Omega One The Smarter Way to Trade Cryptocurrencies Review And OMT Token Analysis
Members’ funds remain under their control in decentralized smart contracts on the blockchain. Our system aggregates liquidity across multiple exchanges, and further improves liquidity with trade execution logic. Our smart execution and order routing can radically reduce liquidity costs. Non-custodial smart contract wallet system means members are not exposed to exchange counterparty risk.
About Omega One
A secure, efficient, decentralized and digitally native global financial system is being born on the blockchain. It will restructure global power dynamics and fundamentally impact tomorrow’s world. Our mission is to facilitate the birth of this new financial system and to shape it for the common good.
By solving the problem of creating scarcity in a purely digital space without the need for centralized power to create trust and security, the blockchain has enabled a decentralized market of value which will automate most functions of the financial industry in more transparent, efficient and secure ways. Omega One is building out the investment architecture of these natively digital asset markets, improving their viability as a foundation for the new financial system and helping to shape that emerging system toward better societal outcomes.
The Omega One ICO is funding a mission to enter the cryptocurrency trading space. The team points to the myriad of issues associated with crypto exchanges – low liquidity, high trading costs, lack of transparency, hacking – as barriers on the road to crypto’s growth as an asset. Omega One correctly contends these factors lead to high volatility, barring entry of large volume traders to crypto and, consequently, inhibiting the maturity of the market. Exchanges with access to high liquidity are centralized and hold investor funds in collected accounts, posing a significant security risk for traders. Conversely, many investors have turned to OTC brokers, and more recently, on-chain and peer-to-peer solutions- but OTC brokers have high costs and on-chain trading greatly limits liquidity. The team refers to this issue as the “liquidity vs. security tradeoff”, and claim Omega One is the solution.
Omega One is designed to address the “liquidity vs. security tradeoff” by way of a decentralized, automated trading intelligence platform bridging exchanges and the blockchain. Omega One’s “have your cake and eat it too” approach combines the speed of off-chain trades with the security of non-custodial settlement all in one platform. Central to the platform is balance sheet intermediation, which the team claims will provide members access to higher liquidity than trading directly on the market. For large transactions, an algorithmic trading mechanism breaks up orders and allocates them across exchanges to reduce fees. The Omega One ICO will initially support ERC20 tokens, with plans to integrate others at a later stage. By solving liquidity and trust problems, Omega One aim to take the development of cryptocurrency finance to the next level.
Comprehensiveness: The document begins with an introduction to the team and a brief overview of the problem statement. The organization’s plans to address liquidity is discussed, along some details regarding the crypto economics of the platform (fees, inflation mechanism, etc). Written technical content is lacking and technical details are are mostly expressed via a series of figures. Business-related aspects of the platform are discussed broadly. The team is presented in the whitepaper and the company website. The company GitHub page is not presented. Legal content is available but lacking.
Readability: The document is simple to read and does not seem deliberately obfuscated with the exception of the figures outlining the technical infrastructure of the platform.
Transparency: There is a lack of discussion regarding the technical components of the platform. The current stage of development is not adequately discussed. A thorough comparison with potential competitors is not included. LinkedIn profiles for advisors are not included in the whitepaper or the company website.
Presentation of Business Plan and Token Model: The reserve fund will be managed by the organization and will be used to control the velocity of the sale of Omega One tokens. Details regarding the business development plans for the project are essentially absent. Details regarding the token economics are discussed, but some aspects lack specific detail (fee structure, use of reserve fund, etc).
Presentation of Platform Technology and Use of Blockchain: The majority of the technical aspects of the platform are presented via a series of detailed figures. However, the figures are not accompanied by a thorough discussion which informs the reader as to what the figure is attempting to convey. Various aspects/features of the platform are listed but the interactions of the different components is not discussed thoroughly. The Omega One wallet is linked to several blockchains so that users are able to trade using multiple cryptocurrencies. The wallet will allow users to “control and custody of their funds via their private key; however, the wallet has a built-in interface to the remainder of the Omega ecosystem allowing locking of assets, and secure automated settlements”. Specific technical details are essentially absent.
Legal Review and Risk Assessment: There is a brief legal section towards the end of the whitepaper that spans approximately a half-page.
Project Timing and Competition
There is undoubtedly a growing trend of mainstream investor attention to crypto, and Omega One is catering to that trend. On a broader scale too, the popularity of decentralized exchanges in the crypto world is on the rise. Mounting institutional interest in crypto and the rise of decentralized exchanges are strong indicators that the market is ripe for Omega One. Still, the team’s pandering to institutional investors rests on two assumptions: 1. Traders want a low volatility market where large transactions have a little impact and 2. High-volume investors will be enticed to move away from OTC brokers. Should these assumptions prove incorrect, the project will lose some competitive advantage against other decentralized exchanges and trading protocols like 0x protocol. That comparative advantage may well prove crucial for Omega One. 0x protocol purportedly offers a comparable solution to the “liquidity vs. security tradeoff”, whereby trading happens off the blockchain but transactions are settled on the blockchain with smart contracts. Both Omega One and 0x will also utilize shared liquidity pools to further address the issue of low liquidity. While the infrastructure of Omega One offers more advantages like priority execution to high-volume traders, the question remains whether such features will be enough to bring investors racing over the bridge from Wall Street to cryptospace.
Omega One ICO Progress
Considering the attention other decentralized exchanges have been garnering lately, there is a deficit in the lack out online chatter and organic community growth around Omega One outside of Telegram, which has around 600 followers. On the marketing front, the team has done little to support the project in the media. The project’s Twitter and Facebook are both quiet, with only a few thousand followers each. A more concerted effort in getting the project onto people’s radar is needed, especially considering the competition factor.
On November 13th, the team announced the Omega One ICO would be delayed until the platform is available to users in Q2 2018. They provided several reasons for this decision. Referencing the shifting regulatory environment around ICOs, the team proposed conducting the ICO only after the utility of the tokens is accessible on the trading platform itself, mitigating risk for investors. They also disclosed that support from private investors has already covered product development and launch costs, so the ICO funds will be put exclusively toward the balance sheet and membership incentives. Additionally, the team cited the immense feedback from the community on the token and ICO process as a cause to reassess the token sale parameters. While the team’s expertise in monetary policy and currency management offers some assurance, the revised price, supply, distribution and dates have yet to be announced.
Omega One ICO Token Utility
The Omega One platform operates via its own Omega Token (OMT), an ERC20 asset. The utility of OMT is similar to Binance Coin or Kucoin, but provides additional incentives for use. A minimum balance is required for membership on the platform and using OMT for transactions reduces trading fees. Further incentives to purchase the token include trade execution priority and lower liquidity costs for larger holders; functions that are designed to attract institutional investors. While there are more incentives to acquiring and using the coin compared to other exchange-based tokens, its use is limited to the platform. Omega One’s wager is that by parting from the traditional investment bank model of maximizing profits through high transaction fee levels, they will instead keep fees low while covering costs, which in turn will drive up demand for the service via the token, ensuring higher value and use.
Differentiation: Omega One acts as its own exchange for users wishing to execute a trade. If the corresponding buyer or seller is not found, the platform will make the trade on the user’s behalf across a multitude of existing exchanges.Liquidity will be distributed evenly based on the following 3 conditions:
– larger orders get filled first
– older orders get filled first
– token whales get filled first
Readiness: The current stage of development is unclear. The company does not adequately discuss their progress in the whitepaper and the company GitHub page is not provided.
Concreteness of Development Plans: The roadmap is presented in the whitepaper as follows:
Current State (June 2017)
– The trading engine is in the process of integration with several exchanges.
– Omega token and launch contract are under development.
– The Omega wallet and multi-chain integration are in design phase and will be moving into development in July
Release 1.0 (~Q4 2017)
– Non-custodial smart contract wallets
– 2-5 exchanges
– BTC, ETH and the most popular ERC20 tokens
– First version of execution logic
Release 1.1-1.x (~Q4 2018)
– Integration more exchanges
– More currencies and tokens
– Analytics services
– Fiat currencies (custodial)
– Improved logic
Release 2.0 (~Q4 2019)
– End to end trustless liquidity available
– Self-improving/decentralized logic engine
– Continued expansion across liquidity sources and assets
Overall milestones are outlined. Milestones are mostly self-explanatory but some can be provided with more detail. For example, what the organization means by “improved logic” is uncertain.
Current Position within Roadmap: It is unclear if the organization has been able to reach the milestones set out on the roadmap due to the lack of public information with regards to the company’s current stage of development. Some of the milestones outlined in the roadmap are fairly vague. For example, the details of the “analytics services” and “improved logic” milestones are not clear.
Feasiblity: At the time of review (July 2018), there is no indication that the organization has made significant technical progress. As such, based on the fact that the team has planned to have notable developments (Non-custodial smart contract wallets, exchange integration, launch contract, etc) and that the status of these developments are unknown, it seems unlikely that the organization will reach future milestones before the deadlines set out in the roadmap.
Blockchain Innovation: The platform does not provide innovation from a blockchain technology perspective but provides smart contract functionality that can potentially benefit the blockchain ecosystem overall.
Omega One ICO Founding Team
Omega One has promised to deliver a product that, on paper, reads like a blueprint for the perfect trading platform. Delivering this product requires a stellar set of individuals with a track record of accomplishments that lend credibility to the project. Many of the team’s key players can be traced back to Bridgewater Associates, one of the largest hedge funds in the world. Chief tech officer, Alex Gordan-Brander, is credited with designing and patenting a multi-billion dollar traditional currency-trading platform that breaks up large orders and distributes them across exchanges- the same mechanism Omega One will employ. Chief Strategy Officer, Mark David Bakacs is a serial entrepreneur and founder of Ideapod, while Chief Trading Officer, Jonathan West, manages one of the largest private crypto funds in the world. A noticeable caveat is the relative inexperience of project’s CEO, Alan Keegan, with only two years in the financial sector to fall back on. That being said, any doubts about his capabilities must be weighed against the breadth of expertise the team as a whole brings to the table.
Omega One is partnered with ConsenSys, a leading blockchain technology company. The partnership gives the team access to leading tech and expertise experience. The company appears to be playing an active role in recruiting talent for the Omega One project.
Beyond the development team, the project has a notable backer and primary investor- John Mack, former CEO of Morgan Stanley. A high-caliber Wall Street insider could go a long way toward more institutional confidence in crypto. Mack has been useful for attracting attention to the project, serving as a symbolic intermediary between the financial establishment and the cryptocurrency frontier.
Target User Base: The target user base for the platform are primarily those that are interested in trading or investing in cryptocurrencies.
Market Penetration Potential: The potential for market penetration is uncertain. There seems to be a lack of legal content provided in the whitepaper and company website when considering the nature of the project. Regulatory obstacles will be considerable for this project, but the pertaining challenges are not adequately addressed.
Direct Competition: There are various platforms that aim to allow users to trade cryptocurrency while striving to provide increased transparency, security, and liquidity. Potential competitors include:
– GMC Cryptocurrencies
– Singularity X
Solution Advantage: Notable advantages of the platform are not evident. There are various similar projects that aim to provide users liquidity by trading across a number a cryptocurrency exchanges.
Blockchain Disruption: The organization claims that by using the Omega One platform, users can save up to 80% to 90% in transaction costs when compared to trading directly on markets. The use of blockchain technology with the project is primarily for the development of tokens in order to generate funds as well as to automate transactions for users across various exchanges. The potential for disruption is moderate, as it could assist with bringing maturity to the blockchain ecosystem.
Long-Term Vision: The vision of the company is outlined towards the beginning of the whitepaper. It is stated that the organization believes that it is “laying the foundation for their maturation as an asset class and building the financial system of the future”. The organization aims to provide benchmarking and analytics of transaction costs in order to assess the impact of the trade, which gives financial institutions a better ability to fulfill their fiduciary duties and provide “best execution”, which the organization believes will allow cryptocurrency markets to increase in maturity. The project has a fairly limited scope when compared to other projects.