OmiseGo saw the biggest gain out of any top 40 currency today, rising in a bull run to a high of $5.2, up from around $3.40 earlier today.
The token has increased 5 fold in just a week, taking 17th position, above Zcash. It now has a market cap of nearly half a billion, with trading volumes rising to more than $100 million.
The bullish turn follows the announcement of a new protocol called Plasma developed by Joseph Poon, the lead dev of OmiseGo, in collaboration with Vitalik Buterin.
OmiseGo aims to create a decentralized exchange without trusted gateways by using smart contracts for liquidity pools. As we explained previously, OmiseGo is working on:
“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.”
Considering the millions of transactions that happen on an exchange, OmiseGo needs considerable scale which Plasma may provide.
The new protocol creates a “child” blockchain that operates independently most of the time, but depends on the ethereum blockchain for ultimate validation.
That allows for far higher scale because most transactions happen on the child blockchain, which can have its own child blockchain all the way down.
So the OmiseGo exchange won’t need to create millions of transactions on the ethereum blockchain, but on their own chain or chains – which they’ll probably call the OMG blockchain.
The OMG blockchain requires lesser resources for validation because it can employ the ethereum blockchain in case of misbehavior to punish the malicious actor and to correct the misbehavior.
In the process, giving plenty of capacity to the decentralized exchange while also providing instant transactions so that trading can be a smooth experience.
The protocol is being developed for OMG, but it’s generic. Other token projects can use it too, and other blockchains can also incorporate its own version.
But the announcement is clearly showing OmiseGo is making progress, so traders have seemingly turned bullish, raising by nearly 10x the profits of pre-ICO OmiseGo investors.