With all the current headlines in the industry about failing exchanges, more and more users are taking self-custody of their funds. The market is crying out for a DEX which feels to retail users exactly like a CEX, but which takes advantage of all of cryptocurrency’s innate decentralised potential. Having an orderbook on a DEX that transacts with lightning throughput cross-chain, alongside a non-custodial wallet that does not force you to rely on multiple browsers and wallet extensions are an essential piece of the jigsaw for crypto’s mainstream adoption.
Onomy Protocol is a layer-1 blockchain built using the Cosmos SDK that offers a suite of products that create a fintech shell for DeFi. Onomy’s goal is to make decentralised finance as user-friendly in terms of UX, integration, and function as a traditional banking or exchange app, while still maintaining total decentralisation, AMMs and liquidity pools, and user-custodied funds.
To do this, it has built a Hybrid DEX that mirrors all the functions of a classic CEX, and a multi-chain wallet that can store all their assets non-custodially and still allow them to participate in staking and governance in multiple protocols in one easy place. These, combined with Onomy’s cross-chain functionality, make it a one-stop shop for any user’s DeFi needs, while serving as a potential onramp for institutions to get into DeFi. In future, Onomy will serve as a trading ground for the world’s Forex market on-chain.
Onomy is built principally using the Cosmos SDK. It’s a sovereign, layer-1 blockchain with its own validator set, of which Citadel One is part. It connects to other blockchains in the Cosmos ecosystem through IBC, and leverages this connection to let users send their assets to different Cosmos chains and import and export Cosmos-based assets through the Interchain. This ensures total interoperability with every part of the Cosmos ecosystem.
Onomy has also built multiple bi-directional bridges to partner blockchains to ensure that loyal liquidity can still interact with Onomy’s Hybrid DEX. Onomy has also created instances of the Onomy Exchange on partner blockchains, meaning that users can still take advantage of the technology without having to bridge their assets to the Onomy Network - although they can at any point. Partner chains include Avalanche, Aurora, Polygon, IOTA, and more, with the Onomy Arc Bridge already compatible with Ethereum and undergoing final IBC testing as it continues to expand the interchain.
The cross-chain functionality is used to ensure the Onomy Exchange can support liquidity pools for just about every asset imaginable. The exchange itself is nothing like a standard DEX, with dramatic changes to ensure Onomy’s ‘fintech shell’ is achieved and to offer traders and liquidity providers a brand new DeFi opportunity.
For traders, the Onomy Exchange feels just like a CEX, with market orders, limit buys, stop losses, and much more besides, but of course, without the need to sign up for an account. It runs an orderbook, and prices are determined by matching the bids and the asks, just like a standard market maker running an orderbook would. However, it’s totally decentralised, and underneath is a liquidity pool/AMM infrastructure. Traders pay no static fees, just miniscule gas (in $NOM) to execute trades.
However, the AMM does capture the spread between the bid and the asks, pocketing the difference akin to a market maker. Unlike a market maker, those profits are used to reward liquidity providers to the exchange’s pools, and to programmatically buy back and burn $NOM. The pleasure of using a DEX with CEX features will be stark, and traders will certainly love it.
Traders and users can store all the assets they pick up on the exchange in the Onomy Access wallet. The wallet is designed to feel like a classic app, with biometric log-in, qr codes for transactions, and more. Under the hood, the wallet is capable of storing all assets from Cosmos, as well as assets from all partner chains and from Ethereum. The wallet also allows users to participate in staking and governance directly from the wallet itself, with additional functions to be deployed by builders interested in deploying on Onomy, after successful DAO votes.
Onomy has its own native governance token, as befits its status as a layer-1 sovereign blockchain. $NOM confers governance rights over the use of the on-chain treasury and has multiple utilities.
- Governance: $NOM holders will create and vote on proposals in the Onomy DAO
- Bridge Fees: Onomy is connected to multiple other blockchains through custom bridges to allow assets freedom of movement. $NOM pays bridge fees for those assets.
- Staking: $NOM can be staked for advanced rewards in the early epochs of the chain’s life, with those rewards tapering off to a sustainable APY.
- Collateral: To power its stablecoins, $NOM will be used as collateral to open up Forex trading on-chain.
- Buy-and-Burn: $NOM is bought and burned with the profits of the $AMM to keep value within the ecosystem and apply deflationary economics
100 million $NOM makes up the genesis supply. Further supply is added though the public BCO, which we’ll cover shortly. Of the genesis supply:
- 45% is on-chain in a treasury managed by the Onomy DAO
- 20% is ecosystem funding for market makers, validators, exchanges and incentives for $NOM holders
- 20% is to early backers and partners
- 15% for the team.
Onomy’s BCO is now live, and is how the public can buy $NOM. Through the BCO, they can exchange $ETH for $bNOM, an ERC-20 token. Those $bNOM tokens can be bridged to the Onomy mainnet where they are burned before real $NOM tokens are issued in their place, adding to the supply. The $BCO advances price up a strict, pre-determined curve depending on the amount issued by the contract, with the final price set at 1 $NOM = 1 $ETH.
Upon bridging, native NOM can be staked during the hyperinflationary period to help secure the network and generate additional rewards, with 11 leading validators currently securing the network.
Onomy has recently announced a $10M raise from Bitfinex, Avalanche Foundation, CMS Holdings, Galileo, GSR, DWF Labs, Cosmostation, Citadel.One, Forbole, and others.
With the testnet complete, the mainnet launch live and $NOM now on the market, Onomy Protocol will launch additional products into the wider market. More details about $NOM, tokenomics and staking can be found on Onomy’s Medium.
For launch, Onomy is focused on letting users get to grips with their new fintech shell for DeFi, and taking advantage of their advanced UI and enjoy trading on the Hybrid DEX. Onomy’s long-term vision is bigger. The world’s largest daily market, the Forex market, has yet to fully utilise the efficiencies and openness of the blockchain when it comes to doing business. Adoption among the classic players in this space is still in its infancy.
As liquidity builds, Onomy wants its Hybrid DEX to serve as infrastructure for Forex trades through decentralised, crypto-collateralised stablecoins that represent various national currencies.
The recent drama about exchanges continues to rumble on. More and more users are, rightfully, taking self-custody of their funds. Yet doing so often means having to use DEXs that are cumbersome, bridges that are expensive, and wallets that are complicated. Onomy brings the CEX experience in a fully decentralised, non-custodial manner.
Onomy’s launch could thus come at a propitious time for the protocol, which recently announced a $10m round in the run up. Users want DeFi where technical complexities are abstracted away. Onomy vows to deliver.