Stablecoins are a trillion dollar opportunity. Not StableUSD, Stablecoins. There is more than one useful peg to attach onchain value to — even if the world’s global reserve currency and the primary unit of exchange in the world’s largest economy was always going to be the natural start.

Of the near-$200 billion dollars of stablecoins currently in the market (up 13% just in the last thirty days), less than 1% are denominated in currencies other than USD. That’s a staggering statistic considering the powerful product-market fit that non-USD stablecoins should seemingly have. The EU is a larger economic zone than the United States, yet EURC — the largest Euro stablecoin — currently has a somewhat measly $84 million supply, compared to market-leader USDT’s $140 billion.

The fact that the supply figure is given in dollars perhaps speaks to the problem. Crypto, far from dethroning USDs global primacy as might be intuitively expected, is actually reinforcing it. A whole generation of foreigners (in US terms) is now habituating the act of defining their portfolio worth in dollars.

This is especially true for populations who are using stablecoins as a safe refuge for their net worth when their own national economies are either newer, more volatile, or simply declining. They are saving their money in USD, remitting their money in USD and maybe even transacting in USD.

The Unspoken Threat of an Onchain USD World

It makes stablecoins a serious extramural threat to all these countries’ national agencies. For all the hullabaloo by the US government attempting to stamp out crypto usage this last decade (a fact that, as we all know, is currently changing and precipitating this latest bullrun), the advance of stablecoins may well utterly reassert US government strength, while demolishing that of local economies issuing different kinds of fiat. If everyone’s savings globally is pegged to the dollar, the Federal Reserve hasn’t so much been weakened by crypto as supercharged by it.

It’s no wonder countries like China, Japan, Bolivia et al’ are seeking to root out the use of fiat (i.e USD) denominated stablecoins altogether. The mooted BRICS-currency as an alternative (and potentially onchain) to the US dollar is just one attempt to break this and stranglehold and the status quo that’s existed since the end of WW2, but India’s recent proclamation that it’s not keen to aggressively forge ahead with such a currency at this point means such alternatives are currently on the backburner.

The Opportunity of Non-USD Stablecoins

Despite all this, non-USD stablecoins are a major opportunity. Local currencies for local markets are essential and as crypto payment rails by major providers continue rolling out in markets like Latin America, the need for appropriately denominated stablecoins for merchants is vital. This could be for regulatory reasons, institutional acceptance, or simply the desire for people on the ground to make purchases using the currency they’ve grown up their entire lives with. A local contractor who wanted Romanian Lei doesn’t want the hassle of USD, why would they? International stablecoins are the solution to that.

Then there is the FX-market, a hitherto untapped goliath that could well prove to be the catalyst for crypto not just being a $4 trillion dollar market cap asset, but a $40 trillion one. Blockchain’s hyper-fast instant settlement decentralized consensus mechanisms are the antidote to the custody and settlement risk that has plagued international money markets since time immemorial and led to creation of the banking industry we have today.

If businesses could invest internationally, settle invoices cross-border, and pay their workers with the speed and efficiency that a true blockchain substrate could provide, the global economy would start booming overnight. $7 trillion is exchanged daily on FX markets to help people swap the value they have for the value they need, and comprehensive multi-denominative stablecoin markets and the frictionless transfer they provide are the ultimate end-game solution to those age old problems.

The FX market is resistant to change, of course, the intermediaries who currently dominate like their positioning. Yet change is coming, and to many not a moment too soon. Particularly FX traders who can leverage those efficiency advantages to earn significant profits arbitraging value between different currencies while not suffering the overhead that the current FX markets are bogged down by.

Non-USD Stablecoins

All this considered, it is surprising that less than 1% of stablecoins are non-USD. Yet growth in the sector is all but guaranteed, and there are some significant players already. Euro is the second largest, with Tether Euro (EURt was abandoned, and replaced with MiCAR-compliant EURq) and the aforementioned EURC from Circle using reserve-backed models to mint their tokens.

For other currencies, there is XSGD tracking the Singaporean Dollar and BRZ which tracks the Brazilian Real, which are also fiat-collateralized. There are also crypto-collateralized stablecoins which, instead of using ‘real world’ reserves, use a basket of crypto currencies to achieve the same aim of keeping the peg (like the Onomy Reserve, and all stablecoins it’ll mint). Celo Euro (cEUR) uses this mechanism, as does BitCNY for the Chinese Yuan and outliers like sJPY on the Synthetix protocol which tracks Japanese Yen.

The transaction volumes for these stablecoins are all completely dwarfed, however, by their USD counterparts — and the largest ones like EURC and cREAL both offered by providers who already have a USD stablecoin as their main value reserve. A truly flexible stablecoin market in terms of denominations has not yet matured — and that represents a spectacular opportunity.

Onomy — Creating Stablecoins

Onomy Protocol’s goal is to create a truly flexible stablecoin market that can evolve with the demands of the international money markets, local economies, and FX traders who need appropriately denominated value. 1% of $1 trillion is still $10 billion and, if that ratio changes — and it will change — then the exponential growth is obvious. Onomy is creating a truly onchain marketplace for FX traders and individuals to transact in their desired local currency and giving institutions the chance to spin up new currency markets for cross-border activities through petitioning the Onomy DAO.

The first few steps will take time as the Onomy Reserve builds collateral through oUSD, oEUR and other major currencies, but the scalability as the system becomes more robust is infinite. Even if a desired currency is not on the market, nothing stops the addition of new currencies as the system evolves, underpinned by the Onomy Reserve’s basket of crypto assets. The model echoes other stablecoin foundries, but the difference is ORES focuses on minting new denominations with multiple collateral types, whilst creating a fully decentralized onchain marketplace for those coins to be traded, remitted, invested, and otherwise deployed in a new internet financial system that is inclusive, permissionless, and free.

The Year of Flexible Value

2025 is the year of the stablecoin. The stablecoin, not just stableUSD. Whereas competitors are hamstrung by reserve-backed models, USD-obsession, and the pain of trying to serve under-served markets and make a profit, Onomy is built from the ground up to be a flexible stablecoin foundry that can replace the current FX-market and give institutions and individuals alike the chance to denominate their holdings and transact their business cross-border in the currency that always makes the most sense and which unlocks the greatest opportunity.

It’s Stablecoins, not StableUSD — The Untapped Market of USD Alternates was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Imagine a world without banks. Fuck yes. I hear you — crypto-native — shout. Even normies have decades of righteous anger and resentment at the giga-financial institutions that, to some, effectively rule the world. They crashed the economy in 2008, and 1997, and 1970 — and, and. These charlatans have a lot to answer for, and yet they never seem to.

Don’t forget, never forget, that the crypto market as we know it was incepted through Bitcoin as a response to the bailout of the banking sector in 2008. A rebellion against state sponsored capitalism and a paean to cypherpunk libertarian ethics. Enough is enough. With peer-to-peer-financial systems, we could have our own inalienable money supply and store of value. We could crowdfund loans, housebuilding, and infrastructure investment. But wait, that’s what banks do already. Your retail deposits are the seed money for those capital allocations — you just don’t get any return. Wait, my bad. You get 2% yearly on what actually is 20% yearly. Don’t forget, the rise of the West in the last half-millenia from relative backwater global obscurity was not predicated on gunpowder, shipwright technology or more democratic and flexible government systems — but by banks.

The ability for a nation or society to draw efficiently from its populace by promising a return on colonial expeditions, the ability to facilitate trade not just between the next city but across entire continents — and beyond. Promissory notes, effective chains of custody between branches and mass aggregation of gold-backed wealth meant that suddenly hitherto pastoral medieval kingdoms could engage in vast infrastructure investments without the unstable crown needing to fund it from desperately inefficient tax regimes. The banks made the world we live in today, and so it’s no surprise they rule the world.

Ask an unbanked person living in a barter society unable to access capital of any kind without borrowing at extreme interest whether they want a world without banks, and they’d look at you with disdain like the patronizing elitist that you are. People want mass infrastructure investment crowdsourced from retail, people want cheap consumer credit, people want to access their money safely and cheaply without fear of it being stolen or disappearing. Countries with mature banking systems are the richest in the world for a reason.

The reason that crypto is so exciting for the investment class is precisely because it can replicate the incredible force-multiplier that effective banking systems are for societies while adding a host of associated benefits that not only rewire the political power of money, but also are simply more powerful. If Bitcoin has made a strong exemplar start for a peer-to-peer cash system, new crypto technology can create a peer-to-peer banking system. Onomy, for example, can facilitate worldwide remittance payments in a local currency at a fraction of the cost it would require to use a traditional Forex service.

And it can do it at scale. Whether it’s $1 or $1 million — an on-chain financial system doesn’t care. If a CEO can kickstart his building programme in Mali and get money into the hands of hundreds of local businesses nearly simultaneously — and be able to verify receipt of funds, all without having to rely on an immature banking system on their end and exorbitant fees on his, he will. Anyone would. When we’re talking billions of dollars, the basis points on fees really begin to add up. To expats and immigrants everywhere, the prospect of lending your friend a fiver back home is often preposterous. With Onomy’s Internet Financial System, it becomes second nature.

That’s just the tip of an enormous iceberg. Verifiable immutable peer-to-peer payments can be used to facilitate micro-loans across distinct regional communities. Suddenly, places with no banking apparatus have access to cheap credit. Even in mature economies like many in the West, ‘locally sourcing’ your credit but still within a completely private, trustless, semi-automated system, means the profits from that credit don’t go to bankers bonuses, but they go to other people in your township — without you or they ever knowing who each other are, and immutable safety underwritten by the ironclad blockchain. The potential for locally-sourcing savings and loans has the ability to create flourishing micro-economies where the value captured stays within the community itself. Even if that community is as big a country, with the potential for national infrastructure investments not having the profits creamed off by banking institutions lending governments and companies at inefficient rates — acting as a by-now unnecessary middleman to the whole exercise.

It’s here the cypherpunk ethos can mature into something more graceful. Banks are just accountants — the blockchain is all the accounting you ever need. They are just custodians. Through crypto, we are all the custodians, governed by immutable and verifiable code. We don’t have to trust anyone anymore, and much more importantly now — we don’t have to pay for the privilege. Finance is all about efficiency — a mature crypto ecosystem (we’re not there yet) is far more efficient than a mature banking system ever could be. Quite simply, there are far less people involved, most of the work of the banking system has been abstracted into code. And that is both faster and cheaper.

We’re not there yet. Blockchains like Onomy which are building institution-adjacent utility on blockchain like Forex markets, remittance, DeFi savings and loans all at breakneck pace are still seeking both adoption and integration. It’s natural, the crypto market is young. Yet the march is inevitable. Institutional crypto sounds like a betrayal of everything Nakamoto ever stood for — but it’s not. It’s the capital allocation efficiency of the blockchain taking over what the banks do because (eventually) it will be better at banking than the banks already are. The real fight now is to ensure that those crypto systems which do come online to onboard the financial system do not get co-opted by centralized powers, be that a CBDC from a national government with obscene privacy concerns or an oligarchal cartel running a crypto that is decentralized in name only.

The cypherpunk mission is now simply to ensure that this new peer-to-peer financial system enshrines privacy and remains decentralized. Otherwise we’re not making the banking system more efficient, we’re just adding extra steps and even more pernicious panopticon oversight of our daily spending activities. What you spend your money on should be your business and, year by year and decade by decade, it increasingly is not. Returning privacy to the financial system is essential to regain our liberty.

Not absolute privacy. You should pay your taxes. You can’t just steal money and launder it at will, or profit from crime and not be traceable. Yet there are plenty of ways to stop this using crypto already without sacrificing fundamental privacy rights. Soulbound tax tokens, distinct KYC’d pools for particular financial activity including high frequency trading, pseudonymous identity payment portals. Yet a decentralized financial system, alongside other decentralized infrastructure like edge networks and local internets, can stop the ever more oppressive invasion of our privacy from corporations and ultimately governments. A situation that has the potential to tip into an authoritarian hellscape faster than you can say ‘large language model.’ The ownership of your money is, and always been, the most powerful antidote to such nightmares.

A peer-to-peer financial system, like Onomy’s, is now possible with the tech we have. It’s now just about adoption and integration. We can bank the unbanked, instantly. We can community-fund local infrastructure. We can protect our privacy. We can have a more ecologically efficient financial system. We can send money anywhere in the world with no borders instantly. We can build a new economy that emulates the enormous power of the banking system without the disadvantages of bureaucratic cost and obscene political power. We can stop rapacious capitalism rewarding the few and replace it instead with a benevolent capitalism rewarding the many. We can own not just our own money, but every system through which it runs. A global network of people funding people, a society basking in the neon glow of a Nakamoto sunrise.

Local Liquidity: Banking’s New Era was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Foreign Exchange (Forex), the trading of fiat currencies, is a foundational brick in the global economy. Every day $7.6 trillion dollars flows daily through these markets, the product of individuals, businesses, traders and investors swapping different national currencies out of need and speculation.

You perhaps may only be aware of Forex through Instagram influencers boasting of spectacular gains with thirty minutes work (they’re lying, Forex trading is tough), but Forex is in fact an essential part of the global world order.

If a company in Angola wants to invest in a Chilean wind farm, they use the Forex markets. If a Polish contractor wants to send money back home, they use the Forex markets. If a Japanese bank wants to hedge soybean futures on the US stock exchange, they use the Forex market. You, when you go to the airport and pick up your holiday currency (slightly quaint, but bear with me), you use the Forex market.

The Forex market, its health and its operation, make massive differences to the daily lives of hundreds of millions of people at every level of the food chain, from migrant workers to c-suite executives. Forex matters. It matters a lot. It changes the fate of companies. It changes the fate of nations. The 1997 Asian financial crisis was precipitated by the inability of Thailand to defend its fixed exchange rate to the dollar. Argentina’s lack of forex reserves have repeatedly tanked the value of its currency. Even supposedly sophisticated financial nations like the UK suffered the infamous Black Wednesday where one trader, Soros, shorted the pound and nearly crashed the entire economy. Did we say already that Forex matters?

And for the longest time, this system hasn’t changed one bit. It’s stuck in the past, with ancient bureaucratic systems, walled gardens, and rent-seeking intermediaries. It’s a closed system whereby established players are the only conduit to activity. The premiums you pay at the airport are a direct result of this system. You can probably stomach that. However, that 0.5% when you’re investing hundreds of millions of dollars abroad stings. For a foreign worker on low wages, seeing several basis points lopped off every remittance home can make the difference between eating and not eating. The system as it sits cramps investment and stifles innovation everywhere, so why do we put up with it?

Well, because in the exchange of currencies you have the moment of settlement risk, whereby you send the $1,000,000 and wait for the £780,000 back. Who’s facilitating that? That exchange needs to, obviously, be mediated and secure. That’s what costs money at the highest level. That filters down into the whole assorted paraphernalia of trading fees, spreads, clearance, premiums, rollover fees, maintenance, commission and the rest of the laughably long list repeatedly hacks away at any profitable trading strategy and ensures that, ultimately, you will always swap one national currency for another at a loss to its true, ‘fair’ market value.

Another side effect of Forex is its ‘dollarization’ of the global economy, which acts as a peg for many national currencies and as an intratrade instrument when moving from one currency market to another (as everyone has a market pair with USD, like most crypto has a market pair with BTC in crypto). This has assured the primacy of the US in the world hegemony just as much as any aircraft carriers ever have, and is one of the main reasons the US regulatory environment has been hitherto squeamish about crypto’s potential.

Because crypto really could be the silver bullet to the Forex conundrum. Onchain exchange does not have settlement risk. The immutable, transparent code ensures transactions execute as intended. The astonishing rise of stablecoins and the ferocious pace at which they are being minted is in part in preparation for the wonderful potential of tokenization of fiat currencies globally and the opportunities this creates for local currencies to be fairly traded between the individuals and companies that desperately need them.

Stablecoins are being adopted at breakneck pace in developing countries as a hedge against their own economies, economically empowering the citizenry in a way it never could be before. The closed off system is, thanks to blockchain, now open. Efforts to capitalise on this are accelerating. Already Citi and Franklin Templeton are exploring money funds and cross-border payments.

Using crypto as a substrate for the $7.6 trillion Forex market is the easiest win the crypto market will ever have. By removing the core spectre of settlement risk and drastically improving the efficiency of cross-border trades, remittance and arbitrage, and far more inclusive global economy will emerge where everyone, including you, can get exactly the money they want, when they want it, at a fair price dictated by a global democratic market. Forex will be crypto’s killer app, a 24/7 exchange that powers local markets. Money makes the world go round, and with crypto, money will finally go round the world.

Forever Exchange; Why Forex Is Crypto’s Next Killer App was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Onomy is dedicated to a new financial system. One that’s inclusive, adaptable, and permissionless — as well as being entirely decentralized and operating 100% on-chain.

One that makes people realize the banking system we’ve been laboring under is inefficient at the very core and whose essential function can instead be comfortably replicated through code agreed upon and administered by everyone.

A financial system that can’t be switched off, manipulated, or walled behind obfuscation — but one that helps lift people out of poverty and day-to-day strife enabling all to truly take their share of the economic proceeds of human society.

A financial system that works for you, not against you.

To do that, you need a global decentralized reserve. You need easy access to adaptable liquidity that works multi-environment. You need stablecoins denominated in local currencies to foster international trade. You need decentralized, commission-free, non-custodial exchanges. You need to bank the unbanked, and install ‘instant’ banking systems in underdeveloped communities. You need better, faster, fairer and freer cash.

You need Onomy Protocol.

How It Works — The Onomy Reserve

Onomy uses a simple overcollateralization model akin to MakerDAO or Agoric. Users deposit collateral in vaults, mint the stablecoin they want, and free up active liquidity without losing their underlying exposure to the collateral asset.

Effectively, this gives you leverage opportunity — opportunity that can be gained with increasingly flexible collateral as the system expands. Onomy fully intends for the Reserve to ultimately hold a huge basket of assets to achieve its status as the world’s global reserve banks, unlike other protocols who only hold one underwriting asset like Ethereum. This potential exposes you to yield too should the underlying basket of assets grow, or should the DAO expand its holdings through Real World Assets.

To determine the price of these assets, Onomy has an Oracle Module that aggregates prices. Multiple oracles will be added over time to reduce reliances and ensure appropriate and stable price aggregation.

Vaults can be constituted of a variety of assets during a mint process — giving ultimate flexibility to savvy operators to get exactly the leverage they need, in exactly the denomination they need it, using exactly the assets they have.

Users can also transfer vault ownership, effectively creating a secondary synthetic market for the positions taken, which can create its own opportunities, vastly improving the underlying efficiency and liquidity in the system.

Of course, vaults can become undercollateralized. At this point, users must deposit more assets or lose the vault, with liquidations enforced by the Onomy Reserve, or repay the $USD (or other stablecoin) they took out when creating the vault. For vaults, creations and stability fees apply (the cost of the leverage), as well as liquidation penalties. These fees all flow back into the Onomy Reserve to continually reinforce the health of the system.

How it Works — Auctions

Should a user fail to maintain the appropriate collateral ratio on his vault, then Reserve, which periodically checks these ratios, begins liquidations through a Dutch Auction process.

A Dutch Auction is an auction whereby the ask starts extremely high and then drops continually until someone meets the ask price with their bid. On a successful bid, the user takes control of the contents and the money they pay is burned to cover the debt accrued by Reserve when it issued the required stablecoins upon vault creation.

In the event of Black Swan events (vertiginous or extreme market movements), the Reserve will simply sell the collateral outright without an auction process. Although this is extremely unlikely, if the auction fails to raise the necessary capital, the Reserve will supplement the loss through accrued fees from vaults, auctions and the PSM module (to be explained) — or simply recorded as a shortfall. The Vault Manager will also adjust the collateral-debt ratio on other vaults in the system in an attempt to claw back the losses and ensure every trader operating in it participates in its restabilization.

These functions tally with other major stablecoin foundries. Onomy’s difference is that it’s built from the ground up to be cross-integratable across the Internet’s Financial System, whilst the Reserve is multi-asset, multi-denomination, and multi-chain. The DAO intends to pursue integrations across ecosystems, making Onomy-branded stables not only the IBC choice, but an ecosystem-wide choice.

How It Works — Parity Stability Module

The PSM is simply a more direct way of getting hold of $oUSD or other o$£€ by buying it directly from the reserve rather than acquiring it as debt through posting collateral. The Onomy Reserve will simply issue it directly in exchange for other centralized stablecoins (e.g $USDC or $USDT). These stablecoins will act as a breakwater against system volatility and ensure all NOM currencies keep their peg.

There is a small fee for doing this that helps augment the overall health of the system as well as encourage and maintain that peg. The fee dynamically adjusts to maintain the peg, making it more or less expensive to mint $oUSD at various times. The Onomy DAO can also set the fees directly.

USD will absolutely not be the only stablecoin issued by the Reserve through the PSM. Remember that Onomy’s goal is to create a vibrant flexible Forex market on chain, and to do that you need multiple currencies. The Onomy DAO will vote and gradually add more stablecoins to the PSM for direct purchase. The PSM is not a one-way system either, and nom£$€ can be exchanged for their stablecoin equivalents at any time.

The Onomy Reserve

Through these three modules — Vault, Auctions and PSM — Onomy can gradually build the health of the Reserve and begin creating a vibrant multi-faceted stablecoin environment on chain that not just replicates but utterly supersedes the existing Forex market when combined with the ecosystem’s other products (like the go-to CLOB order book DEX focused on FX markets) and technical advancements. It’s a self-improving looped ecosystem that acts as a liquidity enabler for Cosmos as a whole, but also bringing financial maturity to still-developing markets. The Onomy Reserve acts as a central issuer of liquid value in ever-growing on-chain economies, securely underwritten by robust assets and equivalent capital.

As the Onomy Reserve grows, so will the stablecoins it offers to the public, and the wider its basket of assets will become. The difference Onomy offers is that through Onomy DAO, this direction will be community led. The Reserve won’t just hold equivalent stables and major cryptos, but also bonds, gold, and real estate, and other RWAs, as the DAO sees fit. It’s up to the community to decide. Stablecoins are vital, but Onomy’s stablecoins will be fully decentralized and not simply fiat banking systems in disguise.

A powerful Onomy Reserve will lead to a better, fairer, more global financial market and you — dear reader — will be the fundamental instrument of that process. Let’s change the world, one FX trade at a time.

A Global, Local Bank: How the Onomy Reserve Works was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Out with the old, in with the new. Restructures aren’t pretty, but sometimes we must tear down what once was to build things right from the ground up. Onomy’s MOGA team has accomplished what feels like 3 years of progress in just 3 months time.

As a recap, Onomy has voted to restructure and carry forth a Make Onomy Great Again restructure plan that detailed a brand new model for the Onomy Reserve, a decentralized stablecoin issuance platform (Collateralized Model), as well as plans for new product releases, and chain upgrades.

If you’ve missed it, here is the DAO governance discussion @ MOGA.

Since then, a few short months have led to:

The Onomy Network

• Upgrading to Cosmos SDK v0.5: Onomy is amongst the very first Cosmos chains to make the shift to the newest version of the SDK; this enables faster block times, the ability to add new modules, improved efficiency, better security, various bug fixes, and more.
• The DAO’s on-chain Treasury has been moved to the Community Pool module to enhance compatibility with the SDK, removing a bloated module that may have posed integration risks further on.
• IBC compatibility issues have been addressed through several upgrades.

The Onomy Reserve

• A whole new Reserve module has been architected from scratch, removing unneeded dependencies, untested integrations, and additional tail risk from the original module.
• An internal testnet for the Onomy Reserve is live, with the Onomy Validator Guild ensuring all works smoothly.
• As we rapidly approach the finalization of the user interface, the Onomy DAO looks forward to launching a public testnet within the next couple of weeks, to be followed by the mainnet release once all potential findings are fixed and once feedback on quality-of-life improvements is integrated.

Not up to date on the new Onomy Reserve model?

• The Reserve stablecoin issuance model operates on Collateralized Debt Positions (CDP) vaults. They are smart contracts that let users lock up cryptocurrency assets as collateral to mint stablecoins. You deposit assets into a vault, and in return, generate stablecoins pegged to a stable value currency. The minted currency is usually the USD, but the Reserve has a multi-currency model that enables users to mint the USD, JPY, EUR, and other national currencies. The collateral ensures the stablecoins are backed by assets exceeding their value, maintaining stability even during market fluctuations. You can reclaim your collateral by repaying the stablecoins plus any fees.
• In the event that collateral value drops below the required minimum threshold, a liquidation process will ensue.
• Various liquidation scenario tests to ensure viability of the platform were conducted. You can view the report here.

Partnerships

• All Onomy Validator Guild members — some of the best across Cosmos and other ecosystems — remain in the validator set and stand ready to support what is to come.
• Market making partnerships with Wintermute and DWF Labs have been secured — these are the biggest players in liquidity, and Onomy market making is done by them. Notably, Onomy is one of the few low-cap projects that Wintermute has chosen to support.

Up Next

The Reserve is just the beginning! With the Reserve in production, development focus will return to a brand new dCLOB DEX to facilitate FX trading of the Reserve stablecoins. The DEX will support other stablecoins such as USDC and USDT, positioning Onomy’s new DEX to become the home of IBC Stableswaps, a la Curve on steroids with full order book trading and advanced market making connectors enabling HFT and sophisticated strategies.

Token Ticker

Many community members have voiced support for a token ticker change from $NOM to $ONFX, signaling the new era of Onomy. This will likely go to a vote soon.

Onwards!

Onomy Protocol

Make Onomy Great Again — A Roadmap Update was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Stablecoins are quite easily crypto’s greatest utility use case to date. Yes, the far flung prospects of sovereign identity, data security, local community voting, and the ultimate downfall of traditional financial systems (and the power systems that underpin them) are exciting. Of course, alternate value systems like Bitcoin et al are the ultimate end goal. Yet, to date, stablecoins — cryptocurrencies whose value is pegged to existing fiat currencies — are the frontrunner in proving to the mainstream what crypto can do.

In some senses it’s ironic — crypto just emulating the fiat power structures. Yet otherwise it’s obvious. Stablecoins in a fully integrated crypto financial system are just a better form of cash. Safer, more secure, faster, more efficient, and far more liquid globally than fiat could ever be — with ever-evolving utility in the crypto financial space. Stablecoins are infinitely more effective for cross-border payments, remittance, arbitrage liquidity than fiat could ever be — and their use case is only growing.

Stablecoins for Foreign Exchange with Onomy

Onomy Protocol is a dedicated platform for trading fiat-denominated stablecoins that will completely revolutionise foreign exchange (FX) as we know it. A way to reduce the massive inefficiency in current FX markets, help promote cross-border trade, remove the crushingly expensive spectre settlement risk, smooth remittance, and put the cash in everyone’s wallet that they need for their everyday activities all of the time.

All this while reducing friction in the machinery of global finance and helping businesses get ahead in their international investment, helping FX traders find localised arbitrage opportunities that make FX currency swaps fairer and more accurate for everyone involved — from the largest institution to the smallest individual.

The Rise and Rise of the Stablecoin Industry

The stablecoin industry is growing at a breakneck pace. Total stablecoin market cap sits at a whopping $170 billion. At time of writing, daily transaction volumes are a shade under $100 billion. 90% of all stablecoins are USD denominated, with 70% of that accounted for by Tether’s USDT. Tether itself posted an eye-watering quarterly profit of $4.5 billion. They’re nowhere near the only game in town either. Circle’s USDC holds significant market share as an alternative and is rapidly expanding across multiple chains to make crypto payments a tangible reality.

Both Tether and Circle are centralised operators, however, but decentralised stablecoins do exist, prominent amongst them being DAI — which collateralises issuance of its stablecoin through crypto assets provided by the community. Perhaps most interestingly, roughly 70% off all DeFi transactions are made using stablecoin pairings. Not wrapped Bitcoin, not Ethereum or Solana or other blockchain substrate currencies DeFi exists on, but stablecoins issued by and large by central entities. At this rate, we may run into problems with new even less regulated ‘world banks’ than we already had in the first place (sorry Nakamoto) — something legislators the world over looking at, with Tether already signalling it may leave the EU due to the MICA regulation.

We’re also noticing a surge in Euro issuance. EURT (Tether), EUROC (Circle) and Stasis Euro have all seen increases in both issuance and transaction volume. It doesn’t stop there either, with Tether recently announcing their Dirham-denominated stablecoin to cater to the Middle East market. Indeed, stablecoins have seen a particular surge in use cases in places like Latin America and Africa, due to the poor banking infrastructure in these countries. Stablecoins are a godsend to populations whose banking system is otherwise immature and where access to and security of their main fiat currency is not guaranteed. It’s here where blockchain proving its purposes as the first roots of an alternate financial system are really taking hold.

The Need for Stablecoins with Crypto Principles in Mind

If it isn’t obvious by now, stablecoins are not just here to stay, they are set to take over the world. Yet how we handle their reserve-backing, their issuance, their security, and use cases is still important. Centrally issued stablecoins suffer from painful issues of oversight. It’s a licence to print money and, as Tether is proving, a profitable one. It’s essential as we begin using stablecoins more for our everyday online interactions, our invoices, and our payments — that the governance of them is enacted in a way that stays true to crypto’s fundamental principles of decentralisation, permissionless access, and transparency and auditability.

Onomy Protocol, unlike all other stablecoin issuance protocols, won’t just let you mint one denomination of currency, but all denominations. Yen, Renminbi, Euros, Lira — you name it, you got it. Chiefly, it’s a protocol for institutions and FX traders to make the high volume transaction trades they need at the lowest possible margin on the FX markets, but its stablecoins (Denoms) are also good at what all other stablecoins are good at — payments, remittance, cross-border trade, and of course DeFi. They bank the unbanked, and provide a simple method of getting the currency you need directly integrated with the ever-expanding crypto ecosystem as a whole. All Denoms are collateralized by community crypto-reserves, including $NOM — Onomy’s main coin.

How Onomy Provides a New Platform for Stablecoin Growth

The need for a more flexible stablecoin solution at low-margin efficiency and the knock-on exponential effects this can have on the FX market are obvious, and Onomy will be the first to market in providing this solution.

Foreign Exchange is a market that is desperately ripe for innovation, controlled as it is by a few key players who block efficiency in the market as a whole and damage even the largest institutions’ bottom line. Although yes, it is currently possible to swap USDT for EUROC, the expense of doing so on say — Ethereum — damages that margin, and neuters the prospects of a general purpose blockchain being a suitable forum for FX trade on-chain. Onomy, however, is custom-built for that exact purpose — seeking to provide FX traders, institutions, and retail users the fast throughput and low-cost transactions they need to make their trades worth it and to get the currency they need for payments, remittance, lending, and anything else you want — you’re a sovereign individual.

In a decade, stablecoins will be more widely used than cash. We hope that isn’t in the form of government account-based CBDCs, and we hope it isn’t all hinging on the auspices of a few giant private issuers who control the market. Both those future realities have the potential to be worse than the banking system we have now.

Onomy is not only trying to offer a decentralised FX solution apt in efficiency, but also the decentralised, community-led governance of a global reserve bank issuing the quality stablecoins everyone in crypto craves.

Opening the Stable Doors: How Stablecoins Look Set to Rewire Global Finance was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Two weeks back, Saudi Arabia unceremoniously ended an agreement that had been in force for 50 years, one which has girdered the birth of globalism and underpinned the economic systems of the international world order — the petrodollar deal.

The Most Important Deal You Might Not Have Heard Of

The deal had previously all but guaranteed the dominance of the dollar for the modern era. There are other factors too, of course — American economic and military primacy for one. Yet power is recursive, and the more that the world used dollars as the default reserve currency, the more American dominion became entrenched.

A huge bedrock of that was the fact that oil, nature’s catalyst, could only be bought with dollars through OPEC, and that denomination meant all nations had to have substantial reserves of USD on hand at all times to fuel their economies — something which gave the US enormous geopolitical advantages both back in the 1970s all the way up till today.

The petrodollar was a knock-on effect of the US coming off the gold standard — when the spectre of runaway inflated ‘fiat’ became all but government policy — although at the time economists like Maynard Keynes ‘rejoiced’. The petrodollar agreement kept the currency strong in the face of this threat, as every country in the world was hungry for dollars to keep their trucks moving and their boilers lit.

The End of Fiat?

Its end comes at a time of unprecedented fears about the threat that uncorrelated and unbacked fiat currencies pose to global economic stability. For the last 15 years, we’ve seen an enormous rise in the value of tangible assets; gold, stocks, and of course crypto — the main beneficiary — as populations look for alternate systems of social wealth that aren’t reliant on the auspices of a few civil servants and short-termist politicians behind closed doors. One which establishes financial self-sovereignty and egalitarian economies at a time when state-sponsored capitalism has never looked so fraught as a social system.

Add to this ‘domestic’ fear — if we take the American point of view — the ‘international’ fear of the dollar’s dethronement as the world’s reserve currency. For decades, the BRICS nations — China, India, Russia, Brazil, South Africa — have bemoaned the disadvantageous conditions imposed on them by their requirement to use dollars on the international stage. Now, it seems, they’ve had enough.

New Threats to the Dollar

The talk of a new BRICS currency will radically alter global geopolitics in a way few suspect. The world has become almost comfortable with American hegemony, even those naturally considered its opponents. A BRICS currency, mooted to be reserve-backed by a combination of gold, crypto, baskets of foreign currencies, and industrial assets, would literally change the world. It might be subtle, but once everyone is trading their national wealth in something backed by more than American military dominance — where America’s opinions no longer matter so much — the international landscape of business, and opportunity, will change.

Why This Matters to Crypto

Why does this matter? Why does the end of the petrodollar mean anything for the integration of crypto at an institutional level?

It’s because it’s a symptom of a sea-change that began with crypto in the first place. The ability to consecrate trustless unimpeachable value that can then be traded freely in the digital economy whilst retaining self-authorship and ownership of funds. A return to anti-authoritarian suspicion by the population. The chance for a generation of young people to own their own wealth.

The petrodollar is just the first of many mainstream untetherings from fiat and the latest in a succession of global events that have refocused the importance of true ownership for individuals and institutions. The lack of a truly ‘safe haven’ currency creates a far more dynamic Forex and Real World Asset market with price-relationships less mediated by the price of the dollar that day. Exchange rates will inherently become more volatile.

Institutional balance sheets are, over the next few years, going to become a lot more diversified — with portfolios managed across multiple currency streams and in multiple fiscal environments — including on-chain. This already happens, of course. The point is the end of the petrodollar is the first of many dominoes that will fall that will eventually unseat the dollar’s dominance, and a new, more pluralistic global economy will emerge as a result.

Onomy’s Role in the New Economy

Onomy plans to be the centre of that new pluralist global economy. The chain is designed to be a marketplace for Forex and Real World Asset trading underpinned by the crypto-primitives that have restored wealth-ownership to the masses. The ONEX exchange supports not only crypto assets but also representative real-world assets and currencies that can be traded at the throughput necessary to conduct international trade. Stablecoins can be minted on Onomy using $NOM as one of the underlying collateral types to facilitate on-chain Forex trading at a fraction of its usual bureaucratic cost. All this is managed through the Onomy Superapp, which is not just for individuals looking to store assets but also for institutions who are beginning to bridge their real world portfolios on-chain to interact with the self-sovereign economies that are beginning to emerge.

Petrodollar, BRICS currencies, US economic travails — all of these are just the harbingers of something more. A likely detachment from the money systems almost every person reading this has known their whole lives. The return to real hard assets away from pieces of paper. An increasing look towards a reserve-backing for currencies that doesn’t ultimately extend from the point of a gun. A more sovereign and autonomous market with the crowd being the bank (e.g DeFi), the crowd acting as escrow, the crowd facilitating international trade — all through on-chain systems that are fairer, more equitable and — get this — faster and more efficient. When that new economy arrives, Onomy will be the rails on which it operates. A foundational interface for financial self-sovereignty. The access point to the new era of globalism.

The Demise of the Petrodollars and the New Economy was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Onomy DAO is excited to announce it has officially become the 2nd security provider chain within the Cosmos ecosystem, after launching its Onomy Exchange consumer chain.

The DAO voted in favor of launching the Onomy Exchange consumer chain on mainnet, with a turnout of 88.7%, backed by a voting power of 85.1% of staked NOM.

In 2023, the Cosmos Hub underwent a protocol upgrade, enabling Replicated Security. Before, to launch an app-chain in Cosmos, you had to make use of the Cosmos SDK, a blockchain creation toolkit, then invest significant resources into onboarding validators that would secure and decentralize the network. While worth the effort for builders wanting to take advantage of the benefits ensued by application-specific blockchains, it represented a bottleneck for early-stage teams that were stretched thin.

The initiative was well received by the Cosmos Hub DAO, who voted overwhelmingly in favor, and was soon followed by the first independent consumer chains launching with the shared security of the Cosmos validator set.

As a layer-1 determined to build the next wave of consumer apps and be a core pillar of the Internet’s Financial System, Onomy needs products that enable adoption, advance on-chain trading, and simplify asset management, all whilst being interoperable with the rest of the on-chain realm.

In June 2023, the Onomy DAO voted in favor of upgrading the Onomy Network to support Replicated Security. Since then, intensive iterations and multiple testnets were carried out to prepare the network for the launch of its first consumer chain, the Onomy Exchange — a first-of-its-kind hybrid, cross-chain DEX fusing AMM liquidity pools with an orderbook UI supporting advanced orders, and thus creating the CEX experience on-chain.

After significant community debate, the DAO unanimously agreed that Replicated Security would provide significant benefits to core, Onomy-built consumer chains, as well as sovereign chains looking to join the Onomy Ecosystem, with a turnout of 80.9% of staked NOM supply voting 100% in favor. Out of 88 IBC-connected chains, Onomy Protocol and the Cosmos Hub are the only two security providers.

Onomy’s products “have the potential to play a pivotal role in Cosmos,” Bitfinex & Tether CTO Paolo Ardoino said in a statement.

The Onomy Validator Set, consisting of leading firms Cosmostation, Ledger, Citadel One, Chorus One, Strangelove, Stakecito, Decentrio, and others have all agreed to support Onomy’s Replicated Security Expansion. Furthermore, new Onomy entrants like Cosmos development & validator firms Strangelove and Decentrio, were approved by the DAO and have committed to provide technical support, write interchain tests, assist with development & maintenance of the Arc Bridge Hub, set up new IBC relayers & paths, and assist with the Replicated Security roll-out.

With Replicated Security, consumer blockchains lease security from a provider chain. Their transaction blocks are produced by the provider chain’s validator set. As the term implies, the provider chain validators are obligated to secure the consumer chain (if such is voted by the DAO).

The DAO vote to deploy Replicated Security on a new consumer chain can be imagined as a service agreement — one where specific terms are set and agreed on by $NOM holders. There’s an infinite number of terms that could be negotiated — software can enable close to anything the DAO wants to do in search for the right financial model, with the core goal to align and unify Forex, RWA, and payment-related app-chains within a singular, thesis-driven ecosystem.

The integration of replicated security and the launch of the first consumer chain, enables all to build on Onomy, attracting new participants and app-chains, growing the number of teams working in the Onomy Ecosystem, diversifying the application set, and facilitating seamless cross-chain communication and interoperability amongst all app-chains while providing interoperability with Cosmos IBC, EVM, and more via the Arc Bridge Hub. Validators in the Onomy Validator Guild (OVG) will secure additional app chains, and staking rewards plus fees from consumer app chains may be allocated toward parent chain validators and delegators of NOM.

In result, this also increases incentives for more validators to join Onomy (as a parent chain), encourages new community members to join the ecosystem, enhancing the number of teams and peer review efforts being conducted on the Onomy Network. “Consumer chains aren’t just passengers — they’re sailors who can help steer ships towards major ecosystem growth”, said Lalo Bazzi, founder of Onomy.

About Onomy

Onomy Protocol is a growing ecosystem enabling the Internet Financial System (IFS) that blends DeFi with seamless consumer applications across real-world assets (RWAs), payments, DeFi, and the $6.6T/Day Forex market.

It is the second provider chain in all of Cosmos via an Interchain Security upgrade, after the Cosmos Hub, and is interoperable with both IBC and EVM ecosystems. Onomy is poised to be the home for the next wave of consumer apps.

Onomy Enters Modular Era: ONEX Chain Now Live on Mainnet via ICS was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

DCA — Dollar Cost Averaging. ‘Dakka!’ The mature investors’ credo. The simple act of fixed investment. The not so simple behaviour of patience and consistency. For many, DCA is the mantra that takes them to the moon. A quiet belief and enduring fortitude in the face of the most volatile market in world history.

Dollar cost averaging is the practice of investing a fixed amount (in this case, of dollars) on a periodic, scheduled basis with no regard for the current price of the asset invested in. In simple terms, on the 1st of the month, you buy $200 of $NOM, at $50c, $90c, $2, or $100 and at -24%, +22% and +2400%. You don’t wait a day. You don’t buy the dip. You just buy.

The habit is reinforced by another old adage, ‘Time in the market beats timing the market.’ If you’re perennially chasing highs and lows, your strategy swinging as wildly as the market itself — you leave yourself open to risk. You are, effectively, gambling more and investing less. True investment success is about time, patience and belief — yes, even in crypto. Following a rigid DCA strategy enforces that behaviour.

The side benefit is massively reducing your blood pressure. Shoving significant portions of your network on the crypto roulette wheel is exhilarating, but exhausting. Fiddling with your portfolio, buy sizes, and trying to get it ‘just right’ is a short route to despair. Offloading coins just as they pump 10x, with more tech released everyday, is enough to give anyone regret. DCA lets you close the door on the heart-pounding thrill of it all, and return to a truer, more pure belief in the market as a whole.

And it works. DCA is often touted as the single best way to be involved in any market. The Sage of Omaha, Warren Buffett — the posterboy for the TradFi investment world — is a big fan. Even in crypto, many advise that the more volatile the market, the more dollar cost averaging in your favourite cryptocurrencies makes sense. Sure, not all will make it, but the ones that do make it all worthwhile.

As such, many take DCA in crypto to heart. The slight issue is they get the wrong idea. ‘Should I DCA into the dip?’ is not a logically coherent sentence. ‘I upped my DCA this month because I believe Bitcoin will keep going up’ is effectively missing the point of the strategy. Yet these are questions and statements you hear often. No. Don’t just DCA anything, just DCA — that’s the beauty of it.

What crypto those dollars go into, however, is of course part of the fun. If you see your ‘DCA’ allocation in the crypto market as a whole, not just a specific coin. Building a wide, varied, multi-chain portfolio using $200 a month is a fun, collectors approach to crypto that pays off in spades if you stick to it.

Rumour is ONEX contributors will bring DCA functionality into the Onomy Nexus — set one recurrent market buy order and forget about it! Until you turn it off that is.

What is Dollar Cost Averaging in Crypto? was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Flexible security models are the future of scalable blockchains. Onomy’s status as a provider chain will establish it as a Hub that secures a new generation of independent flourishing L1s that are all tied together by the collective, modular security provided by the $NOM validator set. Infinitely scalable, purpose-driven value with true governance and interoperability is what will lead to the Internet Financial System, and is what Onomy is driving towards.

What’s the IFS, you ask? An alternative financial system residing on the web. One that abstracts away all on-chain complexity and is more akin to traditional finance, yet retains the crypto ethos and all the cutting edge features that come with it. From consumer apps, to trading, gaming, paying, collecting data, and of course, meme degeneracy. One click, one ecosystem.

Think of it this way. Right now we have memecoins. With Replicated Security offered by provider chains like Onomy, we could have memechains. Onomy will help create scalable consensus through modular security. Great utility will naturally attract additional security. Not everyone needs to fight for the same blockspace, and not everyone has to.

A Modular Ecosystem of Value

Using modular security, L1s will flourish all with their own sovereign rules and be able to spin up utility at breakneck pace. Builders can focus on their apps instead of infrastructure. Rather than roadmaps detailing potential future governance votes for $PEPEWIFBAG holders, it’ll be easy to have it live from the first TGE, with consumer chains allowed to lend security in exchange for fees to provider chains. Holders can sign in with a Cosmos wallet and instantly enjoy voting power as they join a new appchain, and then the carnival of created value will really begin as communities rally to distinguish themselves.

Now, exchange the concept of memechains with appchains that are ideologically driven to improve the current financial system, the state of privacy, medical bureaucracy, remittance, sensor arrays, local internets, foreign exchange, authentication, data-custody, gaming, art, and of course good old store of value, then you see why flexible, modular security is such a tantalising long term proposition.

Bringing Out The IFS Guns

Onomy sees modular security as the key to the Internet Financial System (IFS), where sovereign digital decentralised appchains trade, provide utility, and exchange data and value permissionlessly and free of censorship through federated micro-economies.

Investing in an appchain secured by Onomy we — the broader crypto community — are not just investing in an Ethereum-locked token using ancient architecture that’s difficult to build on and scales only through sheer pain and massive expense. The expense and snail’s pace function of monolithic chains like Ethereum is hugely problematic.

Block space is at an absolute premium, and the fact that its use only makes the gas fees go up, is anathema to the wider adoption of crypto. The current status quo stalls recognition of its ability to rewire the sysadmins of daily existence and deliver value to a huge decentralised swathe of stakeholders while doing so. Token value only delivers on their status as speculative assets or solutions to the problem of the L1 like Ethereum itself, not for the actual use-case they provide.

How can industries like Forex, real world assets, consumer DeFi, or derivative markets, or stablecoin remittance, or any financial model exist in a world where the grander the scale of the activity, the more inefficient it becomes? Efficiency is the lifeblood of global finance. Modular security is needed to deliver it.

Organic, 100% Homegrown Token Utility

Through Onomy, tokens will find their use-case fast. Tokens that are access-control for the dynamic, sovereign, lively appchains whose value proposition can be completely unique and driven by the community’s wishes, but have interoperable value with an entire decentralised economy of other appchains which they can interact and trade with.

This is the modular chain thesis, a belief that shared security can be offered to all chains. Either through ironclad Replicated Security from the Cosmos Hub or provider chains like Onomy, or through Opt-In Security or Mesh Security. Mesh Security is more for chains who want to share security amongst one another without having to run additional validators, instead staking tokens with one another to create shared security incentives.

As chains prove their value in the wider ecosystem, they will gravitationally attract from validator security that reinforces their place within it. These security regimes are ‘complementary, not rivalrous’, and act as ‘upgrade paths for maturing appchains’, per Binance’s recent report.

With these rented security paradigms, appchains can keep their sovereignty and scale infinitely while simultaneously reinforcing value to every other appchain that interacts with them. This creates faster innovation, and better yet creates opportunities for certain validator sets on consumer chains to differentiate themselves by focusing their validation efforts on chains that are providing for one sector of the blockchain economy, say RWAs or Forex.

It creates opportunities for small validator sets to provide specific services for micro-sections of the wider blockchain industry. Provider chains can validate on-chain activity faster than any monolithic chain ever could, and thus provide the throughput required for something vast, international and high frequency like payments or bold-yield swaps.

Ethos Intact

All of this can be achieved while never sacrificing crypto’s core principles of decentralised, immutable, censorship free trust. Onomy, with the focus on DeFi, foreign exchange, stablecoins payments, and real-world assets — the advanced mechanics of modern finance writ large on-chain, will be a nexus point for that innovation.

It is with great pride then that Onomy will become the 2nd ever provider chain of Replicated Security on Cosmos, second only to the Cosmos Hub, but with a different mission — one to empower the next generation of consumer apps that build towards an open, shared, incentivised, yet sovereign and decentralised internet. Our place as a forerunner for the modular chain thesis is assured, and soon other appchains on Cosmos will be able to use Onomy’s validator set to secure their appchains and enjoy the decentralised trust and sovereign development of their use case.

Onomy’s replicated security thesis is coming to fruition, with the very first consumer chain, to soon be launched on mainnet. Pending DAO approval and final tests, the Onomy Exchange shall arise as Onomy’s first core consumer chain, paving the way to many more Onomy & contributor-build chains & products.

NOMing Around

As the modular Onomy economy scales, $NOM holders earn fees from chains the validators secure, as well as airdrops, incentives, and direct access to a novel, secure ecosystem building at the bleeding edge of Web3.

Once approved, any appchain project will be able to petition Onomy for its validation services and enjoy the full benefits of Replicated Security provided by $NOM instantly while they set about creating the scalable utility that leads to blockchain being a part of our everyday lives, with it finally able to provide the efficient value-data transfers necessary to make the Internet Financial System a reality.

Modular Chains, Scalable Value: A Glimpse Inside the Modular Internet Financial System was originally published in Onomy Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.