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What is OmiseGO token (OMG)

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Avatar for nervi
Written by   5
7 months ago

I think everyone will agree that Ethereum's scalability as of today is something that leaves a lot to be desired. This problem is not easy for the Ethereum community to solve. OmiseGO hopes to solve this problem. Or actually OMG Network, since it has changed its name. It promises faster transaction times and lower transaction fees.

So what is OMG really?
It is a layer two solution for sending transactions that do not require permission on the Ethereum network. Using such traffic, we reduce transaction fees and the transaction time itself. The idea behind OMG is to help with Ethereum's scalability problem.

The principle of OmiseGO is quite simple. OMG network is a solution called Layer 2 by the community. Layer 2 is based on an existing blockchain, namely Ethereum. Due to the fact that transactions are carried out as if outside the Ethereum network, space is freed up in the blockchain. Simple right?

OMG Network provides the same security as Ethereum, only it provides lower transaction fees and the time of these transactions is faster. Importantly, it works with ERC-20 tokens, and as we know, using the Ethereum network can be very expensive. What also makes you think that the OMG network is a success? Part of Tether's supply has been issued on the OMG network.

OmiseGO is an important project.

Network congestion is a problem we are seeing more and more in Ethereum. As we know, transactions are relatively fast, but when the price of gas gets higher and higher the delay can be even a few days (I personally conducted a transaction for which I waited more than 30 hours!). Therefore, the network works in such a way that transactions with higher gas are prioritised and enter the queue first. If, when signing a transaction, we assign a lower gas, i.e. a lower fee, we can only watch as our transaction waits in a long queue to get into the block and finally go out into the world. What is the effect of this? When the load on the network increases and with it gas prices then transactions wait for hours or days and only very expensive fees can get into the blocks. So why wait for a network release or lower gas when you can use Layer 2?

That's why the OMG network is so important. It solves this problem by going all in on white with cheap and fast transactions. It can handle thousands of transactions for a fraction of the amount of commission in Ethereum. This is a potential for DeFi projects, where at the beginning and end of our adventure with them, we have to approve a few transactions and then we care about time and money.

Now a little about the token itself. It is a token based on Proof of Stake protocol and its name is OMG. It was used to finance the project. We also use this token to pay transaction fees on the network. Because it is an ERC-20 token, we can store it on many different wallets, for example Ledger or MetaMask.

This is a project that has proven that it has the right to work and it works well. It solves, in a way, a problem that Ethereum cannot cope with and this is an issue that must be a priority for the future of this project.

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Avatar for nervi
Written by   5
7 months ago
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