Profiling the Elevatyr Core 12: Why OmiseGo is the Decentralized Exchange of the Future
OmiseGo (OMG) is the Thailand based subsidiary of parent company Omise, whose goal is to set up a payment gateway for merchants in Southeast Asia.
OmiseGo is a scaling solution for finance that runs on the Ethereum blockchain and is scaled with Plasma architecture. Their currency, OMG, is governed by a Proof of Authority consensus, which was implemented to keep the network secure after their 25 million dollar ICO was completed in Q2 of 2017. The company’s roadmap indicates that OmiseGo plans to change their governance to a hybrid of Proof of Authority and Proof of Stake and eventually entirely to Proof of Stake sometime after 2018.
The OMG project is best explained by dividing up their 3 main goals; creating a non-custodial decentralized exchange, integrating Plasma technology into their network, and developing a wallet SDK to promote application development.
A non-custodial decentralized exchange
There’s a battle in the crypto space between centralized and decentralized exchanges. Both have a unique set of advantages and disadvantages, but centralized exchanges such as Binance are far larger, trading almost 100x more daily volume than the largest decentralized exchange, IDEX, which holds over 80% of the market share for decentralized exchanges.
The primary advantages of a centralized exchange are order matching and a support staff, which are two key features for inexperienced traders. Decentralized exchanges, alternatively, eliminate the middlemen who take large fees and keep the responsibility of security on the users, relieving the exchange of a central point of weakness.
Custody in the crypto space is decided by who exactly is in possession of the desired token at a specific time. If you have your coins on an exchange, then the exchange is the custodian of those coins even though they are in your account and custody of the coins is only transferred to you after you withdraw the coins from the exchange.
A part of what makes centralized exchanges so convenient is that you are trusting them with the custody, which allows gives you features like the ability to set stops on your orders and match you with buyers. OmiseGo is developing a “non-custodial decentralized exchange,” meaning that their exchange will allow you to be in charge of the security of your funds while not having to pay the fees commonly built into centralized exchanges.
A lack of liquidity is the second large fault of decentralized exchanges. Their difficulty to use and lack of convenience lower number of investors on decentralized exchanges, keeping volume very low. This means that taking out a large position in a small market cap coin could shift the price drastically because there aren’t enough orders on either side of the market price. OmiseGo has begun and plans to continue purchasing other smaller exchanges and using the technology behind decentralized exchanges to take orders from multiple exchanges to keep the order book full.
OmiseGo plan to turn the disadvantages for decentralized exchanges into strengths for what they plan to be the largest cryptocurrency exchange. By solving the central issues of custody and a lack of liquidity, OmiseGo can position itself to own a significant portion of the cryptotrading market.
Plasma and OmiseGo
Plasma is a project developed by Joseph Poon (Co-Author of Bitcoin’s Lightning Network) and Vitalik Buterin (Founder of Ethereum), who are also both advisors of the OmiseGo project. The tech at its core is similar to a nested loop. Because OmiseGo runs on top of the Ethereum, Blockchain, consider its operations inside of loop one. The operations that take place on the Ethereum Blockchain will be loop 2. If we run these separately, all of the information in loop one must be played out, then sent to loop 2, and eventually, loop 2 must run and give us our final product. Plasma technology nests these loops so that the operations are being run simultaneously and all of the information from the OmiseGo operations doesn’t need to be sent to the Ethereum blockchain. This keeps the Etherueum blockchain clear of excess information allowing both chains to run at a faster speed.
Plasma technology theoretically has the potential to allow for billions of transactions per second. Implementing this technology into the architecture of OmiseGo will allow them and all of the projects built on top of their platform to run at a speed far greater than any project currently at market.
Wallet SDK Development
Wallet SDK development is the seed being planted that will grow the project for a long time to come. The first version was very recently released and allows developers from other projects, or recreational developers, to create their own applications and use OmiseGo as the gateway for the payments on what they create.
OmiseGo can be traded on select cryptocurrency exchanges, and will be available for trading via Elevatyr, which will be entering an early access period in July. Visit https://www.elevatyr.io/ to sign up for the closed beta waitlist, and to learn more about how Elevatyr is the simplest way to intelligently trade cryptocurrencies.
For those interested in learning more about OmiseGo, you may visit OmiseGo’s website at https://omg.omise.co/
Disclosure: This article does not represent an endorsement of the OmiseGo cryptocurrency as an investment, and is for informational purposes only. Trading decisions should be made on an individual basis, and be informed by independent research. Elevatyr makes no recommendation as to trading behavior that should or should not be taken. The author of this article owns a small stake of OmiseGo cryptocurrency.
