While we’re still getting our heads around ICOs that finish in 30 seconds, the OmiseGo ICO managed to finish before the token sale even started.
Launched by an established Asia based payments provider, Omise – which boasts of being the first to back the Ethereum Foundation’s Devgrants program – the ICO started with a token pre-sale on Bitcoin Suisse, a token investors pool of sorts that requires AML/KYC.
“The attention that the Bitcoin Suisse allocation received was overwhelming. There was an unprecedented rate of funding follow-through,” said Omise in an update of the token sale.
Apparently, 450 people pledged $60 million for a capped sale of $19 million, so “we will not be able to accept contributions from any participants in the second round,” Omise says.
The OmiseGo (OMG) pre-sale opened on June the 7th, with some complaining why it ended so fast, while the ICO was meant to begin on June the 27th, but as the cap was already reached, the ICO didn’t happen.
This significant level of demand can be explained by the whitepaper, authored by Joseph Poon from the Lightning Network who seemingly publicly fell apart with the Bitcoin Core development team earlier this year, so moving his focus to ethereum.
The paper explains in some detail the workings of an ethereum public blockchain-based decentralized exchange that utilized data feeds and smart contracts with the aim of interlinking eWallets, such as say PayPal and WeChat Pay, while allowing for easy interchange of digital currencies, all without any trusted gateways.
It sort of builds on the Lightning Network, using payment channels for scalability, but an interesting innovation seems to be the use of smart contracts for liquidity pools.
“All participants set up channels into an ETH smart contract operating as a single pool of funds. The chain state of the OMG chain reflects the current balance of participants. This allows for any participant to supply liquidity onto this network which can be allocated in accordance to the OMG-chain consensus rules.”
For interchange between currencies, they use a volume weighted average price (VWAP) as a smart contract data feed. That price is “computed and published periodically on the OMG blockchain as a consensus rule.”
The OMG blockchain is not clearly described, but the abstract says they will use “a protocol token to create a proof-of-stake blockchain to enable enforcement of market activity amongst participants.”
It will likely be its own chain, at least eventually, but will remain closely linked to eth with bitcoin nodes and other simple smart contract blockchain nodes able to act as a gateway to the OMG chain.
The overall design creates a decentralized digital currencies exchange that does not have any centralized point and does not require any trusted custodianship of assets, achieved by using:
“smart contracts, protocol tokens enforcing correct market behavior of orderbook matching, a new construction of Ethereum bonded external enforcement of clearinghouse activity, and commitments to historical exchange data for use with Ethereum smart contracts.”
They also aim to allow fiat token exchanges, but how fiat is tokenized is not explained, leaving us to guess that it would probably require a centralized party to back the tokens with fiat.
That centralized party can be eWallets, which can issue tokens on the OMG blockchain. Tokens that can then be interchanged or transferred just as eth/btc.
But even without the fiat part, the project tackles a significant problem, especially as Poloniex keeps attracting complaints. A problem they may be able to address as the team seems capable, and their advisers are some of the most senior experts in this space. So we’ll keep an eye on how the project develops.