- OmiseGO (OMG) is a decentralized financial technology platform.
- The OMG Foundation implements More Viable Plasma (MoreVP).
- OMG Foundation’s bundling method allows for faster processing of transactions.
A decentralized financial technology platform based on the Ethereum blockchain is called OmiseGO (OMG). Peer-to-peer transactions will be made simple and secure and it will also offer financial services to unbanked and underbanked people all over the world. The project was started in 2017 by the fintech business Omise in Thailand.
OmiseGO, which was created to address the Ethereum network’s scalability issues and high transaction costs, primarily functions as a Layer-2 scaling solution for Ethereum. It makes use of a Plasma-based technology, which is a foundation for building child chains capable of processing transactions independently and periodically settling the outcomes on the Ethereum mainnet.
Limitations and Solutions
Ethereum has scaling restrictions. Scalability is the capacity of blockchain technology to accommodate high transactional throughput and future growth. Only 14 transactions can be completed on Ethereum every second. This occurs as a result of the extensive procedures that blockchain networks utilize to validate the data. Scaling has always been closely scrutinized in the blockchain industry.
OMG Network implements a scaling technique called More Viable Plasma (MoreVP) to significantly boost transaction throughput in order to address the scalability issue. Transactions are bundled, condensed into a single transaction, and verified on the OMG Foundation child chain by the OMG Foundation specifically. The confirmed transactions are subsequently sent back to Ethereum’s parent chain for blockchain confirmation.
Due to this, the OMG Foundation can process hundreds of transactions every second. Transaction costs are one-third of what they would be on Ethereum because gas fees (transaction fees on Ethereum) are paid on the bundled, compressed transaction rather than each individual transaction.
Key Elements of The OmiseGO Ecosystem
OmiseGO Network: The network comprises a clearinghouse and a decentralized exchange (DEX). The DEX gives users more power and transparency by enabling them to exchange different digital assets without using a centralized middleman. While handling the settlement of transactions across several child chains, the clearinghouse maintains the network’s integrity and security.
Proof-of-Stake or PoS: OmiseGO uses a Proof-of-Stake (PoS) consensus mechanism in which token holders risk their OMG tokens to take part in network validation and receive rewards. Comparing this method to conventional Proof-of-Work (PoW) systems, it offers energy efficiency and enables a larger transaction throughput.
Wallet Software Development Kit (SDK): OmiseGO offers an SDK that enables developers to build wallets and integrate them with the OmiseGO network. Users can safely store, manage, and transfer their digital assets using this SDK.
DEX: Peer-to-peer asset exchanges are made possible via the OmiseGO ecosystem’s decentralized exchange (DEX). Users can transact in a variety of cryptocurrencies and tokens directly, obviating the need for middlemen and boosting market efficiency and liquidity.
Fiat Gateway: OmiseGO’s Fiat Gateway promises to close the gap between conventional fiat money and digital assets. It makes it simpler for customers to convert between fiat and cryptocurrency by offering seamless integration for crypto-to-crypto and fiat-to-crypto transactions.
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