Osmosis is a Layer 1 proof of stake (PoS) blockchain built using the Cosmos SDK. Osmosis's vision is to provide a sandbox for AMM development rather than a one-size-fits-all strategy for AMM and its liquidity pool. The protocol enables developers to iterate on new, customized AMM designs by using existing liquidity pools and modules already running on the network. It also has an on-chain governance system that allows each AMM pool's stakeholders (i.e., liquidity providers) to control and manage their pools. The chain enables developers to design and deploy custom AMM by using its various modules and utilizing Osmosis's on-chain governance system.

Under Osmosis's native token OS MO grants the holder the right to vote on proposed network changes and is rewarded for helping to protect the network. Its first application, also known as Osmosis, is an AMM with ATOM and OSMO as its initial base transaction pair.

Cosmos IBC

Cosmos IBC the goal is to build blockchain Bridges, enabling previously isolated chains to connect and communicate. The IBC (Inter-blockchain Communication) protocol is used to create these Bridges. IBC is a Cosmos SDK module where chains can be integrated and used to bridge other IBC-enabled chains.

Osmosis adopts and implements the IBC module at startup, in the process establishing connections with various Cosmos chains, These include the Cosmos Hub, Akash and Iris networks. Users of these chains can send their tokens to Osmosis through the IBC channel and provide liquidity to their respective token pools. The Osmosis team also simplifies the IBC transport process by abstracting the channel creation setup process.

Osmosis module allows developers to customize their exchange and price curves based on a variety of parameters, including exchange costs, token weights, calculated time-weighted average prices (TWAP). The network acts as an AMM sandbox in which developers can experiment with new time-dependent, volatility indices, and off-chain prognostics as inputs to their products. Project teams can also use these modules to create additional DeFi asset types or protocols, such as options and dynamic expense markets.

this network allows new developers to take advantage of existing IBC connections, order flows, and liquidity. As a result, the team does not have to create and channel liquidity for the new AMM from scratch, thereby eliminating the need to start a new AMM for every contract or module upgrade.