OmiseGO (rebranded to the OMG Network) is a scaling solution for Ethereum that is fully compatible with ERC-20 tokens and ETH.
Ethereum scaling is a hot topic these days (actually, it has been for years). It isn’t an easy problem to solve, and multiple different avenues are being explored by the Ethereum developer community.
One of these is OmiseGO, which recently got rebranded to OMG Network. It promises faster transaction times and lower fees on the biggest smart contract platform. Let’s see how it works.
What is OmiseGO (OMG)?
OmiseGO (rebranded to OMG Network) is a Layer 2 solution for transferring value trustlessly on Ethereum. It aims to reduce transaction fees and times without compromising the security of Ethereum.
In essence, the OMG Network helps solve the scalability issues that Ethereum currently has.
How OmiseGO (OMG) works
This is good news for pretty much anyone using Ethereum. While it has brought forth many exciting innovations, the Ethereum network can become exceedingly costly to use at times, especially for smaller transactions.
The OMG Network is just one such Layer 2 solution amid a sea of competitors aimed at scaling Ethereum, such as Optimism, Loopring, and zkSync.
Why OmiseGO (OMG) is important
In this case, you either pay a higher price for your transaction to go through, or sit around waiting for gas prices to decrease. So, there are two problems with the Ethereum network when it’s under stress: high gas fees and long confirmation times.
OmiseGO (OMG) use cases
Crypto exchanges can use the OMG Network for faster, lower-cost ERC-20 token transactions instead of using the Ethereum network. Much like exchanges, wallet providers can also benefit from fast, high-throughput, low-cost systems.
While we generally think of these sorts of systems in terms of financial assets and cryptocurrencies, the OMG Network can also be used for trustless community points transactions and various other online rewards systems. For example, Reddit’s community points system was shown to be highly efficient when used with the OMG network. This was made possible with the recently developed Community Points Engine (CPE).
The OMG token
The OMG token is a staking token, and it has been used to fund the development of the project. OmiseGO conducted an ICO in 2017, raising $25 million.
OMG is also used for paying fees on the network; however, support for other coins is in development.
The token is also used by validators that run network nodes and validate blocks. They earn transaction fees in return for their service.
How to store OmiseGO (OMG)
The OMG Network aims to solve issues with Ethereum scalability. It’s a value transfer layer that allows for fast transaction times and low gas costs for financial services on the blockchain.