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Signal Proposal to Adopt the Liquidity Module onto the Cosmos Hub (Another summary of Cosmos Hub Governance Proposal #38, including a roadmap for the months ahead)

Introduction

Two weeks ago Tendermint and B-Harvest submitted a forum discussion to get the $ATOM community sentiment for the upcoming proposal to add the Liquidity Module to the Cosmos Hub.

The aim for the Cosmos Hub Gravity DEX is to act as a marketplace for trading tokens from any connected network including tokens from Cosmos-SDK powered networks, Ethereum tokens including DeFi tokens and tokens from connected networks via IBC or Peg or others.

As we outlined in the proposal the module is a combined model of an order book and Automated Market Maker (AMM) with the following features:

An AMM that uses an Equivalent Swap Price Model (ESPM). This guarantees a more protective swap price mechanism for liquidity providers to provide a better risk-return profile and prevent excessive value extraction from arbitrageurs A Batch Process where every order in the same batch is treated equally to minimize unnecessary latency/gas fee competition among traders and arbitrageurs, resulting in minimizing MEV (Miner Extractable Value)

We want to thank everyone who has contributed with their suggestions and comments to the final shape of this proposal and we are happy to announce that today, after careful consideration, we submitted the Signaling Proposal on chain https://www.mintscan.io/cosmos/proposals/38.

We look forward to Cosmos Hub’s community vote for this initiative but also for the next phases of this project. You can try out the Gravity DEX here.

So what have we been working on in the meantime?

Work in progress

Since we released the forum proposal for the signal proposal we have been working hard to get the module in a production-ready state. This includes:

Adding additional features to the module, including Rosetta support Economic simulations — these are being written up now and will be published in the next two weeks Simulation testing Documentation A peer review that will begin this week.

We have also bee...

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