OMG Network, previously known as Omisego, is an Ethereum layer-2 solution that aims to make ETH transactions faster and way cheaper on the transaction fees. But let’s find out what is OMG and how it plans to fix Ethereum’s scalability problems.
Ethereum, the second coin by market capitalization, has been dealing with scaling issues ever since it’s been widely used for dApps, NFTs etc. The scaling issues have caused Ethereum transactions to become slow, and the transaction fees have been rising, making it hard for normal crypto users to use Ethereum and other ERC-20 tokens running on Ethereum’s main network.
After all, people have been joining the crypto community because the transaction fees (gas fees) are relatively cheaper than banking systems, and the transaction speed is also higher than the banking system, which Ethereum doesn’t check any of those two benefits of using cryptocurrencies.
After crypto enthusiasts and Ethereum users’ complaints about Ethereum’s clogged network and a peak in Ethereum transaction fees, a lot of projects claimed they are the solution to Ethereum’s scaling issues. In reality, though, a lot of those projects would fail to make their promises happen, at least on some levels.
What is OMG Network?
During OMG Network’s initial coin offering (ICO) in 2017, the platform was supported by 25 million dollars. SYNQA, The OMG Network parent firm, has recently raised 80 million dollars more in Series C funding. The OMG project was also supported by other companies like Toyota Financial Services Corporation and Sumitomo Mitsui Banking Corporation.
As we mentioned above, the OMG network’s main goal is to help ETH become a more hospitable platform for tokens to use, and to enable users to make transactions faster and cheaper than what it is now. Ethereum is facing scalability issues, and OMG Network’s take on it is to be a layer-2 solution. Now let’s find out exactly how OMG Network plans to do that and how it works.
How does OMG Network work?
The OMG Network is based on a novel scaling solution called MoreViable Plasma. The MoreViable Plasma solution uses a sidechain architecture, it groups several off-chain transactions into a batch and then passes them off to be verified on Ethereum main chain as a single transaction.
To put it simply, the solution here is to group a bunch of various Ethereum transactions and verify the group of them on the Ethereum main net as a single transaction. In this method instead of paying a transaction fee on every single transaction, we pay the transaction fee needed for a single transaction to verify the batch of transactions all at once. In doing so, the transaction speed is greatly affected as nodes need to verify one transaction instead of 50 (for example).
According to the OMG foundation, the OMG Network has the potential to confirm thousands of transactions per second on the Ethereum root chain instead of 10 to 14 transactions per second (amount of transactions per second Ethereum 1.0 is currently capable of).
The OMG token is the utility token that powers the OMG Network and is the payment method used to pay fees on the OMG Network. The OMG token will eventually be stakable, allowing stakers to secure the network in return for rewards for doing so.
Is OMG Network a dead project?
Since Polygon (previously known as Matic) and Arbitrum were drawing more attention, demand and were able to build a functioning ecosystem, OMG Network was considered a dead project with no utility. The fusion with the Boba network is a way for the project to gain net utility and help its community by gaining back some attention.
“From a community perspective, we’re lucky to have inherited the OMG network. We have a DAO and a token, so BOBA token holders can participate in the governance of the network. We are also sharing the profits generated from the network with our token holders.” Alan Chiu – founder of Boba network.
Boba Network brags about its lower gas fees and improved transaction and doing all of these while being compatible with Ethereum. The Boba network project claims that in doing so, the DeFi applications and NFTs that are too expensive for everyday users will become affordable on Boba Network.
Boba Network offers fast exits as well and this is made possible by the community-driven liquidity pools. Boba NFT Bridge allows NFTs to be launched on Boba Network and then bridged to Ethereum. By doing so, users benefit from both Ethereum’s secure and decentralised network and fast and cost-efficient transportations of the Boba network.
Who owns OMG Network?
Formally known as Omisego (OMG), the OMG network is a subsidiary of GBV. Their mission is to enable open financial services that are fast, cheap, and secure. The OMG Network is the quickest and most affordable way to transfer ETH and ERC20 tokens globally and without restrictions. As recently OMG is fusing with the BOBA network and you may have a hard time finding the formerly known OMG Network.
Are OMG and OMG Network the same?
OMG is the native cryptocurrency of the OMG Network (OMG), a blockchain ledger built on top of the Ethereum blockchain which makes the OMG network a layer-2 blockchain. OMG network aims to speed up transaction times and reduce transaction fees by handling Ethereum transactions off of Ethereum’s main network. Like other platforms, the OMG Network has its own native token named OMG. The platform and their native token shouldn’t be mixed up with each other, although a lot of platforms are represented by their native tokens.
Is OMG Network proof of stake (PoS)?
The OMG network ultimately will move to the Proof of Stake (PoS) consensus system. This system will enable users to delegate their tokens to validators, by doing this users are able to earn profit by staking their tokens. The proof of stake consensus algorithm works by investors taking a portion of their OMG tokens to help secure the network and be rewarded for it after a period of time.