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Consensys Introduces Omega One

Despite massive growth in crypto markets, exchanges remain illiquid, fragmented, costly to trade on, and open to theft by hacking.

Consensys’ latest Blockchain product Omega One claims to solve these problems by providing a decentralized automated execution system that trades across the world’s crypto exchanges, shielding our members from counterparty risk and reducing the costs of trading.

By radically increasing the liquidity of crypto markets, they say they are laying the foundation for their maturation as an asset class, and building the financial system of the future.

From a recent blog post at Consensys:

Why liquidity is important

When a market is liquid, it is cheap to move in and out of positions, so large volumes can be traded without moving the price very much. This is not only good for traders, but good for the market as a whole, as it tends to dampen booms and busts, and encourage market maturity. However, with liquidity costs orders of magnitude higher than in traditional markets ($1m moves the market 10% in BTC/ETH, vs. 0.01% in USD/EUR), the crypto markets will need to mature extremely quickly or risk breaking under the weight of incoming capital.

How Omega One solves the problem

Fortunately, this problem can be solved, and has been solved before in traditional markets, through the intermediation of agency brokers. These entities enable clients to access liquidity more efficiently by breaking down large orders into small pieces, placing them on multiple exchanges over time, and implementing complex game theory to minimize liquidity costs.

Omega One will play this role in crypto markets, with the addition of a trust intermediation layer that protects our clients from exchange risk. The trading engine will be integrated with Ethereum and other Blockchains, allowing funds to be traded trustlessly. When an Omega One member wishes to trade between, say, two Ethereum standard (“ERC20”) tokens on the Ethereum Blockchain, they will lock some of token A in our smart contract and send us an order to trade to token B, within certain constraints of time and price. Omega One will then take on a token B position in the market using our own exchange accounts and funds, then trade directly with the member as an atomic (simultaneous) swap of tokens in the smart contract. This will combine the trading benefit of harvesting liquidity using Omega One’s algorithms with the trust benefit of leaving our member’s funds on the Blockchain, protecting them from the counterparty risk of the exchanges.

The Omega Token

The Omega One trading protocol is mediated through a crypto token, the Omega Token. Members will use tokens to pay fees, get fee discounts, and trade on preferred terms in our private dark pool. Fees will be reinvested into increasing liquidity access, upgrading trading intelligence, and increasing decentralization. Omega One will be a utility for the crypto markets, making trading cheaper, increasing overall liquidity and enabling further market evolution.

The Omega Token will launch later in 2017.

Richard Kastelein
In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, 'The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, the Netherlands where he has set down his anchor to raise a family and write. Founder and publisher of industry publication Blockchain News (EST 2015) and director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He has written over 2500 articles on Blockchain technology and startups at Blockchain News and has also published in Harvard Business Review, Venturebeat, Wired, The Guardian and a number of other publications. Kastelein has an Honorary Ph.D. and is Chair Professor of Blockchain at China's first blockchain University in Nanchang at the Jiangxi Ahead Institute software and Technology. He has over a half a decade experience judging and rewarding some 1000+ innovation projects as an EU expert for the European Commission's SME Instrument programme as a startup assessor and as a startup judge for the UK government's Innovate UK division. Kastelein has spoken (keynotes & panels) on Blockchain technology at over 50 events in 30+ cities.
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