OMG is the native cryptocurrency of the OMG Network (OMG), a blockchain network built on top of the Ethereum blockchain that speeds up transaction times and reduces transaction fees by handling Ethereum transactions off of Ethereum’s main network. The open-source project ensures a scalable and secure system for decentralized applications (dapps) and crypto transactions on Ethereum.
The OMG token has a total supply of 140.2 million, all of which were released during the initial launch. According to the project’s initial white paper, OMG was designed as a way to facilitate payments on the Omise platform using the Ethereum network in a more scalable manner.
When OMG switched from OmiseGo to the OMG Network, the token became a utility and staking token that allowed users to run validator nodes on the OMG proof-of-stake (PoS) network. Although validation could be done through staking, OMG doesn’t feature any on-chain governance functionality.
OmiseGo’s OMG initial coin offering from June to July 2017 raised $25 million in ETH. The majority of the funds were used by the development team at a 2:1 ratio between network and end user application development. The rest was used to pay for regular business expenses. Tokens were both publicly and privately allocated as follows:
- 65.1% of the tokens issued at the sale were issued to ICO participants.
- 5% of tokens were airdropped after the ICO to every ETH token holder as a way to promote the use of OMG.
- 20% were held in reserve by OmiseGO, with a lockup period of one year, for future costs and fees for the development of the project.
- 9.9% of OMG were distributed to key contributors and team members of the project, subject to a one-year lockup.
OMG hit its all-time low of $0.3197 in July 2017 shortly after the ICO. As a way to promote OMG, the development team decided to airdrop 5% of the total OMG supply to all Ethereum token holders. Although the token fell from the promotion, it proved to be successful. In the next month, as OMG soared over 2,000% to a high of $7.34.
OMG’s price reached its all-time-high of $28.35 in January 2018 during the peak of a crypto-wide bull run. After briefly falling below $10 during a broad crypto market crash, OMG reclaimed $20 following its listing on major Asia-based exchanges Bithumb and Zebpay.
How does OMG work?
The OMG Network uses Plasma, which is a layer 2 scaling product for Ethereum that commits every block on the Plasma chain to the Ethereum chain. Plasma is primarily used to deposit funds from Ethereum to the OMG Network, making transactions on the OMG Network and returning funds back to Ethereum.
OMG uses a proof-of-stake (PoS) consensus algorithm that enables users to stake their tokens (deposit them into a smart contract) and receive transaction fees and block rewards for blockchain validation. Returns via transaction fees are distributed proportionally to the amount of OMG a user stakes.
Key events and management
OMG Network (then OmiseGo) was co-founded by entrepreneurs Jun Hasegawa and Ezra Don Harinsut in 2015 as a subsidiary of their parent company Omise Holdings, a Thailand-based fintech. During their time at Omise, the duo began working on open-source blockchain products, contributing to the Ethereum Foundation alongside Microsoft and Wanxiang Group, a Chinese multinational company that operates one of China’s biggest auto-parts makers.
Between August 2014 to June 2020, Omise Holdings raised $100.4 million via private venture capital funding rounds from investors including SBI Investments, SPARX Group, SCB 10X Capital, Mitsui Fudosan, 31Ventures, Toyota Financial Services and others.
In May 2020, Omise Holdings announced that it was changing its name to SYNQA in order to distinguish itself as a holding company separate from the Omise platform and OmiseGo token. In an effort to further differentiate its products from its brand, SYNQA rebranded its OmiseGo blockchain system to the OMG Network one month later.
In December 2020, OMG Network was acquired by Genesis Block’s Hong Kong-based trading firm Genesis Block Ventures. Following the news, OMG rallied over 18% from $3.74 to $4.41. Two months later, data privacy developer Enya announced a strategic partnership with the OMG Network to jointly develop layer 2 products.
In September 2021, Enya announced the mainnet launch of a new Ethereum layer-2 scaling system called the Boba Network. Enya is a core contributor to the OMG Foundation, which represents the joint development of products created by OMG and Enya. The Boba Network plans to offer a 1:1 drop of BOBA tokens to OMG holders who are willing to transfer their token to the Boba Network.