Bounty Proposal: Expansion of DOT throughout Cross-Chain DeFi (Cosmos)

Proponent: 5Gc35bE2YF713hEfQP3kHXTq82HMVbasHpjT2P4bwxfiJxY2 [3/5 Multisig to be added for live referenda]

Date: 10/31/2023 (Updated 11/6/2023)

Requested allocation: 50,709.94 (approx. $250k)

Proposed Curator reward: N/A

Short description: The purpose of this proposal is to broaden the reach of DOT in cross-chain DeFi by allocating DOT to be used within the Cosmos ecosystem by first supplying DOT liquidity to Osmosis DEX.

Context of the Bounty:

This proposal is a continuation of Composable's previous treasury proposal, which aimed to introduce DOT to the cross-chain DeFi ecosystem. The goal is to expand on the previous proposal by outlining a more comprehensive solution for bringing DOT to cross-chain DeFi, primarily through the use of Composable's IBC-based bridging solution. Much of the key information and reasoning will be transferred from the original proposal, with changes focused on a more concerted effort.

For further context on Composable:
Composable has been developing a full tech stack for cross-chain infrastructure based on its substrate-native parachain, Picasso.
Composable's tech stack consists of the following components:

Picasso - Composable's Kusama Parachain.

Pablo DEX - where users can swap assets native to the DotSama ecosystem.

Composable Chain - a Cosmos-based blockchain designed to support IBC-based asset transfers between ecosystems.

Composable Virtual Machine (CVM) - for communicating smart contract instruction sets between chains.

These components aim to extend the reach of assets native to the DotSama ecosystem by enabling seamless movement and orchestration of assets between external chains.

Problem Statement:

Despite having a substantial market capitalization, DOT remains largely isolated, with limited liquidity outside of its ecosystem. The problem is attributed to a lack of decentralized bridging solutions, a shortage of accessible DEX listings, and limited cross-chain interactions. To address these issues, Composable has developed an IBC-based bridge to enable DOT to move outside of its native network.

Objectives of This Proposal:

The objectives of this proposal are to introduce DOT to the cross-chain ethos (beginning with Cosmos), further differentiating milestones and key goals in a manner that promotes decentralization and provides the community with reassurance regarding how funds will be handled and maintained. The initial objective is to enable new users to acquire DOT liquidity via Cosmos's largest DEX, Osmosis, by providing DOT liquidity to a DOT/USDT pool within the protocol.

Benefits and Goals:

The proposal's benefits and goals are as follows:

i) Create widespread visibility and use of DOT through cross-chain applications, starting with popular applications in the Cosmos ecosystem.
Build a stronger relationship between Polkadot and Cosmos users in cross-chain DeFi, encouraging assets to be brought back into the Polkadot ecosystem.

ii) Move significant DOT liquidity outside of its native chain to offer new opportunities for usage and participation in cross-chain platforms and dApps.

Completed & Ongoing Initiatives for DOT within Cosmos:

Completed - Implement Composable’s IBC-based bridge as the canonical transfer protocol for DOT with Osmosis

Completed - Enable supercharged pools on Osmosis for:

Completed - Enable trading pools on Astroport (Neutron deployment) for DOT, KSM, and vDOT

Completed - Create trading pairs within the Polkadot/Kusama ecosystem for popular Cosmos based assets : ATOM, stATOM, OSMO, STRD, STARS, SCRT, UMEE, BLD, CRE, NTRN (via Pablo DEX)

In Progress: Agoric - DOT Vault Collateral for IST

In Progress: UMEE - ibc-DOT Lending

Marketing:

Composable plans to promote this proposal through various marketing channels, including Twitter threads, Spaces, and blog posts in order to raise awareness and attract users.

New Holder Growth:

The proposal aims to onboard new DOT holders within the Cosmos ecosystem, similar to the growth seen in ATOM holders after its launch on Osmosis DEX.

Proposal Milestones:

The main goal of this bounty proposal is to expand DOT's presence and usability in the cross-chain DeFi space, starting with the Cosmos ecosystem. The proposal details specific tasks, timelines, costs, and targets for providing liquidity and enabling lending/borrowing against DOT.
Proposed bounty objectives are outlined below, but we are open to additions in order to work with additional parachain teams to enable DOT based solutions outside of the Polkadot ecosystem.

Call to Community:

The intent behind transitioning from Treasury Spender to Bounty proposal is to make the ethos of this proposal more focused on community initiative. With that being said, we are actively exploring potential curators for this bounty, with preference being to active community members and existing parachain teams. If you are interested in assisting in curation of this bounty, please express your interest by either reply to this thread, email to [email protected], or via telegram @jde17

Update - 11/6

We've reduced the initial bounty to $250k worth of DOT and removed bounties following this milestone. Ideally, we would like to be using this discussion as a way to work with other parachain teams within the ecosystem to assist in bringing their Polkadot solutions cross-chain as well, which would be included as additional child bounties in an eventual proposal. As noted above, we'll continue using this discussion as a starting point around those conversations