OmiseGO is an independent branch of Omise, an online payment gateway services provider that operates in Southeast Asia. OmiseGO utilizes the power of the Ethereum blockchain to provide financial transactions in both crypto and fiat.
The OmiseGO (OMG) token is used to power activities on the platform.
How OmiseGO Overcomes The Shortcomings Of The Ethereum Platform
With lower transaction speeds, OmiseGO could not have used the Ethereum blockchain as-it-is. To overcome this barrier, OmiseGO built its platform as a scaling solution for Ethereum.
According to OmiseGO, “OMG is the answer to a fundamental coordination problem amongst payment processors, gateways and financial institutions.” The platform enables Peer-to-peer financial transactions that are not limited to remittances, supply chain finance or Business-to-Business finance.
Part of solving Ethereum’s shortcomings was through employing a different consensus algorithm, Proof of Stake, which could achieve higher transaction speeds per second.
The Genesis of OmiseGO
Its parent company, Omise, started its operations in 2013 and OmiseGO was born in 2017 after an Initial Coin Offering (ICO) which raised $25 million. Jun Hasegawa and Donnie Harinsut founded OmiseGO. The platform’s advisors include Vitalik Buterin, the founder of Ethereum.
The platform employs a Proof of Stake (PoS) consensus algorithm instead of Ethereum’ Proof of Work (PoW) consensus algorithm. The PoS algorithm uses validators across the network who stake the OMG token. Validators are rewarded OMG tokens.
Malicious validators are punished softly by slashing their returns. A severe punishment involves cutting the entire stake.
The OMG Token
Apart from using the OMG token to pay transaction fees on the OmiseGO blockchain, the OMG token is used for staking by giving its holders the right to run a validator node. Validator nodes use their OMG holding as a security deposit. The amounts transacted on the platform hoists the token’s value.
The Core Basics Of The OmiseGO Platform
OmiseGO has four distinct aspects that enable it to be a comprehensive global financial gateway. These are:
- White-label Wallet Software Development Kit (SDK)
This aspect of the OmiseGO platform contains standardized elements to be used by digital wallet service providers. The OmiseGO team is still developing this layer so that a wide range of application developers can use the platform.
- Scalability Network Mechanism
This mechanism adds another scalability layer with a focus on Ethereum. The scalability network mechanism employs the Plasma architecture. The architecture incorporates the Proof of Stake algorithm to enhance the root/child chain framework with Ethereum as the root chain and OmiseGO as the child chain.
- OmiseGO Digital Wallet Software Development Kit
This aspect of the platform allows interfacing the platform with debit and or credit cards to facilitate ‘top-up and cash-out options via ATMs or over the counter.’ This process tokenizes cash on to a wallet application and which can subsequently be used to purchase other tokenized assets on the OmiseGO platform.
- OmiseGO Decentralized Exchange (ODEX)
ODEX provides a platform where digital assets can change hands. OMG stakers validate transactions on the decentralized exchange. Additionally, the decentralized exchange will accommodate tokens on the Ethereum and Bitcoin blockchains among other Bitcoin-like platforms.
OmiseGO’s has exciting projects in the pipeline including Plasma Cash which is a Plasma construction aiming at changing fungible assets into unique coins on the Ethereum platform.
The Initial Plasma Implementation is in progress. This will introduce Proof of Authority (PoA) with OmiseGO as the operator.
Upcoming developments include the Hybrid Proof of Stake where validators and OmiseGO (operator) will validate blocks on the Plasma chain. Another future development is the introduction of Full Proof of Stake which will give all the validation powers to the OMG stakers.
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