OmiseGO is among the more enchanting digital currency projects. Notably, it is an Ethereum-based PoS (Proof-of-Stake) platform that endeavors to decentralize payment networks as well as contrive an open, public financial system. The project’s objective entails providing a solution to the elemental coordination issue among payment processors, gateways, and financial institutions.
OMG is an ERC-20 token used by the OmiseGO project to fuel the Proof-of-Stake consensus. The platform is as yet under immense development given that it is pursuing a number of dynamic projects. In particular, the organization is coming up with a one of its own kind decentralized exchange referred to as ODEX in its protocol’s core along with leading development on the very 1st Plasma implementation for Ethereum.
OmiseGO is an autonomous extension of the Omise company, a renowned payment processor based in Southeast Asia. Omise, founded in 2013, instigated the OmiseGO ICO (Initial Coin Offering) in July of 2017. Most noteworthy, the ICO raised a worthwhile $25 Million USD. OmiseGO has taken to the phrase, “Unbank the Banked” as a reference to contriving an open, decentralized, and interoperable financial network, doing away with such dominant intermediaries as banks.
As from the time of the ICO, the project’s development team is fixated on coming up with its network’s core components, being inclusive of their Decentralized Exchange, ODEX, Plasma, and the White Label Wallet SDK. Both Plasma & ODEX are technically futuristic and are at the helm of innovation in the industry.
Omise’s affiliations in the financial payments industry have offered OmiseGO some appreciable exposure to the mainstream that a good number of other digital currencies are yet to have. In addition, Omise thus far fuels payments for a variety of prime global organizations including McDonald’s. OmiseGO has as well already partnered with such notable organizations as Golden Gate Ventures and SBI Investment.
As far as OmiseGO’s vision is concerned, here is what the team had to say:
“Through the OMG network, anyone will be able to conduct real-time, peer-to-peer financial transactions, including but not limited to payments, remittances, payroll deposit, B2B commerce, supply-chain nance, loyalty program activity, asset management, and other on-demand services in a completely decentralized and inexpensive way, and including highly performant and fully decentralized trading.”
OmiseGO’s Underlying Technology
Conventionally, engineering around the constraints of the International Financial System has turned out to be ineffective with lots of complications. OmiseGo acknowledges the manner in which such centralized networks as ACH, SWIFT, CHIPS, and FedWire serve a variety of functions and operate via a number of mechanisms, contriving a system that necessitates noteworthy transaction costs, due diligence, as well as contractual enforcement by all partakers.
Consequently, OmiseGO by design redefines the present financial system by offering a vastly scalable Decentralized Exchange, ODEX, which is intended to serve as the infrastructure for various markets to plug into and interact with one another whilst preserving high levels of censorship-resistance, liquidity, security, and transparency. Given that the platform runs on the Ethereum blockchain protocol, security on the verification of transactions is maintained. In addition, Plasma’s incorporation is intended to fuel the blockchain to a theoretically infinite capacity.
OmiseGO is a plausibly complex platform with various components in so far as technical aspects go. With that in mind, listed below are the 4 fundamental components that make up the project’s underlying technology:
- The ODEX Decentralized Exchange Protocol
- Proof-of-Stake Consensus Algorithm
- White Label Wallet Software SDK
- The Plasma Network
ODEX is incorporated into the core protocol which is meant to serve as the infrastructure for various markets. It is intended to be rolled out in two fundamental phases namely:
- Centralized Order Matching & On-chain Settlement.
- Order Matching on the Plasma Chain.
Its first rollout will render it the base layer for a collection of venues (i.e. markets) that execute orders outside of the OmiseGO network’s Proof-of-Stake consensus. As such, order matching is carried out off-chain, but whichever order that is settled will be executed as a transaction on-chain.
Early venues on the ODEX network protocol will be operated by centralized entities, and Omise will as well function as an operator instead of a distributed validator state. In the end, the network will be transitioned into a system of validators who will be at the helm of the consensus. In addition, the latter will bring about reduced collusion amongst operators.
The project’s team is working on the implementation of batch ordering for the settlement of orders. This will, as a result, increase its effectiveness by totaling off-chain transactions into a verifiable on-chain transaction. What’s more, the team is working on bonded exchanges, in which case markets plugged into ODEX are penalized for inappropriate behavior through slashing of a bond deposit and rewarded for good behavior.
ODEX’s on-chain order book component is undergoing active research but will require complex state transitions in Plasma, which is currently very difficult. The on-chain market would probably comprise a call market as well as an auction-based mechanism in its first rollout.
- Proof-of-Stake Consensus
The PoS consensus in OmiseGO is as well under development. It implements a validator network of users who stake the indigenous OMG token and are as such recompensed in transaction fees for good behavior and, as is the case with other PoS-based systems, penalized for bad behavior. Nevertheless, OmiseGO’s penalty entails soft slashing where instead of slashing the entire stake as is the case with hard slashing, only the returns are slashed.
Because of the premise of OmiseGo and its ODEX, validator staking returns may in fact be received in whichever currency. These returns are equally distributed to a stake, getting rid of the economies of scale which is present in PoW (Proof-of-Work) systems. Particularly, validators will be required to run an entire Ethereum node for root chain security purposes, given that tokens that have been staked are cached on the root chain.
OmiseGO’s consensus approach is closely related to its Plasma implementation, which is intended to fuel the blockchain’s PoS and enable it to scale efficiently.
Plasma is an Ethereum-based layer 2 scalability solution. It is at the moment in the Plasma Cash development phase. The project’s team has concluded work on Plasma MVP and is making way for the development of Plasma. The Proof-of-Stake consensus is folded into Plasma which serves as a child/root chain framework between Ethereum, which is the root chain, and OmiseGO which is the child chain, where the child chain can scale to hypothetically infinite capacity while depending on the root chain for both security & settlement.
OmiseGO’s implementation of Plasma is referred to as Tesuji and has its fundamental objectives laid out as follows:
- Proof of Authority run on the OmiseGO Servers.
- Transition to Ethereum for final safety.
- CLI to keep track of the child chain.
- Multi-currency support.
- Atomic Swap Support.
Quite a number of the above-mentioned features are live on their testnet and the project’s development has resulted into two phases namely; the Minimum Viable Plasma (MVP) and the More Viable Plasma (MoreVP). Tesuji’s initial alpha phase is at the moment open on their GitHub repository.
The OmiseGO team released an update on Reddit on September 2018 regarding their progress on the development of Plasma, Proof-of-Stake consensus, and DEX. Nevertheless, quite a number of users were seemingly upset at the update’s lack of transparency as well as immateriality. This ensues the lengthy process of building out the platform, given that this process involves the implementation of both the Plasma and PoS technologies which come with immense sophistication and are yet to be proven practically on sizeable public blockchain networks.
Included in their most recent update is more insight on their work on Plasma, being inclusive of smart contracts, watchers, as well as the underway research.
- eWallet Suite/Wallet Software SDK
The eWallet Suite enables not only businesses, but individuals as well to run their own digital wallet services via a local ledger. The eWallet’s instances will bring about a federated layer atop the OmiseGO network. This will consequently enable users to carry out transactions in whichever currency, be it fiat or crypto.
The SDK will be affixed to the ODEX on the blockchain and standardize features for wallet providers. As such, this layer is bound to become a base for apps to be built atop the OmiseGO network protocol. Utilizing the SDK software, EPPs (eWallet Payment Providers) are in a position to plug into ODEX and trade various kinds of digital assets in a decentralized fashion on the OmiseGO blockchain network.
eWallet Payment providers could be classified as either custodial or non-custodial. The simplicity involved in the connection and usage of wallets will provide ODEX with better liquidity. The project’s team is confident that their model vanquishes the coordination issue between multiple eWallet Payment Providers as is the case with traditional financial systems.
Product and Traction
As per OmiseGO’s most recent update regarding the advancement of their product, Plasma is seemingly making headway owing to the fact that various aspects of the first Tesuji implementation are live on their testnet. Be that as it may, there are as yet various noteworthy developments, for instance, the ODEX on-chain order books as well as the ironing out of the Proof-of-Stake mechanisms, that have active research underway.
Ultimately, the moment OmiseGO’s entirely scalable Proof-of-Stake blockchain and DEX go live, it will contrive an innumerable number of benefits over legacy networks of payment and exchanges. OmiseGO is as well optimized for interoperability, a futuristic evolution in the blockchain space that will undoubtedly transform the landscape dynamically.
A number of straightforward use cases of OmiseGO include fast domestic and global payments, a ledger that tracks assets throughout the expanse of a big organization, as well as payments and remittances in any currency. Certain more sophisticated use cases may in the end be inclusive of, among others, digital issuance of central bank currencies, next-generation banking solutions, a highly liquid interoperable assets’ market, and loyalty point systems for consortiums of brands.
The OmiseGO network will transition to a fully public blockchain network upon its deployment.
The OMG Token
As of April 1, 2019, there is a total and circulating supply of 140,245,398 OMG. Most significantly, this is all there ever will be, and owing to the fact that the coin is not mineable, the supply is capped and there are no intentions to generate more in future. The coin is priced at $4.89 USD per unit and the market capitalization is slightly over $686 Million USD, ranking it #21 in market capitalization amongst all digital currencies.
The OmiseGO blockchain is PoS while the OMG token is an ERC-20 token.
Amid the coin’s ICO, which raised $25 million USD, 65 percent of the OMG token supply were distributed. While 20 percent of this supply was retained by the organization to cater for operational expenses, 10 percent was distributed amongst the project’s development team. The remaining 5 percent was put aside for an airdrop to holders of the ETH tokens.
The above-mentioned airdrop took place in September 2017 for users holding at least 0.1 ETH at block height 3988888. Most significantly, this is the only airdrop that has ever occurred for the cryptocurrency and any other mentioned airdrops were merely scams.
A major reproval of OMG regards the fact that it remains rather centralized. The top 100 accounts own just about 65 percent of the OMG tokens in their entirety. On the assumption that the percentage owned by OmiseGO is removed from the equation, there still remains 25 percent of the coin’s total supply held by a small minority of the platform’s users.
Significantly, OMG has partnered with such notable organizations as SBI Investment, Global Brain, Ascend Capital, SMDV, East Venture, and Krungsri Finnovate.
OMG Economic Implications
Transaction fees are indigenous to the OmiseGO chain. The chain validators are rewarded for validating the blockchain’s activity. Payments and interchange fees are used to pay for activity on this network and to incentivize honest activity. Bonding comes with a cost, those who bond on behalf of others on this network will likely charge fees, for instance, clearinghouses.
OMG Market & Competition
One of the goals common to a majority of cryptocurrency projects entails disrupting global banking and the conventional financial systems. Be that as it may, OmiseGO is, as a matter of fact, aligning itself somewhat closely with the present banking trends. This is typical of what the traditional providers of online payments are doing with fiat currencies. Significantly, OmiseGO aspires to offer this kind of service with digital currencies.
OmiseGO pledges to render commerce affordable for everyone.
Give thought to the manner in which processing a credit card transaction is currently complicated. Whilst as a consumer one may not fully comprehend this, the infrastructure that fuels credit card transactions is enormous, comprising of not only the vendor and the issuer of the credit card but the card network and the card’s acquirer as well. Obviously, all these levels render it a lot more expensive to process credit card transactions as compared to the way they ought to be.
Regardless of the rather explosive growth witnessed in e-commerce, it still accrues less than 15 percent of the entire retail sales. Mobile payment options are as well growing, with just about 40 percent of retailers accepting some sort of mobile payments. Be that as it may, only 3 percent of retailers accept digital currencies, and Bitcoin is by a mile the most commonly accepted.
As per the statistics by the World Bank, some two billion people from around the globe are at the moment unbanked. According to FDIC’s data, in the United States alone, while a significant 9 M people are unbanked, 24.5 million are underbanked.
The United States’ economy is, without doubt, a lot bigger than Thailand’s. Nonetheless, Omise and OmiseGO are working to reach all of Southeast Asia, China, and Japan. This is a massive potential market, especially in China where mobile payment options are growing at an alarming rate as compared to other third-world countries. Even though OmiseGO is rather unpopular in the West, the organization is aspiring to become a household brand in Asia.
Quite a number of people typify OMG’s competition to ETH’s. These are inclusive of Cardano & NEO, both of which are at the moment bigger than OMG. However, the real rivalry emanates from such online payment platforms as, among others, PayPal, Samsung Pay, Stripe, and Apple Pay, as well as various issuers of credit cards such as American Express, MasterCard, and Visa. Banks are no exception to this, on the grounds that they back credit cards. The competition is as well comprised of hundreds of the extant payment processors.
Any of these payment platforms could join hands with OmiseGO and utilize their innovation to move into the future. On the other hand, they could as well come up with their own solutions. Worth noting is the fact that PayPal, as did MasterCard, has thus far filed a blockchain patent.
In addition, Apple, Visa, American Express, Samsung, and Apple all have in-house blockchain development under way. As much as it could be such an odyssey and a hard-fought battle for OmiseGO to win as the leading cryptocurrency payment processor, the organization is without doubt appropriately positioned in anticipation of the battle.
The Team Behind OmiseGO
The one thing that is undeniably pretty spectacular about OmiseGO is the breadth of experience and flair throughout the expanse of its team members. Not only does the organization boast the original highly skilled Omise team that contrived the payment’s startup, but they as well have a number of really notable cryptocurrency figures as advisors.
The Lead Team:
- Jun Hasegawa:
Jun Hasegawa is OmiseGO’s founder and Chief Executive Officer. Jun boasts more than 16 years’ experience in web and product design. He has also founded various other Thailand-based entrepreneurial ventures. Most noteworthy, he as well co-founded Omise, the Thailand-based payment gateway.
- Donnie Harinsut:
Donnie Harinsut is the co-founder as well as COO (Chief Operations Officer) of Omise. Occupying the position of an International Trading Officer, Donnie was an employee at Alpha-do Inc., a Japanese advertising company for twelve years.
The Advisory Board
As far as OmiseGO’s advisory board is concerned, OmiseGO taps the brains of various developers as well as founders from the Ethereum project. Other than Vitalik Buterin, Ethereum’s founder and Chief Executive Office, and Gavin Wood, the co-founder and former Chief Technical Officer of Ethereum, the advisory pool also has the co-author of the Plasma Network and the research lead of Ethereum’s Casper Proof-of-Stake protocol at its disposal.
OmiseGO was the very first Ethereum project to go beyond a billion in value. The project’s team is working on a number of enterprising developments and features. Nevertheless, the project has left quite a number of its early adopters disappointed as a result of its rather sluggish pace of progress.
Omise’s experience as regards payment processing networks affords OmiseGO a number of distinctive benefits that other digital currencies most likely don’t have. Whether or not the project plays out as the decentralized financial payment system and the Decentralized Exchange (DEX) of the future economy is immensely contingent upon its launch and the manner in which it incorporates into the steadily evolving ecosystem.
On the whole, OmiseGO has many of the pieces in place whose installation or rather setup would have otherwise been needed for it to become the household brand for the broader Asia, and from there possibly across the globe. It is certainly a project worth watching in the long-term.