If you're coming from traditional finance, you likely put a great deal of emphasis on a bank's promises and paperwork. If an account says that it offers 6% APR, you take it for granted that a 6% APR will be delivered.
This is not the case in crypto, especially with new projects. The entire space is in beta, so you can't depend on what a protocol says it delivers. Even if the dev team is trying to deliver, you must verify everything.
The core tenant of crypto is trustlessness for a reason. Any time you trust a middleman with a yield farm, you are taking on technical risk. But there's another risk they don't tell you about — idiot risk. You risk that, regardless of their desire to create a successful protocol, the devs may be completely retarded.
This is the case with Osmosis, Cosmos' highly touted AMM. To my knowledge, it is the only moderately successful AMM based on Cosmos. They held a liquidity mining event to draw in capital, and they suckered me in with 4 digit APRs.
The APRs paid out the appropriate amount, so at least they weren't lying about the rewards. And for the risk you are taking in any of these new protocols, you deserve a 4 digit APR. Not the 4-6% bullshit rate you get from BlockFi or Gemini or Celsius. That is honestly highway robbery. (And how do you think they're getting the returns to fuckin pay you? They're all in defi and degen shit grabbing up all the 250% rewards and paying you out a fraction of that — just like a traditional bank.)
So the idiot Osmosis devs weren't lying. But the APRs were still wrong. How? The numbers were all correct.
Osmosis makes you go through this stupid, needless extra step to prime your tokens for yield farming. You have to go through some silly "IBC transfer" to stage your tokens. The tokens leave your wallet and go into some intermediate contract on Osmosis. After that you can farm.
The rewards show up every 24 hours just like the devs say they will. But when you try to transfer them back out of the IBCwhatever back into your wallet, they disappear. The transaction shows as "successful," but you just don't get the rewards. The block explorer says you got em, but you didn't.
I didn't even know that you could create an app that could say something different from the block explorer. Honestly, it takes more talent to fuck that up than to just have a matching ledger. The bottom line — you don't even have proof of the fuck up because Mintscan says the transaction actually went through.
So then you go to Telegram and ask about it. The admin says that transactions that fail will revert, but there is no specific time in which this will happen. So the transaction could just not revert for years. Who knows.
Now is Osmosis a scam? Not so far, because I've had some of these stuck transactions actually revert and the ATOM came back to my wallet. I was able to re-send the ATOM* with exponentially higher gas and it got through. But it took forever and who knows if prices would have dropped in that period of time.
You might ask why I don't just get out of the protocol altogether. In order to get the highest APRs, you have to lock up your funds for a time period. Now that part of the contract doesn't have any fuckin errors, lol.
The bull market covers a lot of mistakes. If this kind of failure were to happen in a normal market, you can bet you'd lose all of your tokens' fiat value over the lockup period. The admins and idiot devs would be powerless to help you gather your rewards, and you'd just lose all of your shit. Fortunately, in the bull market, bad lockups don't hurt as much because everything in crypto is going up. You can wait out the lockup and get your shit back out.
I'm not stupid enough to think that bull markets will cover me forever. I'm making a note of the devs/names associated with Osmosis so I can avoid them like the plague/warn others of their incompetence now and in the future.
Although admins are responsive for now, that doesn't mean the project isn't a future scam. If the devs get tired of fixing their mistakes, they could just rugpull liquidity and stop working on the project. That does not require any malicious backdoors in the contract, just a simple economic attack and radio silence on social media. And let's be real — we're dealing in a space of fat, lazy, entitled young people who are newly rich. They don't have to do this. They could just quit and leave you hanging at any point. This has happened to me a number of times.
Point is, you deserve high APRs if you're fooling around in this space. You are facing more risks than analysts have even had time to quantify. Make sure you're getting returns commensurate with this risk. [Hint: Not on BlockFi, Celsius, Coinbase, or Gemini.] Until further notice, Osmosis sucks ass and is not a viable investment opportunity.
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