OmiseGo is one of the most interesting projects that’s being built on top of Ethereum blockchain. In short, OmiseGo is basically a proof of stake (PoS) platform that wants to decentralize the payment network while creating a free and open financial system at the same time. OmiseGo’s plasma implementation of Ethereum has been heavily anticipated by the public. In this article, we will discuss more about the history of OmiseGo, what purpose does it serve, and what the future has for this project. Let’s go.
History of OmiseGo
Image source: https://kingpassive.com/invest-in-omisego-2018/
Ethereum was a revolutionary idea that enabled token creations under one ‘umbrella’ which is the Ethereum blockchain itself. The ICO revolution in 2017 was made possible, thanks to Ethereum. However, the rise of Ethereum also slowed down the entire network. Most people who have been trading cryptocurrencies since a while ago would have known the biggest problem with Ethereum. It’s called ‘scalability.’
At the current time, Ethereum is only able to process 15-20 transactions per second (TPS). At the peak of 2017, Ethereum gas transaction costs went through the roof due to the popularity of ICOs and the popular Ethereum-based blockchain game CryptoKitties. Many people started to feel that Ethereum wasn’t ready for mass-adoption and rightfully so.
This is why an effective scaling solution is needed. Then, the OmiseGo team came up with their Plasma solution. Before we get into OmiseGo, let’s talk about the basic concept of Plasma solution and why it matters. Basically, Plasma solution is a proposed framework for enforced execution of smart contracts that is theoretically scalable to billions of state updates per second. This is made possible because Plasma permits child blockchains within the core or root blockchain.
With Plasma implementation, Ethereum blockchain can support a massive amount of financial dApps (decentralized applications). These smart contracts inside Plasma implementation will be incentivized by the network fees so they can operate autonomously. Plasma is considered important because the Ethereum network is too slow and realistically it must implement a significant scaling solution before the mainstream world can take it seriously.
Fortunately, OmiseGo team has been leading the development of Plasma, and their version of Plasma implementation is most likely the most complex and most effective among them all. With OmiseGo’s plasma implementation, basically, the proof of stake consensus algorithm is already folded into Plasma that works as a child chain and root chain framework between Ethereum (as the root chain) and OmiseGo (as the child chain). The root chain’s function here is for settlement and security while the child chains will settle different things without the need to ‘involve’ the root chain for every confirmation.
For you who are still confused, you can see Ethereum as the root of a tree. Meanwhile, child chains act as the ‘branches’ of the same tree. So, in this case, each plasma contract has its own function while the root chain functions as the base truth. This illustration below is the perfect analogy for an easier explanation:
Image credit: hackernoon
OmiseGo finished its initial coin offering (ICO) on June 23rd, 2017. The team successfully raised $25 million, which was considered a huge amount of money at the time. OmiseGo’s goal was to be financially inclusive, to bank the unbanked, and disrupt the traditional centralized financial institutions. And the team plan to achieve these goals is through the Plasma implementation. Without significant scalability solution to the Ethereum blockchain, OmiseGo wouldn’t be able to ‘achieve’ its goals.
The team behind OmiseGo itself is called ‘Omise,’ a Thailand-based payment gateway company that provides white label and secure solution for businesses. The main people behind the project are CEO Jun Hasegawa and COO Donnie Harinsut. There are a lot of famous advisors for the project including Ethereum co-founder Vitalik Buterin, Lightning Network co-founder Joseph Poon, and Bitcoin Cash popular figure Roger Ver.
Purpose of OmiseGo
Image source: https://www.tokendaily.co/blog/a-deep-dive-into-omisego
As we have written above, the purpose of OmiseGo project is to decentralize the payment network and to create a public financing system across geographies and applications. Since its ICO, OmiseGo team have been involved in several different products, including the wallet Software Development Kit (SDK), its own version of decentralized exchange ODEX, and the OmiseGo eWallet Suite. To achieve its goal, OmiseGo team believe it has to introduce several different applications to the community. One of their ‘main hope’ is their OmiseGo eWallet Suite, where it is specifically used to link business customers to a digital marketplace.
To understand the general purpose of OmiseGo network, let’s take a look at success stories of OmiseGo use cases. Burger King Thailand, for example, launched its own version of eWallet. Their eWallet utilizes OmiseGo eWallet Suite. The reason why Burger King Thailand needed its own version of eWallet was simply because of the loyalty program. Burger King Thailand believes customer spending and retention are quite important for the survival of the franchise in the country. And thus, they utilize OmiseGo eWallet Suite for the back-end support of Burger King Thailand’s eWallet.
Another example of successful use case of OmiseGo network is to support a decentralized video gaming assets marketplace of a game called Plasma Dog. Plasma Dog is created by Hoard Exchange. The idea is to have a global marketplace to buy, sell, rent, trade gaming assets in a decentralized infrastructure. The requirements of Plasma Dog were massive but fortunately the OmiseGo Network is capable of handling them. 28500 transactions were executed in just one day of Plasma Dog game transactions back in February 2019.
Issues and Controversies
Image source: https://nirolution.com/ethereum-plasma/
There haven’t been many controversies surrounding the OmiseGo project. Mainly because OmiseGo has not been discussed a lot by the crypto community after its rise to fame in 2017. There is one fair criticism which is the ‘slowness’ of the Plasma implementation. After finishing the MVP for Plasma Cash, currently, the OMG team is working on Plasma Bootstrap.
Most people are aware that full Plasma implementation takes a long time before people can see the benefit it gives to the main Ethereum blockchain. However, some people are getting ‘desperate’ because they have always foreseen Ethereum as the future of blockchain and decentralized apps. At the current state, Ethereum is not exactly that different from 2017 despite all the proposed scaling solutions since many years ago.
The issue here is not exactly with development but with ‘time’. If Ethereum scaling solution developments (including Plasma implementation of OmiseGo) take too much time, people are afraid that most enthusiasts will run out of their patience and will choose to adopt other blockchain network or even stay out of blockchain completely.
Partnerships and Working Products
Image source: https://www.burgerking.co.th/?lang=en
OmiseGo has impressive names as their partners. Perhaps the biggest ‘partnership’ comes from Japan. Nomura, a Japanese financial giant, is currently funding Omise, which is the parent company of the OmiseGo network. Apart from Nomura, OmiseGo also has successfully achieved a partnership with Quantstamp. Quantstamp is a smart contract security startup that does manual audits along with other security tasks. Quantstamp successfully audited OmiseGo’s MVP implementation.
And of course, OmiseGo new products also have achieved some significant partnerships. Burger King Thailand uses OmiseGo eWallet Suite to build its eWallet. Shinhancard’s loyalty program also utilizes OmiseGo network. Last but not least, the Hoard Exchange’s Plasma Dog also utilizes OmiseGo network for its decentralized gaming assets marketplace.
OmiseGo Token (OMG) In The Crypto Market
Unfortunately, OMG achievements and developments are not reflected in the crypto market. OmiseGo token (OMG) price is not very impressive compared to many other altcoins. At the time of this article writing (September 25th, 2019), one OMG token is worth $0.806857 USD. The market cap is $113,158,003 USD with less than $60 million daily trading volume. OMG is currently ranked 43rd in the crypto rankings by market cap.
Crypto market is a bit irrational when it comes to price action. Many people have been trying to ‘connect the dots’ between fundamentals and price movement, but so far, most of these so-called experts have been wrong over and over again. It’s a bit hard to understand why OMG has fallen behind many other altcoins with fewer fundamentals in the crypto rankings. Some of the most rational explanations typically use ‘trading bots’ as the explanation. It’s no secret that many whales are utilizing trading bots and usually these trading bots don’t care about a project’s technical development.
When it comes to competition, there is no direct competition to OmiseGo project. Some people have been ‘comparing’ OmiseGo’s plasma implementation to LeapDAO plasma mainnet, but they are targeting and solving different use cases. People believe the biggest competitors to OmiseGo is Ethereum competitors. It means the risk of OmiseGo’s lack of adoption will be the adoption of other blockchain platforms. If Ethereum becomes less popular and some other new fancy blockchain networks get adopted by the mainstream world, it’s possible that people will gradually forget OmiseGo.
OmiseGo is a promising and ‘real’ project trying to provide solutions to many financial issues. While it is a solid project but some critics believe OmiseGo is trying too much to be an ‘all-in-one’ solution and sometimes it makes people feel you cannot stand out if nobody can remember what your network’s primary use case besides to create a complex-yet-effective Plasma solution. That being said, OmiseGo is still a solid project, and OMG token has a really positive future in the crypto space.