Add EVM to Osmosis

Description

This proposal outlines a Protocol Revenue sharing agreement, which entails adding the support of EVM Smart contracts and a native EVM Wallet experience on the Osmosis protocol by integrating evmOS. In return, a proportion of taker fees generated by trading from EVM wallets on Osmosis will be shared with evmOS.

Osmosis has been pioneering the decentralized crypto exchange experience within the interchain for over three years. Currently, it supports only Cosmos native wallets such as Keplr and Leap. Attempts to integrate EVM wallets like Metamask Snaps have not yielded a satisfactory user experience.

To attract more users and enhance the user experience, Osmosis could support EVM wallets natively, deploy EVM-compatible bridges, and establish a partnership to integrate evmOS into the Osmosis chain.

About evmOS

evmOS is a plug-and-play solution developed by the Evmos core protocol team that adds EVM compatibility and customizability to non-EVM chains. Integrating evmOS will empower Osmosis with:

• Full access to evmOS modules and updates
• Full access to product partnerships
• Continuous upgrades, access to product and engineering support

evmOS has already attracted significant interest from teams in and out of Cosmos as a solution for bringing the EVM to their chain, including: Ripple, Aura, Realio, HAQQ, and Zignaly

Proposal

This proposal signals the addition of evmOS as a module on the Osmosis blockchain, with integration led by the evmOS team. This integration will enable the onboarding of new EVM users and will be funded by a protocol revenue share system that is shared with the evmOS team.

Integrating evmOS will enable new EVM wallet users to join the Osmosis protocol, increasing liquidity volume and generating additional taker fees for Osmosis. A portion of this added value will be allocated to further developing the evmOS protocol and incentivizing the prioritization of Osmosis on their roadmap.

The existing Osmosis experience and its users will remain unaffected, with Cosmos wallets like Keplr and Leap continuing to function as usual. However, new users will gain access to Osmosis, unlocking the untapped potential of EVM users. For instance, MetaMask, which serves over 30 million monthly active users and connects to nearly every web3 dApp, currently cannot be easily connected to Osmosis, while Cosmos wallets like Keplr serve a much lower amount of users (1 million monthly transacting users).

Additionally, this will make integrations with third-party protocols much more seamless. For example, numerous bridge protocols with which Osmosis may wish to integrate to support bridging of new assets do not yet support CosmWasm. Having an EVM layer upon which to deploy will allow these interoperability protocols to deploy without significant code changes. For this reason, supporting the EVM on Osmosis will help streamline the development roadmap.

Specifically, adding evmOS will enable the following features on Osmosis:

• EVM Wallet Integration: Users can use EVM wallets like MetaMask or Rabby to interact with Osmosis natively, similar to any other EVM experience. Users will sign Cosmos transactions with the EVM wallet widget. Native MetaMask use with the Osmosis chain requires enabling communication with JSON-RPC and the corresponding EVM backend, provided by evmOS.

• Solidity Smart Contract Deployment: EVM Solidity smart contracts can be deployed and executed on Osmosis. The protocol can choose between permissionless deployment, permissioned to whitelisted addresses, or restricted access. At launch, contract deployment will be permissioned to mirror the existing CosmWasm deployment standard. This can be changed via a governance proposal on Osmosis. Integrating evmOS makes the chain EVM-compatible, allowing any bytecode runnable on Ethereum to be run on Osmosis, supporting EVM smart contracts from other EVMs.

• Token Display and Transfer: Osmosis native tokens, IBC tokens, and ERC-20s can be displayed and transferred within the EVM wallet widget, such as MetaMask. This seamless integration with Cosmos-native assets like OSMO and other IBC coins is enabled by the Single Token Representation v2 2 (STRv2), an adaptation of the evmOS x/erc20 module combined with the newly introduced EVM Extensions 2.

• Alternative Gas Token: A different default gas token can be set for EVM transactions. For example, Osmosis can choose to only accept USDC for EVM transactions instead of OSMO.

Beyond these features, evmOS offers a security advisory program, continuous dependency upgrades (e.g. Cosmos SDK, IBC, geth), technical support, and exclusive product partnerships.

Revenue Sharing

The Osmosis protocol charges a small taker fee on all trades, with a default rate of 0.1%. This proposes that a percentage of the taker fee from EVM wallet transactions on Osmosis will be allocated to the evmOS development team. This allocation will not affect taker fees from existing Cosmos wallet interactions, but will only apply to new EVM users, who are not currently present on Osmosis.

The proposed revenue share amount is similar to other revenue share agreements on Osmosis, such as the Skip Protocol protorev module revshare agreement. We propose that Osmosis allocates 20% of the taker fees from EVM wallet transactions to the evmOS team in year one, 10% in year two, and 5% thereafter. This structure ensures that the evmOS team is incentivized to drive net-new EVM transaction volume through Osmosis, resulting in larger taker fee revenue overall.

The agreement, revenue sharing, and concurrent upgrades will last for a minimum of three years, after which time it will need to be renewed by Osmosis governance and the evmOS team. After the 3 year period, the latest codebase can continue to be used. However, a renewed agreement will be required for further upgrades. For instance, if evmOS reaches version v25 after three years and the agreement is not renewed, the Osmosis protocol can continue using version v25 but will not have access to newer versions, such as v26. If the agreement is not renewed, revenue-sharing will also terminate.

Implementation

The evmOS team will integrate core protocol changes into the Osmosis codebase, with Osmosis as the code owner responsible for reviewing and merging the code. Upon integration, the Osmosis protocol will have immediate access to evmOS. Typical timelines are as follows, though they may vary based on requirements and resources:

• Integration into the new chain: 4 weeks
• Launch and go-to-market: 4 weeks
• Agreement duration: 3 years, with updates to the stack during that time

Full Proposal: https://forum.osmosis.zone/t/add-evm-to-osmosis/3040