This is a signaling proposal to renew the Osmosis Grants Program (OGP) Market Maker Initiative for one year. This proposal suggests using the existing 7,000,000 OSMO previously allocated to the OGP’s multisig (osmo15dwvndrzndzy7nls57rvq379xeta3dlt467dxerxc4pvkul0thvq6umm9z) to execute new agreements.

This proposal also seeks to allocate the MILK tokens given to the Osmosis community pool as part of the OGP’s grant with Milkyway to bolster depth for MILK on Osmosis and increase the depth of paired assets using this allocation.

The OSMO Market Maker Initiative

In January 2024, Osmosis governance passed the OGP market making initiative, allocating 7,000,000 OSMO to the OGP Multisig. Over the course of the year, the OGP deployed liquidity across multiple market makers to help bolster liquidity for OSMO on centralized exchanges andt strategic markets support strategic markets on the Osmosis DEX (more on this below).

Now that the agreements have ended, OGP plans to narrow the program’s scope slightly to focus on deepening Osmosis DEX liquidity.

All 7M OSMO is currently either held in the OGP multisig or on deployment with market makers. This proposal seeks governance approval to extend the Market Maker Initiative under the new scope rather than requesting additional funding.

The Milkyway Grant

In December 2023, the OGP executed a grant agreement with Milkyway for $120,000. As part of the grant agreement, Milkyway was required to grant the Osmosis community pool $120,000 worth of MILK tokens (at seed price). Now that Milkyway’s TGE has occurred, MilkyWay is prepared to deliver the MILK tokens to Osmosis. If this proposal passes, Milkyway will send the MILK tokens to the OGP instead of the Osmosis community pool, for use within the wider liquidity deployment Initiative.

Current State of Funding Deployments

In the last year, the 7M OSMO allocated to the OGP for the initiative was deployed across three market makers. The amount and status of each deployment are outlined below:

Amber

• Loan Amount: 3,000,000 OSMO
• Term: 12 months
• Current Status: Funds still deployed

Wintermute

• Loan Amount: 2,000,000 OSMO
• Term: 12 months
• Current Status: Closed. Funds returned to OGP multisig. Return Transaction: https://www.mintscan.io/osmosis/tx/10BBE1BF3B590C793568AE6B8D985429D359801935C964D642DA10B609C320BC

Pulsar

• Loan Amount: 500,000 OSMO
• Term: 12 months
• Current Status: Closed. Funds returned to OGP multisig. Return Transaction: https://www.mintscan.io/osmosis/tx/FB4293E990C480164EA4A34B6333684013166BA67B17F3A1EB2C464D21D3C232

1.5m OSMO were undeployed for the duration of the initiative and remained in the OGP multisig untouched.

Proposed Disposition of OSMO

In lieu of allocating smaller OSMO amounts to multiple market makers as was done in the last iteration of the market maker initiative, OGP will initially allocate to just one market maker, Amber Group. The loan amount will be 5,000,000 OSMO

As Amber already possesses 3,000,000 OSMO, OGP will execute the proposal by sending them an additional 2,000,000 OSMO. Additionally, OGP will retain the remaining 2,000,000 OSMO for other potential engagements if necessary, or remain untouched with the OGP. None of the OSMO allocated to these initiatives will be used for grants or OGP compensation.

Proposed Disposition of MILK

The OGP will negotiate with market makers to provide depth for MILK on the Osmosis DEX, paired with strategic assets like USDC and BTC, further increasing those pairing token depths on Osmosis. OSMO inventory will not be used as a pairing asset. The market maker has not been selected yet. Once selected, the OGP will release a blog update to the community, outlining the loan amount and term.

Multisig Composition

The OGP multisig will retain custody of the OSMO and MILK, and facilitate transfers of these assets to and from any market makers. As a reminder, OGP v3’s Reviewer Committee includes:

• Lemma Solutions
• Cosmostation
• Figment Capital
• Brandon Curtis
• Polkachu
• Schultzie
• Juri Maibaum

Forum Post: https://forum.osmosis.zone/t/renew-the-ogp-market-making-initiative-for-one-year/3700