How did you fall down the blockchain rabbit hole?
Vansa: I was in Public Infrastructure Financing and Disaster Risk Management at the World Bank. A rule when tackling Infrastructure Finance is that you not only have to build the infrastructure but also need to invest in the community around it. For example, if the World Bank invested in an irrigation system, they would also allot funds to support farmer field schools or rural commerce. The idea was that you couldn't develop one without the other.
Between 2011 and 2014, I spent a lot of time in Myanmar, just when the country re-opened. To pay for construction and work locally, we had to carry bags of single USD bills out to the countryside.
That experience in Myanmar and across a few other emerging economies, got me thinking that there has to be a better way to move money around. Not only within Myanmar but also across the Cambodia, Laos, Myanmar, and Vietnam (CLMV) block of countries. Today, if you look at CLMV countries, Myanmar is still a white-space, mobile penetration rates are extremely high, but local payment rails and banks are almost non-existent.
To pay for construction and work locally, we had to carry bags of single USD bills out to the countryside. That experience in Myanmar ... got me thinking that there has to be a better way to move money around.
I looked at the problem from an entrepreneurial perspective and got excited about the probability of providing a new form of open financial services. That’s when I discovered Bitcoin and how its premise was to move value globally and without restrictions.
As I was trying to find my way around the space, I met Jun and Donnie, who founded a payment gateway company (Omise Payments) and were experimenting with Ethereum for their payment stack. Back then, it was called Omise Blockchain Labs, and they were early contributors to the first Ethereum DEV Grants.
We hit it off, and realized that we had the same belief that people should have the options and ability to transfer money globally, without restrictions.
What was it like going from the 2017 hype bubble, to the “fall of Plasma”, to today?
Vansa: It was an interesting journey, but also something we anticipated. As with any technology, things move in stages, and with each stage, you unlock new use-cases and potential. For example, with the internet, you had dial-up internet, broadband, and now fiber-optic.
It’s the same with blockchain, which is still in its early dial-up days. The core infrastructure to support use-cases like payments and transfers are still not ready for primetime. We experienced that on March 12th, where Ethereum clogged up during peak hours, raising average transaction time to 44 minutes.
The hype period was exciting and important for the scene because it attracted a lot of eyeballs, resulting in an injection of talent and capital. Still, I knew it’d pass and that we had to hunker down and build something. The scalability problem facing blockchain was a big one and wasn’t only about sending transactions; it had implications on other dApps and services running on top of the blockchain as well.
So, our focus since the beginning was to scale Ethereum securely, while making the Network as usable as possible. I realize we sacrificed on the hype with our heads-down approach, but all is well that ends well!
Could you tell us about the public mainnet and what stage that technology is at?
Vansa: We launched the OMG Network V1 Public Mainnet Beta on June 1st, 2020. It’s a Layer-2 scaling solution for Ethereum that’s built on our specification of Plasma, called More Viable Plasma (MoreVP).
At a high-level, three elements combine to ‘create’ the OMG Network.
Layer-1: This is the root chain, Ethereum, which the OMG Network Plasma ‘sits’ on top of. Ethereum hosts a set of Smart Contracts that manage the plasma protocol. These contracts validate/verify deposits and exits on the OMG Network. Once we deploy that contract, we don’t control it directly; it operates per the rules of Ethereum and is the first part of what we consider decentralized security.
Layer-2: The Childchain (OMG Network’s MoreVP), which handles all the transaction processing. The Childchain receives transaction requests from users, validates them, and batches transactions in a block that it sends to the Ethereum Smart Contracts for confirmation.
Watcher Network: The third component is the Watcher. A Watcher is a service that continuously monitors the child chain. This service can be operated by our users, partners, OMG token holders, and anyone interested in observing the child chain. Watchers validate everything that is happening on the child-chain against the root-chain. This is the second part of what we consider decentralized security.
With these three pieces, the OMG Network centralizes transaction processing to achieve scale and decentralizes security by relying on Ethereum’s security guarantees and a Watcher Network.
Vansa: Our approach is to keep things fairly simple and to rely on proven technology, which in this case is Ethereum security. Our focus is to ensure usability.
Any News On Staking?
Vansa: We want to ensure this technology works, so we’ll test it out with our launch partners initially. We’re also getting constant feedback and improvements from the staking pools we’re working with (shoutout OMG Staking Pool!). We’re still optimizing this construction, and we’ll elaborate more as we get closer to our goal.
Are there any use-cases you’ve mapped out?
Vansa: We’re targeting to streams of business:
Open finance: De-FI and Crypto projects. We interact with them through the OMG Developer Portal. That’s where the documentation and API’s are, and it’s a self-serve service for crypto-natives. We encourage all developers to build and use our permissionless value transfer network!
Enterprise: This follows the typical enterprise sales cycle. We’ve been fortunate to get many regional and non-regional enterprise leads because of our payment background. Most enterprise use-cases revolve around payments and loyalty and reward points. We previously worked with Shinhan card to test loyalty and reward points on an earlier version of the OMG Network and received great feedback. Today, we’re working with a car manufacturing company that wants to move into the mobility industry. As the sharing economy expands, most car manufacturers realize the real margins are in leasing, and we’re building a platform to service them. This will take some time since it’s an enterprise, but they’ve been committed to it for the past 8 months. We’re trucking along.
What’s next for OMG Network?
Vansa: We’re working with stablecoin issuers and exchanges like Bitfinex to enable faster, cheaper, and more energy-efficient transfer of assets. We see that payment is the foundation for building additional financial services, and stablecoins represent a massive opportunity to enable financial access for all.
We also want to focus on educational infrastructure to inform people about the crypto-scene and the significance of open and borderless payments via the blockchain.
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