CoinMarketCap takes a deep dive into a decentralized protocol that aims to converge Forex and decentralized finance through a cross-chain DEX supporting stablecoins and crypto assets.
Fiat currencies have long been an excellent way to transfer value, but in the face of the digital revolution, they are starting to seem somewhat outdated. After all, they are difficult and expensive to transfer across borders, can’t easily interface with blockchain-based protocols, and aren’t the most transparent when it comes to their supply.
On the flip side, the digital assets with stable prices (stablecoins) address all of these challenges, but aren’t easily accessible to fiat holders.
Onomy Protocol is designed to bridge this gap between the fiat and stablecoin worlds with an ecosystem of blockchain-based products, including a stablecoin issuance protocol, native blockchain network, decentralized exchange, inter-chain bridge, and wallet solution.
Join us in showcasing the cryptocurrency revolution, one newsletter at a time. Subscribe now to get daily news and market updates right to your inbox, along with our millions of other subscribers (that’s right, millions love us!) — what are you waiting for?
What Is Onomy Protocol (NOM)?
Onomy Protocol is building a multi-chain decentralized exchange (DEX) that is designed to provide an interface between traditional finance and the blossoming world of decentralized finance (DeFi).
The platform aims to break the strong dependence forming around Ethereum’s DeFi ecosystem by allowing users of practically every major smart contract-capable chain to access the same suite of products.
With this, Onomy is set to provide a truly integrative on-ramp to DeFi across all blockchains, helping to eschew today’s siloed approach to ensure that both individual users and businesses can maximize the liquidity of their assets without worrying about individual chains.
By building a Forex/CeFi to DeFi bridge, Onomy hopes to unlock the $6.6 trillion per day Forex trading industry — helping to massively boost liquidity in DeFi markets while providing a simplified entry route for those looking to gain exposure to digital assets without the volatility. In line with this, Onomy is developing a custom bridge hub to allow users to seamlessly transfer their assets among supported chains.
What Is Onomy Protocol (NOM) Token?
The platform's native utility and governance token, NOM, has a variety of purposes within the Onomy landscape — being used as collateral to mint stablecoins, secure the network, and obtain revenue from the exchange fees. It is also used for governance purposes.
Who Created Onomy Protocol (NOM)?
Onomy was co-founded in December 2020 by Lalo Bazzi and Charles Dusek. Bazzi is a former associate at Fidelity Investments and ex-Microsoft cloud solution strategist with close to four years of experience operating in the blockchain space. Dusek, on the other hand, is an accomplished engineer with more than a decade of experience working in energy finance, private equity, machine learning, and consensus systems. Together, they developed mining hardware, utilizing ASIC chips, and established a global infrastructure partner network.
The two founders are joined by a 20+ strong team that also includes known developers, designers, researchers, and marketing specialists.
How Does Onomy Protocol Work?
Onomy Protocol’s application-specific blockchain is based on Cosmos, which is widely considered to be one of the most advanced blockchain platforms in current operation — with 100x the efficiency of Ethereum, massive throughput capabilities, and a functioning inter-blockchain communication protocol (known as the IBC).
What Are Denominations (Denoms) In Onomy Protocol?
The platform provides easy-to-use rails to move fiat into the cryptosphere through crypto-collateralized stablecoins known as Denominations (or Denoms). These are issued by the Onomy Reserve (ORES) and can be used for trading, lending, and payments, whilst being freely movable within and outside of the Onomy ecosystem, hence unlocking novel opportunities unavailable in the world of traditional finance.
Denoms can be tied to the value of any major fiat currency, e.g. the euro (EUR), US dollar (USD), pound sterling (GBP), Japanese yen (YEN), and more, expanding the stablecoin economy beyond the well-known USD variants. To the best of our knowledge, this is the first time NOM, a single collateral asset, can be used to directly mint stablecoins pegged to a growing number of fiat currencies.
To ensure Denoms maintain a stable value, Onomy employs a variety of control mechanisms, like maintaining minimum collateralization ratios and using a reserve rate to inflate/deflate the currency to achieve parity with the associated fiat currency.
These Denoms can be traded on the Onomy exchange (ONEX) along with other crypto assets and the platform’s utility token — NOM. They can also be moved across chains via the Onomy bridge which will integrate several prominent blockchain networks, like Cosmos, Ethereum, Avalanche, Cardano, and others.
To help deliver the optimal user experience, Onomy has developed a novel technology known as 'Natural Rights'. This uses proxy re-encryption to simplify private key management through authorized devices and enable single sign-on with QR when managing multiple private keys. With Natural Rights, users retain full control over their assets, but no longer need to maintain wallets for each individual chain — dramatically improving the user experience.
The Onomy Reserve (ORES) and Onomy Exchange (ONEX) are powered by the Onomy Network (ONET), which is used for processing transactions — thus, value transfers are conducted quickly, securely, and perhaps most importantly, irreversibly. While the ONET is built with Tendermint, Onomy will later introduce Equity, a byzantine fault-tolerant consensus protocol that fairly orders all transactions based on network traversal, deterring frontrunning whilst enabling the network to support high-frequency trading. The ONET is secured by a network of validators, each of which is required to bond a fixed minimum amount of NOM either directly or through delegation in order to participate in network consensus. Validators and NOM stakers are incentivized in the form of inflation rewards.
Onomy’s Roadmap
As of August 2021, Onomy is in the early stages of its development roadmap. The current roadmap (as outlined in the Onomy litepaper), indicates the first versions of the following initial products will be launched by the end of Q4 2021:
- Onomy Network Mainnet
- Onomy Bonding Curve Platform
- Onomy Exchange
- Onomy Wallet
- Onomy Bridge Hub
Onomy is also scheduled to conduct a public sale for the NOM token through a unique Bonding Curve Offering (BCO) via an audited smart contract deployed on the Ethereum chain. Unlike traditional token sale models, BCOs operate as Automated Market Maker (AMM) contracts that automate the relationship between token pricing and supply, bringing forth deterministic pricing, instant liquidity, and incentives to connect purchased tokens to Onomy’s mainnet at a 1:1 ratio. The date for this hasn’t yet been revealed.
What Makes Onomy Protocol Unique?
Onomy is based on the aim to see all of the world’s currency being represented on-chain. As seen with USD stablecoins growing by over $100B between August 2020 and August 2021, this migration from traditional finance to decentralized finance is not only inevitable but imminent. This presents an opportunity to expand beyond the USD and represent traditional Forex exchanges on-chain. Additionally, interoperability between prominent blockchain economies is arguably one of the prerequisites to unlocking worldwide financial inclusion and opening the world’s liquidity for the new paradigm of finance.
To achieve this goal, Onomy incorporates several unique features designed to enhance the DeFi experience, bootstrap liquidity, and incentivize participants. Some of Onomy’s key distinguishing factors include:
Stable Denominations
Onomy introduces a new type of stablecoin, known as Denoms. These take on all of the best parts of fiat currencies (i.e. stable, well-recognized value and utility) and combine them with the features of digital currencies (i.e. they are cryptographically secure, counterfeit-proof, and borderless).
In short, they provide a more efficient way to trade various stable denominations of value, while opening up new lines of utility via the blossoming field of DeFi.
Chain Agnostic
Onomy leverages a variety of novel technologies to provide a consistent experience to users — no matter their blockchain of choice. This ensures users can mint Denoms on Onomy’s native chain, while trading and funneling in liquidity from multiple blockchains to provide an ideal experience for ONEX users.
Hybrid DEX
Further developing on the Onomy Exchange, the DEX utilizes a hybrid model that employs both order book and AMM functionalities. This unlocks additional functions, once reserved only to traditional centralized exchanges, of which we include stop-loss orders, limit orders, and advanced charting. Onomy’s Exchange will support trading of Denom stablecoins, the NOM token, and other cryptocurrencies cross-chain.
Single Sign-on
Managing private keys and using DApps across multiple blockchains can be a pain, as users typically need to operate multiple wallets and carefully manage how and when they sign into different applications. Onomy eliminates this friction point through its non-custodial single sign-on private key management solution, known as Natural Rights. This allows QR logins to addresses based on multiple blockchains.
Staking
The integrity of Onomy’s Cosmos-based proof-of-stake (PoS) blockchain is maintained by a decentralized network of validators. They are incentivized to act honestly through a NOM-based reward system and may be penalized for failing to fulfill their obligations. Individual users are able to contribute to the validation process by delegating their NOM to their validator of choice, unlocking an incentive. Additional staking mechanisms will also be implemented for both Denoms and the NOM token.
DAO Governance
Onomy Protocol will be governed as a decentralized autonomous organization (DAO) by holders of NOM, who may weigh in their opinion and contribute to key decisions surrounding the development and evolution of the Onomy ecosystem by initiating and voting on governance proposals.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.
