OmiseGO (OMG) aims to become a decentralized, universal payment processing platform built on the Ethereum blockchain. The OmiseGO platform is powered by the OMG token and will allow people, businesses, and organizations to send and receive payments in digital currencies as well as fiat. In effect, OmiseGO hopes to replace legacy payment systems like SWIFT, ACH, and Western Union. According to the website, the mission of OmiseGO is “to enable people to securely access financial services, invest, exchange and spend digital assets anytime, anywhere.”
The OmiseGO project was founded in 2017. The company behind OmiseGO is Omise, a payment gateway provider headquartered in Thailand. The team is led by Jun Hasegawa (CEO). Before Omise, Hasegawa was a Director at Alpha-do Inc and the co-founder and CEO of LIFEmee Inc. Since 2013, Omise has been facilitating cross-border payments in six Southeast Asian countries. Omise is also a payment processor for Alipay, which at the time of this writing is the world’s largest mobile payment platform in the world with over 1 billion users.
OmiseGO’s list of advisors includes some of the biggest names in the cryptosphere including Vitalik Buterin (co-founder of Ethereum), Gavin Wood (also a co-founder of Ethereum), Roger Ver (Executive Chairman of Bitcoin.com) Julian Zawistowski (Director of the Golem Foundation), and Joseph Poon (co-creator of the Lightning Network).
OmiseGO is building a second layer blockchain on top of the Ethereum network using Plasma architecture. Plasma is a layer 2 solution for Ethereum that provides a framework for building ‘off-chain’ decentralized apps that are fast, secure, and scalable. The OmiseGO ecosystem will consist of a decentralized exchange, liquidity provider mechanism, clearinghouse messaging network, and asset-backed blockchain gateway. With these features, developers can create dApps that offer services like payments, remittances, loyalty programs, and much more.
OmiseGO was created to solve the fragmentation and centralization problems found in the payment processing industry. Countries have different regulations and many payment processors are incompatible with their competitors which makes it difficult for ordinary people to send value across borders. In addition, because these payment processors are centralized, they are vulnerable to hacks.
The ultimate vision of the OmiseGO platform is to launch its own mainnet and allow users to send, receive, and exchange all cryptoassets as well as fiat currencies. OmiseGO is creating a white-label software development kit (SDK) that will allow businesses and organizations with a unit of value (e.g., reward points, fiat currency, cryptocurrency) to create their own branded wallets which will interact with the OmiseGO platform. It is also creating a non-custodial decentralized exchange that will facilitate the swapping of the asset by bonding ETH to a smart contract. For example, if Bob wants Alice to send him Yen but Alice only has US dollars, Alice can send Bob the US dollars using the OmiseGO platform and the decentralized exchange will automatically swap the USD to ETH, then the ETH will be swapped for Yen. Now that it is in the currency that Bob initially requested, the money will be sent directly to Bob.
The settlement and clearing of transactions will occur on the OMG blockchain. The underlying Ethereum blockchain will only be utilized to record the blockchain state. This configuration allows the project to (theoretically) adopt cross-blockchain compatibility at the second layer. According to the white paper, Bitcoin and Bitcoin-like systems will be allowed to trade on the OMG blockchain “via a clearinghouse network on the Lightning Network.”
The project uses a proof-of-stake (PoS) consensus algorithm. Validators must stake OMG tokens in order to have a chance of verifying new blocks. The validators earn fees from validating the activity of the blockchain. If a validator behaves improperly, including deviating from consensus rules, their staked tokens will be burned on the OMG blockchain. All OmiseGO validators must also run a full Ethereum node since staked OMG tokens are stored on the root chain.
In July 2017, the project canceled its public ICO because they reached their fundraising goal of $25 million during the pre-sale. Following the pre-sale, a total of 140.2 million OMG tokens were created. 91.3 million (65.1% of total supply) were distributed to participating investors. 28.0 million tokens (20.0% of total supply) were allocated to OmiseGO for the continued development of the platform. Team members received 13.9 million (9.9% of total supply) tokens. The allocations to the project and the team members were subject to a one-year lockup period.
In September 2017, OmiseGO conducted an airdrop. Anyone holding a minimum of 0.1 ETH could receive a portion of an OMG token for free. A total of 7 million tokens (5% of total supply) were given away for this airdrop.
In April 2019, OmiseGO announced the public Alpha release of the OMG Network on the Ethereum test net. The project claims they have been able to process millions of transactions with a peak throughput of over 2,700 transactions per second. At the time of this writing, the Ethereum blockchain supports roughly 15 transactions per second.