(Dinarian Note: I do hope this helps some of you realize the potential that lays within Osmosis Zone.. any questions let me know, I do this regularly to not only make a few 100% APY, but to help support XPRT liquidity..)
Getting Started
Before opening the Osmosis AMM App, make sure to install the Keplr Wallet.
Open the App
Go to https://app.osmosis.zone/
Connect Wallet
Click Approve. This confirms that you are connecting to the app.osmosis.zone and the chain osmosis-1.
⚠️ Always make sure you are connected "app.osmosis.zone" and network "osmosis-1"
Deposit Funds
Click "Assets", Then click on the deposit link next to the asset name. For this example we are clicking the ATOM deposit link.
Approve connection to cosmoshub-4
Once connected, select how much you would like to deposit, then click the deposit button
Approve the transaction
Once the transaction is completed a series if confirmations notifications will be displayed including the IBC confirmation.
Swapping Tokens
Swapping tokens is as easy as selecting the tokens you wish to swap and selecting the swap button at the bottom of the order window. Be sure to read the glossary at the bottom of this tutorial to learn about terms such as slippage and impermanent losses.
Adding Liquidity to a Pool
Select a pool from the Pools page. 
Then click Add/Remove Liquidity 
Input a quantity of one of the assets. The quantity of the other asset(s) will auto-complete. (Pools require assets to be deposited in pre-determined weights.)
⚠️ In order to get your rewards you must bond the liquidity pool tokens.
To remove liquidity, input the percentage amount to withdraw.
Incentivized pools receive OSMO liquidity mining rewards. Rewards are distributed to bonded LP tokens in the pools that meet the bonding time requirements. The longer you provide liquidity to the pool, the more rewards you get.
Bonded Liquidity Pool (LP)Tokens
You can choose to bond your LP tokens after depositing liquidity. LP tokens remain bonded for any amount of time you choose. Remember, bonded LP tokens are eligible for liquidity mining rewards ONLY if they meet the minimum bonding length requirement for that incentive.
Click "Bond Shares" and approve the transaction in your Keplr wallet.
When you want to un-bond an LP token, you need to submit a transaction that begins the unbonding period. After the end of the pre-determined period (usually 14-21 days), you then will submit another transaction to withdraw the tokens.
Liquidity Bootstrapping Pools
Osmosis offers a convenient design for Liquidity Bootstrapping Pools (LBPs), a special type of automated market maker designed for token sales. New protocols can use Osmosis’ LBP feature to distribute tokens and achieve initial price discovery.
LBPs differ from other liquidity pools in terms of the ratio of assets within each pool. In LBPs,the ratio changes over time. LBPs involve an initial ratio, a target ratio, and an interval of time over which the ratio adjusts. These weights are customizable before launch. One can create an LBP with an initial ratio of 90-10, with the goal of reaching 50-50 over a month. The ratio continues to gradually adjust until the weights are equal within the pool. Like traditional LPs, the prices of assets within the pool is based on the ratio at the time of trade.
After the LBP period ends or the final ratio is reached, the pool converts into a traditional LP pool.
LBPs facilitate price discovery by demonstrating the acceptable market price of an asset. Ideally, LBPs will have very few buyers at the time of launch. The price slowly declines until traders are willing to step in and buy the asset. Arbitrage maintains this price for the remainder of the LBP. The process is shown by the blue line below.
Choosing the correct parameters is very important to price discovery for an LBP. If the initial price is too low, the asset will get bought up as soon as the pool is launched. It is also possible that the targeted final price is too high, creating little demand for the asset. The green line above shows this scenario.
Osmosis' goal is to provide an easy-to-use LBP design to give protocols the best chances at a successful pool. The LBP feature facilitates initial price discovery for tokens and allows protocols to fairly distribute token rewards to the pool liquidity providers.
Bonded Liquidity Gauges
Bonded Liquidity Gauges are mechanisms for distributing liquidity incentives to LP token holders that have been bonded for a pre-determined and disclosed amount of time. Close to half of the daily issuance of OSMO gets distributed as liquidity incentives.
For instance, in a Pool 1 LP share, 1-week gauge would distribute rewards to users who have bonded Pool1 LP tokens for one week or longer. The quantity of OSMO that each liquidity provider receives is directly in proportion to the number of their personally bonded tokens.
A single bonded LP position may be eligible for multiple gauges. The only thing that effects the guages is the minimum amount of bonding time required for each gauge.
Another incentive is the fact that, the rewards earned from liquidity mining are not subject to unbonding. Rewards can be transferred immediately to use how you see fit. Only the principal bonded shares are subject to the unbonding period.
Allocation Points
Not all of the liquidity pools have incentivization gauges. Staked OSMO hodlers choose which pools to incentivize via on-chain proposals. To incentivize a pool, governance can assign “allocation points” to specific gauges. At the end of every daily epoch, around half of the newly released OSMO (the tokens meant for liquidity incentives) are distributed proportionally to the points that each gauge has. The percent of the OSMO liquidity rewards that each gauge receives is calculated as its number of points divided by the total number of allocation points.
Take, for example, a scenario in which three gauges are incentivized:
- Gauge #3 – 10 allocation points
- Gauge #4 – 5 allocation points
- Gauge #7 – 5 allocation points
20 total allocation points are assigned in this scenario. At the end of the daily epochs, Gauge #3 will receive 50% (10 out of 20) of the liquidity incentives minted. Gauges #4 and #7 will receive 25% each.
Governance can pass an Update Pool Incentives proposal to edit the existing allocation points of any gauge. By setting a gauge’s allocation to zero, it can remove it from the list of incentivized gauges entirely. Proposals can also set the allocation points of new gauges. When a new gauge is added, the total number of allocation points increases, thus diluting all the existing incentivized gauges. Gauge #0 is a special gauge that sends its incentives directly to the chain community pool. Assigning allocation points to gauge #0 allows governance to save some of the current liquidity mining incentives to be spent at a later time.
At genesis, the only gauge that will be incentivized is Gauge #0, (the community pool gauge). However, a governance proposal can come immediately after launch to choose which gauges/pools to incentivize. Governance voting period at launch is only 3 days at launch, so liquidity incentives may be activated as soon as 3 days after genesis.
External Incentives
Osmosis not only allows the community to add incentives to gauges. Anyone is eligable to deposit tokens into a gauge to be distributed. This feature allows outside parties to augment Osmosis’ own liquidity incentive program.
For example, there may be an ATOM/XPRT pool that has a one-day gauge incentivized by governance OSMO rewards. However, PersistenceOne(XPRT), may also choose to add additional incentives to the one-day gauge or even add incentives to a new gauge (such as one-week gauge).
External incentive providers can also set up long-lasting programs that distribute rewards over an extended time period. For example, PersistenceOne can deposit 30,000 XPRT to be distributed over a one-month liquidity program. The program will automatically distribute 1000 XPRT per day to the gauge.
Fees
Osmosis also provides three sources of revenue: transaction fees, swap fees, and exit fees.
TX Fees
Transaction fees are paid by any user to post a transaction on the chain. The fee amount is determined by the computation and storage costs of the transaction. Minimum gas costs are determined by the proposer of a block in which the transaction is included. This transaction fee is distributed to OSMO stakers on the network. Validators can choose which assets to accept for fees in the blocks that they propose. This optionality is a unique feature of Osmosis.
Swap Fees
Swap fees are fees charged for making a swap in an LP pool. The fee is paid by the trader in the form of the input asset. Pool creators specify the swap fee when establishing the pool. The total fee for a particular trade is calculated as percentage of swap size. Fees are added to the pool, effectively resulting in pro-rata distribution to LPs proportional to their share of the total pool.
Exit Fees
Osmosis liquidity providers pay a small fee when withdrawing from any pool. Similar to swap fees, exit fees per pool are set by the pool creator. Exit fees are paid in LP tokens. Users withdraw their tokens, minus a percent for the exit fee. These LP shares are burned, resulting in pro-rata distribution to remaining LPs.
