Osmosis — the leading Cosmos DEX and DeFi Hub is now integrated with Router Chain. This integration enables seamless asset-bridging from 25+ EVM/Non-EVM chains to/from Osmosis via Router Chain.
The Osmosis community governance proposal, ‘Grant Router Protocol the Ability to Deploy Contracts on Osmosis’ passed on August 8, 2024, allowing Router to upload CosmWasm contracts to Osmosis without requiring governance approval for each subsequent contract.
As a result, Router Protocol can now enhance Osmosis with advanced interoperability solutions, asset bridging, and cross-chain communication frameworks. This integration also marks the first IBC-type connection for Router Chain. We also plan to extend our offering to other IBC-compatible chains in the near future.
What makes this integration truly historic is the seamless connection between the Cosmos ecosystem and Tron–all via Router Chain! For the first time, these two major ecosystems are comprehensively connected, enabling new pathways for liquidity and asset transfers. As part of this integration, users can now enjoy the flow of USDC, USDT, and TRX between Osmosis, Tron, and various other supported chains. We will come to this later, but first, let’s see how the asset movement works across EVM/Non-EVM and Osmosis via Router Chain.
“This integration between Router and Osmosis is exciting because it establishes a direct link between the Tron and IBC ecosystems. Users on both sides will benefit from increased interoperability, functionality, and liquidity — and an improved cross-chain trading experience.” — Sunny Aggarwal, Co-Founder of Osmosis
Router’s Minted USDT and TRX as Alloyed Assets
Alloyed Assets are a novel solution implemented by Osmosis to unify various versions of the same asset across different bridges and chains into a single, fungible token. This system consolidates multiple bridged versions of an asset into a unified token, allowing for seamless 1:1 swaps with no slippage via the CosmWasm Transmuter smart contract. By doing so, it mitigates the challenges posed by liquidity fragmentation and simplifies asset management for users.
With Router’s minted USDT and TRX now recognized as Alloyed Assets on Osmosis, they are combined with other bridged versions of these assets. Plus, allTRX or alloyed TRX is currently the only Tron representative within this system.
The Mechanics of Asset Movement
As part of alloyed assets integration–Router Chain essentially utilizes mint-and-burn mechanics for TRX and USDT, and the forwarder flow for USDC. Both methods ensure quick, cost-effective, and low-latency transactions.
Plus, the seamless UI/UX of Nitro is incredibly user-friendly and allow users to enjoy a smooth and streamlined cross-chain experience, with minimal transaction costs and fast processing times.
Let’s delve into the details of these flows now!
The mint-and-burn mechanism for TRX and USDT
To ensure the smooth transfer of TRX and USDT between these ecosystems, Router Chain uses a mint-and-burn mechanism. This approach ensures that when tokens move from one network to another, they are locked on the origin network and minted on the destination network, maintaining a balanced supply across both ecosystems.
The journey begins with a user depositing funds into the EVM/ Non EVM chain’s Nitro contract. This action generates a “FundsDeposited” event. Upon detecting and attesting this event, orchestrators relay the information to the Middleware contract on the Router chain, signaling the transfer of tokens on the source chain.
The IBC Relayer then picks up the event from Middleware and sends it to the Gateway Contract. Upon receiving the request from the IBC relayer, the Gateway contract on the destination chain invokes the Nitro contract. The Nitro contract will parse the message payload and mint the tokens to the user’s address on the destination chain.
The Forwarder flow for USDC
The journey begins with a user depositing funds into the EVM/Non-EVM chain’s Nitro contract. This action generates a “FundsDeposited” event. Upon detecting this event, forwarders invoke the Nitro contract on the Cosmos chain. The Nitro contract on the cosmos chain transfers the amount from the forwarder’s address to the users’ address on the cosmos side.
Simultaneously, the same ‘FundsDeposited event’ is also heard and attested by Orchestrators and sent to the Middleware Contract on Router chain.
Post the funds are transferred to the user on the cosmos side, Nitro contract emits an event that is relayed by the IBC relayer to the Router chain. The middleware contract receives the data from both the source and destination (cosmos) chains and validates that the forwarder has processed the transfer correctly. Post this the forwarder can claim its funds (along with its incentive).
Two Worlds Bridged by Router Chain
Traditionally, both Cosmos and Tron ecosystems have thrived independently, each with its own set of strengths and challenges.
The Cosmos ecosystem is ambitiously constructing a network as interconnected as the universe it draws inspiration from. Its advanced IBC and modular Cosmos SDKs are all commendable pieces of work. The ecosystem currently comprises an expansive network of more than 70 interconnected blockchains.
On Osmosis itself, there are multiple dApps and platforms that are emerging including the Osmosis DEX with a total trading volume of over $35 Billion, MilkyWay Zone, Quasar Vaults, and more.
However, the Cosmos ecosystem remains finite due to the constraints of its own architecture. The dream of an Internet of Blockchains–where blockchain technology is defined by a multitude of interconnected yet independent blockchains, each specializing in different applications and use cases, is yet to be a reality.
On the other hand, Tron is celebrated for its high throughput and low transaction fees. The number of unique addresses on the Tron network has surpassed 249 million, making it one of the most widely used blockchain networks, trailing only behind Ethereum. Tron is also a leader in stablecoin transactions, with its USDT market cap reaching $59 billion, surpassing Ethereum and BNB Chain.
Despite these advantages, Tron has struggled with ecosystem isolation due to a lack of cross-chain bridges, limiting its ability to leverage external liquidity and innovation.
However, the isolation ends here!!
As mentioned above, the major highlight of this integration is the newfound ability for Tron and Osmosis to interact directly, creating unprecedented possibilities for both ecosystems.
Tron has made a name for itself with its impressive USDT market cap. By integrating with Osmosis, Tron’s USDT can now be seamlessly transferred and utilized across the Cosmos ecosystem, addressing a longstanding challenge of the stablecoin movement within Cosmos.
Beyond USDT, Tron’s native token, TRX can now flow into the Cosmos ecosystem, thereby increasing its utility and reach. No more forced CEX interaction just to scoop some TRX.
What This Means for DeFi and Innovation
User Advantages
Enhanced Access to DeFi Services:
- Platforms like Osmosis and Sifchain in the Cosmos ecosystem can now offer their decentralized exchange and cross-chain liquidity pool services to Tron users.
- Tron’s lending platforms like JustLend can integrate Cosmos assets, providing users with more diversified collateral options.
- Tron’s strengths in stablecoin transactions can now be leveraged within the Cosmos ecosystem. Users can participate in more lucrative liquidity pools and yield farming opportunities previously inaccessible due to cross-chain barriers.
Developer Opportunities
- This integration opens up possibilities for developers to create cross-chain applications that capitalize on Tron’s high throughput and Cosmos’s modular, interoperable architecture.
- Developers can utilize Router’s Cross-Chain Intent Framework (CCIF) to build or transform existing platforms into cross-chain solutions that enable for one-click cross-chain staking, swapping, and liquidity provision between Tron and Cosmos.
For example, MilkyWay Zone could leverage Router’s adapter to enable staking USDT on Osmosis from multiple chains with just a few clicks on a single interface.
Conclusion
Our integration with Osmosis is just the beginning. Router Protocol is committed to exploring further opportunities within the Cosmos ecosystem, aiming to integrate with more platforms and services. We envision a future where Router’s connectivity extends beyond Osmosis, facilitating even broader and more dynamic cross-chain interactions. This ongoing expansion will continue to drive innovation and collaboration across the landscape, reinforcing our mission to make Web3 truly interconnected, chain-abstracted, and accessible for all.
