Ethereum, the second most expensive Cryptocurrency in the world, has been grappling with scaling issues for some time now. Many of us got into the Crypto space because of the lower cost of transactions at the speed of lightning.
But here is the case where Ethereum transactions need a long time to clear coupled with expensive transaction fees. It leaves a sour taste in the mouth of users, consequently, slowing adoption.
Strengthless throughput has been the bane of the Ether network with approximately 500,000 in a day at 13 transactions per second. The obsolete systems, like visa with intermediaries are even clearing 150 million transactions in 24 hours.
It is pretty ridiculous, right? Ethereum needs to overcome this challenge by redesigning of nodes to be able to handle more than one transaction. The Core Team has been promising solutions, notably Ethereum 2.0, but anything is yet to manifest.
Of course, this brings to mind the famous Cryptokitties that got the ETH network choked, exposing its vulnerabilities. That was when most people realized dApp host is going to overwhelm the network.
Meanwhile, the debate about on-chain and off-chain solutions are still raging on amidst both schools of thought proposing and implement some valid points. If you critically analyze the drift, it seems off-chain antidotes are becoming prevalent and supportive.
OMG’s Off-Chain Solution
OMG, formally known as OmiseGo, a Thai based company with an interesting, history has an off-chain solution to scale Ethereum, impeccably. The Network describes itself as trustless, non-custodial, Layer-2 scaling solution for exchanging value on the Ethereum Blockchain. The most striking thing about the project is the pedigree of the brains behind it. They have men like Roger Ver, Vitalik Buterin, Vlad Zamfir, Joseph Poon, and Dr Gavin Wood as advisors.
It allows you to transfer all ERC-20 tokens for three times lower the cost than on the ETH Blockchain, and secondly in real-time. In comparison, while Ethereum still operates with 14-20 Transactions Per Seconds (TPS), OMG runs 4000 in the same time frame.
dApps atop the OMG Network operate more expeditious and affordable without jeopardizing the security of the Ethereum Blockchain. Very soon, the native currency will be the utility for staking, which will be the responsibility of watchers verifying transactions. Again, the OMG token is what you can use to access services.
On June 1 2020, Vansa Chatkavaniji, CEO at OMG stated that to empower true global commerce, there is the need to engage permissionless transactions that can accommodate multiple parties and forms of money. Blockchain already allows for this, but until now has been unable to scale to meet global demands.
“Finally, the OMG Network accomplishes all of this with the security of Ethereum and at a fraction of the cost. It is a major milestone in what will continue to be a long and exciting journey,” said Chatkavanij announced.
According to her, the OMG Network applies the More Viable Plasma (MoreVP) specification to increase the processing capacity of Ethereum. Plasma is the handiwork of some of the most prominent Devs in the Blockchain space. It was developed by Vitalin Buterin and his associate Joseph Poon.
The whitepaper explains the protocol as:
“A proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the Blockchain to be able to represent a significant amount of decentralized financial applications worldwide. These smart contracts are incentivized to continue operation autonomously via network transaction fees, which is ultimately reliant upon the underlying Blockchain (e.g. Ethereum) to enforce transactional state transitions.”
Plasma uses a trustless mechanism to scale Ether and ERC20 transactions through arranging them collectively and transferring them into an assortment of Ethereum Smart Contracts. Those grouped transactions are later confirmed and approved by a decentralized system of watchers.
The processing of groups of transactions allows a large throughput of thousands of TPS. The outcome is reducing transaction cost by one-third while maintaining Ethereum level security and great user experience.
Join the Community
Per data from CoinMarketCap, OMG has over 30 pairs and listed on countless of exchanges like OKEx, Binance, Huobi Global, BitForex, DigiFinex, Coinbase Pro, HitBTC, Bione, ZB.COM, Bibox, DragonEX, BKEX, Bitmart, BW.com among others.