What is OmiseGo?
OmiseGo is an interoperable decentralized exchange and payment platform that allows value transfers across blockchain networks and provides fiat-to-crypto and crypto-to-crypto investment gateways. OmiseGo was created to solve the value transfer issues between payment processors, financial institutions, and individuals, and is ideal for people who lack access to financial services, market liquidity, network security, or experience problems with scalability because it aims to solve those issues. OmiseGo accomplishes these goals via the three cornerstones of their blockchain;
- The decentralized exchange,
- The Software Developer Kit
- A proof-of-stake consensus
OmiseGo core components
The Decentralized Exchange
OmiseGo’s decentralized exchange allows cross-chain transactions to take place; this means that users are no longer limited to trading fiat/crypto pairs and BTC or ETH/ altcoin pairs, but instead, will have the ability to trade altcoins for other altcoins directly across blockchain networks. The transactions that pass through the decentralized exchange will be validated via a proof-of-stake consensus, where OmiseGo users stake their OMG tokens to vote on the validity of blocks.
The Software Developer Kit
On a payment platform like OmiseGo, it is essential that there are wallet providers that allow the tokens in the trading pairs to be safely stored and securely transacted with. That is why OmiseGo provides users with the Software Developer Kit, a set of tools that they hope will encourage developers to create user-friendly wallets on the OMG blockchain without the need to have a deep understanding of the blockchain beforehand. The Software Developer Kit also allows developers to integrate debit and credit account transfers which will provide a gateway to deposit, withdraw, and convert fiat currency to digital assets.
The primary purpose of the OMG token is to be used as a staking token for OmiseGo’s proof-of-stake consensus. Users will have the opportunity to stake their funds on the validity of blocks on the OMG network. And, if users stake their tokens actively and honestly, then they will be rewarded with the transaction fees from the block they validate in an amount that is proportional to the number of tokens they staked. However, if users stake their tokens on invalid blocks, they will face the possible penalties of losing all of their staked tokens (hard slashing) or losing their returns (soft slashing).
Why decentralize services?
When services are centralized, a single entity controls and validates the transactions taking place, the result is often costly transaction fees from working through an intermediary.
That is why OmiseGo decided to decentralize services across payment networks, so users could transact in high volumes for lower transaction fees than traditional financial services allow. OmiseGo’s decentralized service suite includes decentralized market liquidity, a decentralized clearinghouse, and a decentralized exchange, all in hopes of changing the landscape of cryptocurrency exchanges and payment platforms for the better by removing the power from sovereign entities, and returning that power to the platform users.
OmiseGo was created by Omise, a payment processor that services Thailand, Japan, and Singapore. The Omise team had a blockchain division researching the emerging blockchain industry and had been a part of the Ethereum community since its inception in 2015. As the blockchain division of Omise began researching proof-of-stake consensus, they eventually discovered that they could create a platform that could act as a scaling solution to Ethereum through Plasma. On top of that, Omise realized they could leverage this same piece of technology to enable value transfers across different blockchain networks, with a liquidity mechanism that allowed the user to transfer in and out of various fiat and cryptocurrencies without a centralized broker. Using this knowledge, the Omise team, led by CEO Jun Hasegawa launched OmiseGo in 2017.
Find out more about OmiseGo by checking out the project’s whitepaper and official guide.