What is the OMG Network?

In Blog, Community by OMG Network

Image
This is a two-part series discussing everything you need to know about OMG Network. In part one, we’ll give you a basic overview of the Network and its features.

What is the OMG Network?

The OMG Network is the leading value transfer layer for ETH and ERC20 tokens. It is the first production-grade layer-2 Ethereum scaling solution. With the OMG Network, users can move digital assets faster, cheaper, and at the same level of security as Ethereum.

Why OMG Network?

At OMG Network, we believe the ability to transfer value and make payments is a basic human right. As over 60% of the world gains access to the internet and more commerce moves online, financial systems have to evolve to accommodate multiple parties and transact different forms of money. We already see how diverse and purposeful money can be when we have the freedom to create it ourselves. Some notable examples include LETS (local exchange trading system), cryptocurrencies, in-game items, and reward points.

Current layer-1 networks like Ethereum support these various forms of value but sacrifice high transaction throughput and performance in order to maximize trustlessness and security. To date, this has been an optimal trade-off. However, it has meant that truly decentralised blockchains today are unable to scale to meet global demands. We saw that on March 12th, when the Ethereum network clogged up, pushing the average wait time to send a transaction to 44 minutes.

If we want to see blockchain truly become the backbone of future finance, then a secure scaling solution like OMG Network is a necessary piece of the puzzle.

How does the OMG Network work?

The OMG Network V1 Mainnet Beta uses the More Viable Plasma specification to increase the processing capacity of Ethereum. MoreVP trustlessly scales ETH and ERC20 transactions by grouping them up and sending them to Ethereum for confirmation. Processing batched transactions enables high throughput and significantly lower-cost transactions for the end-user.

A simpler way of putting this would be to compare it to carpooling. Think of each transaction as a passenger in a car. You pay gas to travel between point A and point B. If there’s traffic or congestion, you might end up in a bottleneck, paying an arm and a leg for gas and getting nowhere.

Now imagine if every transaction you make is ‘carpooled’ with several others. Congestion is reduced. Everybody gets to where they are going, quickly and without the extra costs. That’s what the OMG Network can do for you.

Is the OMG Network secure?

Yes. The OMG Network V1 Mainnet Beta is as secure as its underlying infrastructure, which includes: Ethereum and a decentralized network of watchers. Every transaction is validated by both mechanisms and structured in a way so that no malicious actors are able to steal funds. This system has been audited by both Quantstamp and ConsenSys.

The OMG Network is also trustless. Trustless means that even if, for some unforeseen reason, the OMG Network becomes inaccessible or fails, users can recover their funds. This is because your tokens are deposited on Ethereum and never leave it. If users ever want their funds back, they simply withdraw them by communicating directly with the root chain.

“Ever since we embarked on the journey to deploy the production-ready OMG Network, security has taken top priority. Whenever there was a question between the launch and safety of user funds, we've picked the latter. We believe we've stuck a responsible balance between shipping the product and keeping the system secure.” - Kasima Tharnpipitchai, OMG Network CTO

Can anyone use the OMG Network?

Yes. We enable financial access for everybody through our permissionless infrastructure. Permissionless means the OMG Network is open to any consumer, developer, or business to use or build products on top of the Network and send transactions.

Up Next

Stay tuned for part two, where we address the white paper and more.

The OMG Network Team


Disclaimer: Please remember the OMG Network is in beta and may be subject to bugs or errors. The OMG Network team is committed to ensuring that these issues are resolved quickly. But we ask you to exercise caution and transact real value on the network at your own risk.

Sign up for our newsletter and we'll let you know about everything important at OMG Network.