Precise investigation on Osmosis governance

    Overview of analysis:

    Governance can be considered one of the most important principles of the blockchain world, and it is changing in line with the evolution of this world. But governance for digital currencies is more than a simple concept. It is very difficult to balance the interests of all stakeholders in blockchain networks. As you have seen, there are different ways to design the blockchain governance model, and their sustainability largely depends on various factors.

    The incentives of most active projects in Cosmos are focused on Validators and Delegators; But Osmosis is trying to provide the interests of all participants in the network and those who make deposits. The nodes that have staked the most amount of Osmosis network token are selected as validators. Staked OSMO holders are eligible to vote on governance proposals.

    This dashboard divided into the following parts:

    • Comparison of Osmosis, Cosmos and Terra from voting performance
    • behavior of voters on Osmosis, Cosmos and Terra
    • Detailed analysis on Osmosis chain
      • Top proposal and leader board of voters
      • Precise behavior of voters on Osmosis

    Osmosis chain:

    Osmosis is an advanced Automated Marketer Protocol (AMM) that allows developers to build custom AMMs with robust liquidity pools. Osmosis is built using the Cosmos SDK and uses the Inter-Blockchain Communication (IBC) feature to enable cross-chain transactions. The Cosmos ecosystem follows the "Blockchain as Decentralized Program" architecture; This means that Osmosis is a blockchain connected to cosmos Hub, which is also a decentralized exchange.

    Osmosis, with the help of IBC, connects to the entire ecosystem of Cosmos chains and their more than 10 billion dollars of native assets. After supporting active blockchains on the Cosmos hub, the project aims to connect to other chains such as Ethereum and Bitcoin.

    Being able to change the parameters of a liquidity pool is important and useful, but this feature would be pointless without a way to coordinate a decision between depositors. The independent governance feature of Osmosis pools leads to the creation and evolution of a diverse range of liquidity pools with different risks and strategies.

    Your liquidity relative to others determines your ownership and voting power in important pool decisions. To encourage long-term liquidity, your shares are locked up for a period of time, with higher rewards and voting rights at higher times.

    The long-term commitment and its incentives, in addition to preventing some attacks, establish fairness among liquidity providers. Anyone who takes more risk and puts more assets into the pool for a longer period of time is rewarded and has a greater say in strategic decisions.

    Methodology:

    The data provided by Flipside has been used to handle this analysis. To handle this investigation the following steps have been passed as below:

    • The voting performance on networks
      • Table→ Blockchian.core.fact_governance_votes
      • Chains→ Osmosis, Cosmos and Terra
      • Metrics→ vote count, distinct voters, validators or ordinary voters, Vote option distribution, vote per proposal and voter per proposal
    • Voters comparison
      • Metrics→ Switch vote pattern by voters, Participation of voters by count of voted proposals and number of votes
      • Leaderboard of voters and most popular proposals
      • OSMO distribution for various voter types, switching vote over time
      • Vote change ratio for various proposals on Osmosis
    • Conclusion: By aggregating the outcomes of the steps and deep dive into the proposal, draw a conclusion about the voting performance and voters of Osmosis network.

    Conclusion:

    Osmosis is recognized as one of the first AMM applications of Cosmas by offering a new Automatic Market Maker (AMM) model. The Osmosis protocol is one of the leading platforms in the field of providing collaborative governance, enabling both people active in liquidity pools and developers.

    • The voters who change their voting options hold more OSMO tokens than voters remain at their first option.

    • The rate of participation in the Osmosis is higher than that of other networks, and its main reason is its large number of proposals compared to them. It also depends on the importance of the proposal in the future of the network in order to investigate the participation of voters in proposals of Osmosis.

    • The future will undoubtedly test the flexibility of today's centralized institutions, and its orientation will be towards greater personal empowerment and greater participation of all relevant stakeholders rather than the few who are responsible for decision-making.

      Even in institutions that are more suited to operate under centralized governance models, factors such as checks and balances play a key role in promoting transparency and accountability among decision makers.

    Part 1: Comparison of Osmosis, Cosmos and Terra from voting performance

    Findings:

    After the previous part and comparison of Osmosis with Terra and Cosmos, this part has been focused on detailed analysis of Osmosis governance voting behavior:

    • On Osmosis, Validators have changed their voting options more than regular voters.
    • About 50% of voters have changed their voting options on Osmosis.
    • The most popular vote change patterns on Osmosis is “YES→NO” and “NO→YES” and it shown that the voters have completely changed their minds.
    • The proposal no.82 has the highest share of vote changing over the whole proposals of Osmosis network and its about the “Signaling proposal for BOOT incentivized pools”.
    • Also, proposal no.206 is the most popular proposal on Osmosis by highest count of participation and its about “Adopt Axelar as the Canonical Ethereum Bridge Service Provider”.

    Part 3: Detailed analysis on Osmosis chain

    Findings:

    Its important to find out the behavior of voters on Osmosis compared to Terra and Cosmos:

    • Over 87% of votes on Osmosis belong to “YES” option and its the highest accept rate among these networks.
    • Voters of the Osmosis network are more active than voters of Terra of Cosmos. The participation of voters on various proposals validate it!
    • Some remarkable outcomes have been captured in this part and as can be seen over 28% of voters have participated on over 30 proposals of Osmosis and Over 77% of voters on Terra network have been participated on less than 3 proposals.

    Part 2: behavior of voters on Osmosis, Cosmos and Terra

    Findings:

    The first part presents the general and overtime comparison of voting performance on Osmosis network compared to Terra and Cosmos:

    • The count of proposals and captured votes on Osmosis are far higher than other networks.
    • Cosmos has higher count of unique voters and Osmosis stands in the second rank with little lower unique voters.
    • The Osmosis has higher number of unique proposers than other networks.
    • The average unique voter per proposal on Cosmos is much higher than Osmosis and Terra.
    • The over time analysis reveals that the count of captured votes and unique voters on Osmosis are really close to Cosmos network.
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    Part 3.1: Top proposal and leaderboard of voters

    Part 3.2: Precise behavior of voters on Osmosis

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    Author:

    Credited by MZG

    Discord handle: m.zamani#0361

    Twitter handle: @GargariZamani

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