believe voting is free, but really only available if you have the proper asset. In this case we’re using OSMO, so keep some in your wallet or staked so you can vote.
On the left of this staking / governance page you can see MANY other networks and each of those networks has its own set of assets with all of the above components. In fact, as Cosmos adds on more and more ecosystems they aim to contain all of the cryptosphere — therefore giving you access to all networks via this one wallet interface.
I’ll post more on other airdrops as they become available within this initial Cosmos blitz, but there are also many airdrops on the Terra network. The Terra network is built using the Cosmos blockchain building tools within the Cosmos ecosystem natively so their propensity towards airdrops is well known.
Many folks I interact with say the airdrops (alone) on Terra make participating in their ecosystem worthwhile, though I think the deeper you get in, the more well established your base is. So the sooner you can make these moves, the more reward you’ll gain over time.
I guess I’ll have to write about Terra as well 😉