[Crypto projects](https://revain.org/projects/) › Osmosis

# Osmosis (OSMO): how it works, supply and reviews

## In short

- **Type**: Application-specific Layer 1 blockchain (Cosmos SDK) running a DEX, connected to other chains via IBC
- **Maximum supply**: Maximum supply of 1 billion OSMO, reduced by burns
- **Risks and caveats**: Bridged assets depend on third-party bridges; an unbacked nBTC mint left Alloyed BTC partly unbacked in 2026
- **Checked**: 31 October 2026

## Key facts

- **Ticker**: OSMO
- **Official site**: [osmosis.zone](https://osmosis.zone/)

Key facts checked on 31 October 2026 against official sources.

## What is Osmosis

Osmosis is a cross-chain decentralised exchange that runs as its own proof-of-stake blockchain in the Cosmos ecosystem, connected to other chains through the IBC protocol. Anyone can create pools, tokens or orderbook markets, and trades are routed across stableswap, concentrated liquidity and smart-contract pools. OSMO is the native token used for staking, governance and fees.

## Network and consensus

| Parameter | Details |
|---|---|
| Type | Application-specific Layer 1 blockchain (Cosmos SDK) running a DEX, connected to other chains via IBC |
| Consensus | Proof of stake: OSMO is delegated to validators, with an unbonding period on unstaking |
| Pools | Stableswap, concentrated liquidity and CosmWasm pools (including an on-chain orderbook), all routed through one pool manager |
| Smart contracts | CosmWasm smart contracts are supported |
| Fees | Taker fee of 0.1% by default, with per-pair overrides (e.g. 0.02% for BTC/USDC, up to 0.8% from OSMO into some assets); pool creation costs 20 USDC |

## Supply and issuance

| Parameter | Details |
|---|---|
| Maximum supply | Maximum supply of 1 billion OSMO, reduced by burns |
| Inflation | Inflationary emissions have ended; staking rewards now come from protocol revenue |
| Fee burn | Taker fees in other assets buy back OSMO (47.5% to stakers, 52.5% burned); OSMO collected goes 30% to stakers and 70% burned |

## What OSMO is used for

- Staking to secure the chain, earning a share of protocol revenue
- Governance voting, proportional to staked OSMO
- Transaction fees (other whitelisted tokens are converted to OSMO) and on-chain spam-prevention fees

## Who develops and governs Osmosis

- **Governance**: On-chain governance by OSMO stakers; proposals go through forum discussion (3 days minimum), a deposit of 30,000 OSMO and a vote
- **Developer**: Docs are published by Osmosis Labs; code is in the osmosis-labs GitHub organisation
- **Open source**: The project describes itself as open source

## History

| Date | Event |
|---|---|
| 18 June 2021 | The osmosis-1 chain launched at genesis, 17:00 UTC |
| 30 June 2025 | A tokenomics roadmap proposed cutting effective inflation to zero so circulating supply stays constant or falls |
| 25 June 2026 | The third-party Nomic bridge minted 40.65 nBTC with no Bitcoin behind it, which entered the Alloyed BTC pool; disclosed in September 2026 |
| 7 September 2026 | Validators ran an emergency upgrade (v31.1.0) freezing 22.65 allBTC held by the attacker |

## Security and audits

- The homepage states Osmosis is open source and audited; no dated audit reports were found on the official pages reviewed
- nBTC incident (2026): about 39.84 BTC of unbacked nBTC from the Nomic bridge sat in the Alloyed BTC transmuter; part was frozen by an emergency upgrade and about 18 BTC was laundered through Tornado Cash, per a September 2026 forum proposal

## Security incidents

| Date | What happened | Source |
|---|---|---|
| 8 June 2022 | Exploit: A bug in the Osmosis AMM let users withdraw more from liquidity pools than they had deposited; validators halted the chain at block 4713064. The governance record puts the damage at about 5 million dollars and the shutdown at three days. Osmosis v10.0.0 fixed the JoinPool bug from v9 and the network restarted at 4:00 PM UTC on 12 June 2022. Funds returned: not stated | [lcd.osmosis.zone](https://lcd.osmosis.zone/cosmos/gov/v1/proposals/265) |
| 25 June 2026 | Exploit: The third-party Nomic bridge minted 40.650602 BTC of nBTC on Osmosis with no Bitcoin behind it, which entered Alloyed BTC; disclosed after 74 days. Validators froze 22.650608 allBTC held by the attacker in emergency upgrade v31.1.0 on 7 September 2026; about 18 BTC left Osmosis via Tornado Cash. A forum proposal plans to restore backing. Funds returned: Not yet: 22.650608 allBTC frozen; the forum proposal would move it to the Liquidity subDAO and use community pool BTC to cover the rest. | [forum.osmosis.zone](https://forum.osmosis.zone/t/alloyed-btc-restore-backing-after-the-nbtc-incident/4122) |

## Risks and caveats

- Bridged assets depend on third-party bridges; an unbacked nBTC mint left Alloyed BTC partly unbacked in 2026
- Unstaked OSMO goes through an unbonding period during which it earns nothing and cannot be transferred
- Validators can run emergency upgrades that freeze assets, as in September 2026

## Official links

- Website: [osmosis.zone](https://osmosis.zone/)
- Docs: [docs.osmosis.zone](https://docs.osmosis.zone/)
- Source code: [github.com/osmosis-labs](https://github.com/osmosis-labs)
- Governance forum: [forum.osmosis.zone](https://forum.osmosis.zone/)
- Governance votes: [daodao.zone/gov/osmosis/proposals](https://daodao.zone/gov/osmosis/proposals)

## Questions and answers

**What is Osmosis?**

A cross-chain decentralised exchange that runs as its own proof-of-stake blockchain in the Cosmos ecosystem, connected to other chains through IBC.

**When did Osmosis launch?**

The osmosis-1 chain started at 17:00 UTC on 18 June 2021.

**What is the maximum supply of OSMO?**

1 billion OSMO. Inflationary emissions have ended and part of protocol fees is used to burn OSMO.

**How does Osmosis governance work?**

OSMO stakers vote on on-chain proposals after forum discussion; a standard proposal needs a 30,000 OSMO deposit.

## Sources

- [Osmosis - Homepage](https://osmosis.zone/)
- [Osmosis docs - What is Osmosis](https://docs.osmosis.zone/learn/osmosis)
- [Osmosis docs - The OSMO token](https://docs.osmosis.zone/learn/osmo)
- [Osmosis docs - Governance](https://docs.osmosis.zone/community/governance)
- [Osmosis networks repo - Genesis validators](https://github.com/osmosis-labs/networks/blob/main/genesis-validators.md)
- [Osmosis forum - Tokenomics roadmap](https://forum.osmosis.zone/t/3775)
- [Osmosis forum - Alloyed BTC: restore backing after the nBTC incident](https://forum.osmosis.zone/t/alloyed-btc-restore-backing-after-the-nbtc-incident/4122)

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Page updated: 2026-10-31

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Source: https://revain.org/projects/osmosis/