What is OMG?
The OMG Network, previously known as OmiseGO, is a decentralized, public network that facilitates peer-to-peer transactions at high throughput and low cost. Built on Plasma, a framework created by Ethereum co-founder Vitalik Buterin and blockchain expert Joseph Poon, the OMG Network employs Layer-2 architecture to provide safety guarantees and high throughput for decentralized payment apps built on the Ethereum network.
The platform allows users to access, manage, and deal with digital assets stored securely on the blockchain. It builds a value transfer layer on top of Ethereum by combining Ethereum transactions and verifying them through a speed-optimized child chain before returning them to the Ethereum blockchain for confirmation. Child chains, also known as plasma chains, are connected to the main Ethereum chain and operate as separate blockchains.
The scalability limitations of Ethereum have been a long-standing problem in the blockchain industry. Ethereum can only handle about 14 transactions per second due to the intensive procedures required for verifying data. However, the OMG Network solves this problem by implementing More Viable Plasma (MoreVP), a scaling system that significantly increases transaction throughput. The OMG Foundation bundles transactions, compresses them into a single transaction, and verifies them on the OMG Foundation child chain. The child chain then returns confirmed transactions to Ethereum for blockchain confirmation, enabling the OMG Foundation to process thousands of transactions per second.
The bundling technique used by the OMG Network significantly reduces transaction costs, as gas fees are paid on the compressed transaction rather than each individual transaction. As a result, transaction costs are one-third of what they would be on Ethereum.
The OMG Network offers several advantages over traditional payment systems, including fast and low-cost transactions, global accessibility, and interoperability across asset types and applications. Additionally, the network's decentralized nature ensures security and transparency, eliminating the need for intermediaries and reducing the risk of fraud and censorship.
OMG is used by various decentralized finance (DeFi) applications, such as decentralized exchanges (DEXs), lending platforms, and stablecoin issuers. These applications benefit from the network's high throughput and low transaction costs, making it an attractive option for developers and users alike.
In conclusion, the OMG Network is a decentralized, public network that facilitates fast, low-cost, and secure peer-to-peer transactions. Built on Plasma and employing Layer-2 architecture, the network addresses the scalability limitations of Ethereum by implementing More Viable Plasma (MoreVP). The OMG Network is used by various DeFi applications and offers several advantages over traditional payment systems, making it an attractive option for developers and users seeking fast, low-cost transactions and global accessibility.
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