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Omnidex 1.0 Takes Bitcoin Blockchain Principles as a Decentralized Crypto Exchange

Last Updated March 4, 2021 4:47 PM
Samburaj Das
Last Updated March 4, 2021 4:47 PM

The Omni Foundation, developers behind the Omni Layer , the largest asset layer built on top of and secured by the Bitcoin blockchain have released OmniDex 1.0. The developers proclaim it as the “first true decentralized” cryptocurrency exchange. OmniDex also allows for the trustless exchange of assets between five of the top 25 crypto assets, with no counterparty risk.

With no human component and complete automation, OmniDex 1.0 sees the launch of a completely trustless cryptocurrency exchange, in contrast to centralized exchanges such as the now-defunct MtGox as well as leading exchanges like Coinbase and BitStamp.omni

The exchange enables the cryptographically-secure buying and selling of several digital tokens that are currently built on the Omni platform. The Omni platform is a software layer built on top of the most popular, most audited and most secure blockchain of them all, that Bitcoin blockchain.

Speaking to CCN.com, Omni board member Patrick Dugan explained what makes OmniDex the first ‘true’ decentralized exchange and how it differs from other existing decentralized exchanges. He stated:

Other decentralized exchange protocols are based on putting up collateral well in excess of trade value. Omni’s decentralised exchange is based on pure software-escrow logic, it’s as difficult to tamper with as the Bitcoin blockchain.

The release of OmniDex 1.0 also sees six of the top 40 tokens (listed on CoinMarketCap), including:

  • Maidsafe
  • Agoras Tokens
  • Synereo
  • Tether, and
  • Omni

Future versions of the OmniDex exchange will seek to include bitcoin and other leading tokens that aren’t built on the Omni protocol.

Talking about Bitcoin’s integration, Dugan added:

The first phase of the Dex, launched in 2014, allows for one-directional trading of BTC for OMNI, that feature is supported by our web wallet Omniwallet, which salts your privkey to a password but does not store it. When v11 comes out we’re going to prototype future contracts that will enable pegging of OMNI to BTC and the subsequent issuance of synthetic BTC as a smart property.

Due to limitations in the Bitcoin protocol itself, it’s very difficult to *push* BTC in a systematic way without using compromises like oracles or custodians, OMNI and other smart property on the Omnilayer are automatically pushed when a trade clears. We designed the Omni Layer protocol like this to get around that limitation in Bitcoin.

Release and Fees

Choosing the occasion of Bitcoin’s 400,000th block, the Omni Foundation began operations of the exchange. Three Omnicore developers and two Omni Foundation board members signed off on the feature activation transaction. This action broadcasts to Bitcoin and sets a target block time for the Omni Layer protocol to begin parsing with new rules.

Stressing that they are committed to respecting the scalability of the Bitcoin blockchain, Omni’s core developers revealed that the activation features include the adoption of transactions that take up less data and cost less in miner fees.

The fees for trading any Omni-denominated pair(s) are 0%. Q2 2016 will see fees activated for the trading of any other combination pairs, at .05% for liquidity seekers, a payment that will occur automatically in the protocol.

The cryptographic logic is borrowed from that employed in the Bitcoin blockchain, to see assets cleared between traders.

A press release added:

This activation is the first major step toward a mature Bitcoin blockchain and a world where financial custody risk is phased out. This thoroughly eliminates the problems that occurred with crypto exchange failures such as MtGox and Cryptsy, not to mention traditional bank failures.

Update: Factom, although initially thought would be developed on Omni, have created its own chain and is not included in the list of tokens built on the platform.

Images from Shutterstock and Omni.