Austin Werner Blog
Onomy Protocol is a layer-1 blockchain built on Cosmos that aims to provide a comprehensive cross-chain infrastructure for global finance. It offers a hybrid AMM with order book functionality, a cross-chain wallet, and a bridge hub.
Onomy is a sovereign layer-1 blockchain built on Cosmos whose suite of products aims to act as a comprehensive cross-chain infrastructure to allow global finance to migrate on-chain and provide a portal for retail users to access DeFi, crypto assets, and Web3 environments.
Onomy’s ecosystem consists of a Hybrid AMM with order book functionality (Onomy Exchange), a cross-chain wallet (Onomy Access) with native non-custodial storage of assets, and the Onomy Arc Bridge hub ‘built underneath.’ Together, they are intended to make trading on-chain fluid and fast to provide access to DeFi for retail users and institutions alike.
Onomy’s particular focus is on the foreign exchange market (forex), and it aims to provide market makers, individuals, and institutions with the tools to trade forex on-chain and create global access to DeFi and new decentralised banking economies.
The Onomy Network is built using the Cosmos SDK, which enables it to achieve scalability by leveraging the infrastructure supported by its network of institutional validators.
The protocol leverages Cosmos’s multi-chain network to create diverse liquidity and native asset availability. Onomy’s Arc Bridge Hub contains custom, bi-directional bridges to partner blockchains such as Ethereum and multiple EVMs. Onomy Access and the Onomy Exchange use these bridges so Onomy’s customers can trade assets cross-chain natively directly from the wallet or the DEX.
Onomy’s DAO features votes for token holders and proposals that are programmatically executed by on-chain votes. No central team or entity has the keys to the on-chain treasury. NOM holders can decide how funds are used.
According to the Onomy Improvement Proposals (OIPs), users can access Onomy Exchange directly from the Onomy Access Wallet and execute a swap. If that swap relies on cross-chain transfer, then Onomy Arc Bridge Hub handles the bridging of the asset in the background. All staking and governance for different assets users hold can be done directly in the wallet without needing multiple browser extensions to manage a portfolio.
The Onomy Exchange is built to act as a free, open, central DeFi hub that doesn’t demand token lockups for participation and actively adds new assets from different chains.
Onomy hopes to give users all their crypto assets, no matter the chain, in one place without having to use a centralised exchange or multiple bridges.
Onomy offers a single login with its non-custodial private key management solution, Natural Rights, which allows QR login on multiple blockchains, alleviating the pain of managing multiple private keys and separate wallets for each crypto platform. By logging into Onomy Access, users can manage DeFi portfolios on-chain.
Onomy DEX adopts a hybrid structure, implementing the order book method and AMM. AMMs are a pain point for retail crypto users, and the Onomy Exchange is built to look and feel like a CEX.
By bonding tokens with validators, delegators are able to earn rewards for securing the network. Staking rewards are programmatically adjusted depending on the staking ratio and inflation rate, which are pre-determined and can only be changed by the DAO vote.
Onomy’s long-term goal is to use its web infrastructure to build on a stablecoin framework called Denoms. These will be used to power up forex on-chain at vastly greater speed and, crucially, efficiency than is currently possible.
NOM is used for transaction fees, bridge fees, and rewards for helping to secure the network via PoS staking, governance, and collateral, and it has various tie-ins within Onomy products.
The coin is a centrepiece of Onomy’s infrastructure and is used to cover transaction fees on the Onomy Network. In addition, as Onomy’s L1 leverages Proof-of-Stake consensus, NOM is bonded by validators to secure the network. Staking rewards are programmatically adjusted depending on the staking ratio and inflation rate.
NOM also confers governance rights to holders who can vote on proposals about the direction of the protocol in the Onomy DAO. Possible proposals include the deployment of new features, funding community initiatives, marketing and developer teams, changing the blockchain and/or product parameters, and more.
NOM is further integrated into products, such as the Onomy Exchange, through a programmatic buy and burn. The Onomy Exchange does not charge static fees to users who trade – instead, the AMM still collects fees by capturing the spread between the bid and the ask, as a normal market maker does. These earnings are then shared with LPs and used to programmatically buy and burn NOM and deflate the overall supply over time without any central management whatsoever.
The Onomy Protocol has a total supply of 100M NOM. Backer, team, and advisor tokens are vested for 24–36 months linearly each month, with a 12-month cliff. DAO treasury tokens are only usable following successful DAO governance votes, with the system programmatically funding proposals when approved, with no central key management by any Onomy contributor. The NOM supply will increase from inflationary rewards and bridges from the bonding curve.
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