As the native token of the OmiseGo platform, the OMG coin facilitates cross-platform payments on the blockchain, making it possible to send assets between platforms without imposing additional costs on the end user.
The OMG coin operates as the part of OmiseGo ecosystem which also comprises a white label eWallet and a smart contract platform. OmiseGo’s goal is to make it possible for its user to move their funds, coins and other assets between blockchains without having to do it via traditional channels such as banks. Knowing that even popular payment platforms such as Visa or PayPal operate as centralized platforms, it is evident that a single authority can have almost a limitless control over financial transactions. This entails data breach risks and generates higher operational costs for the end users. To counter this, the OmiseGO project was initiated by Jun Hasegawa and Donnie Harinsut as the founders of the Omise company whose team of advisors includes crypto veterans such as Vitalik Buterin, co-founder of the Ethereum platform. Back in 2017, the initial coin offering (ICO) for OmiseGO raised more than USD 25 million, followed by the launch of the OMG platform which professed to offer cheap and unmediated transfer of assets across networks. This was combined with the access to the system for the development of decentralized custom wallets.
The platform’s open source eWallet model arguably makes it easier for the developer to produce their own designs and offer app integrations that streamline transaction between wallets. The wallets are built into a decentralized P2P system that allows for the exchange of assets on Ethereum-based blockchain in real time. As OMG is an ERC20 Ethereum-based coin, any standard Ethereum wallet can be used for storing it. In order to make the transaction processing as scalable as possible, OMG started with the implementation of the Plasma solution which will allow it to handle at least as many transactions as Visa or SWIFT, the Belgium-based financial messaging service.
OmiseGo is hardly alone in the market segment dedicated to payment processing, with competitors including the likes of Ripple and Stellar. OMG coin’s role is to provide backing to what its platform promises as its key features. Coins are earned by the users who validate transaction based on Proof of Stake (PoS) model. Holding OMG coins gives the right to validate blocks. Each transaction is followed by the transaction fee which is distributed by the OMG owners. These fees are distributed in proportion with the coins which the users store in their wallets.
As of November 2018, the amount of OMG coins in circulation is 140,245,398, while the coin’s market capitalization stands at USD 465 million, down from more than USD 2.5 billion in early 2018.