Darren Kleine

Recently returning from the Delphi Cosmos Hackathon, Sunny Aggarwal is impressed with the range of innovative developments in the Osmosis ecosystem he witnessed at the event.



The <a href="https://blockworks.co/news/osmosis-co-founder-doesnt-see-cosmos-and-polkadot-as-competitors">co-founder of Osmosis</a>, a cross-chain automated market maker on <a href="https://blockworks.co/tag/cosmos">Cosmos</a>, says he is “really happy with the results” and that there’s “a lot of cool stuff being built right now.”



Speaking to Blockworks on the 0xResearch podcast (<a href="https://open.spotify.com/episode/5mFAueKiVdaxVp7a7RIInh?si=9057368633984726">Spotify</a>/<a href="https://podcasts.apple.com/us/podcast/how-osmosis-could-become-cosmos-defi-hub-sunny-aggarwal/id1651683074?i=1000619392647">Apple</a>), Aggarwal says one particular application caught his eye.



Although it was difficult to choose only one project demonstrated at the event, Aggarwal says his favorite, dubbed Night Market, showed the most interesting potential.



Among the <a href="https://twitter.com/osmosiszone/status/1669404441248956416?s=20">winners</a> of the hackathon, Night Market is a “private trading pool,” Aggarwal explains, using “<a href="https://blockworks.co/news/crypto-blockchain-privacy-unimportant">ZCash-style</a>” shielding for depositing assets. The app enables users “to engage with protocols through swaps, staking, and [liquidity providers] while safeguarding their identity,” according to an Osmosis tweet.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">5/ 🥈 <a href="https://twitter.com/Aegis_finance?ref_src=twsrc%5Etfw">@Aegis_finance</a> (Night Market) &#8211; Night Market is bringing privacy to Osmosis through the use of a secure platform for holding multiple assets privately. Enabling users to engage with protocols through swaps, staking, and LPs while safeguarding their identity. <a href="https://t.co/c7pCLIrVOL">pic.twitter.com/c7pCLIrVOL</a>&mdash; Osmosis 🧪 (@osmosiszone) <a href="https://twitter.com/osmosiszone/status/1669404515689435137?ref_src=twsrc%5Etfw">June 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Users can trade from a shielded pool, so “no one will be able to see who&#8217;s trading what,” he explains.&nbsp;



“On centralized exchanges today, you can&#8217;t see who&#8217;s making which trade” but in <a href="https://blockworks.co/tag/defi">DeFi</a>, “everyone&#8217;s just leaking all of that information and leaking their trading strategies.”



Private trading, Aggarwal says, will be a “game-changer for DeFi.” Without privacy protections, more advanced traders can take advantage of leaked information to extract value at the expense of others.



<a href="https://app.blockworksresearch.com/">Blockworks Research</a> analyst <a href="https://twitter.com/smyyguy">Dan Smith</a> says he’s hesitant to buy into fully private decentralized exchange (DEX) tech “because I love seeing which addresses are active, what they&#8217;re doing and how funds are flowing through DEXs.”



Aggarwal explains that while individual user trading behavior will be obscured, it is still possible to observe the sum of pool trades and to follow order books. 



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“People want a visible order book. That&#8217;s the point of having an order book,” he says. “You want all of that to be publicly visible.”



“What we&#8217;re really trying to hide is who is making what trade,” he says. “We&#8217;re trying to get the privacy level to basically match what&#8217;s on a centralized exchange.”



The next big challenge, Aggarwal says, is enabling more advanced mechanisms like margin and perpetual trading in a private and decentralized setting. “<a href="https://blockworks.co/news/advantages-single-contract-dex-architecture">It gets more complicated</a> when you have to start thinking about liquidations.”



Keeping things simple for now, private spot trading is “definitely something we&#8217;ll see live by end of year,” he says.



Adventurous dabblers can try Night Market on the testnet right now, Aggarwal adds. “But hopefully, we&#8217;ll have it more productionized and integrated into the Osmosis experience.”



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Osmosis co-founder’s new favorite DeFi app: Private DEX pool Night Market

Bessie Liu

<div id="highlights-block_62d8243a9823b" class="highlights">
 <ul>
 <li>Polkadot’s native token will be the first to move between the ecosystems</li>
 <li>“Our goal is to provide the best DEX possible for the entire crypto ecosystem and the interchain world that is coming into reality,” Sunny Aggarwal said</li>
 </ul>
 
</div>



Osmosis, a cross-chain automated market maker on Cosmos, has expanded its services to Polkadot and Ethereum-based tokens through integration with Axelar and Moonbeam.&nbsp;



Cross-chain swaps allow decentralized finance (DeFi) dApp developers to expand their reach between different blockchain ecosystems. 



Osmosis’ latest integration, which enables transactions via Inter-Blockchain Communication, will support one-click swaps between the different blockchains, starting with Polkadot’s native token DOT.



“Our goal for Osmosis is not just to be a Cosmos DEX, our goal is to provide the best DEX possible for the entire crypto ecosystem and the interchain world that is coming into reality,” Sunny Aggarwal, co-founder of Osmosis Labs, told Blockworks.



Aggarwal wanted to make sure that Osmosis had a single canonical bridge to connect different networks. This would give the team capability to execute more functionality in a timely manner.&nbsp;



A governance voting process that involved four other bridge providers was motioned. Blockchain interoperability startup Axelar was chosen as the primary cross-chain infrastructure.



“Axelar’s UX was very similar to what we were looking for and much more seamless than a lot of the others,” Aggarwal said, adding that Axelar had faster connectivity and a better security model.&nbsp;



Polkadot and Cosmos are often considered competitors, but Aggarwal hasn’t thought of the two projects in that way. Rather, they’re simply different frameworks for building dApp chains, he said.&nbsp;



Indeed, this latest collaboration between the two blockchains demonstrates a commitment to deeper integration.&nbsp;



“The point of building these interoperability protocols is not just to interoperate within tiny ecosystems,” Aggarwal said. “Polkadot is a big ecosystem that has a lot of interesting assets. Our plan is to be able to continue to connect every ecosystem possible.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.