Onomy Protocol Opens The Door For Institutions To Take On DeFi

Onomy
Protocol has recently announced plans to open the world of
Decentralized Finance (DeFi) to traditional Centralized
Finance (CeFi) operators with its ambitious cross-chain
stablecoin infrastructure.

Institutions worldwide are
looking to tap into blockchain’s edge on secure, trustless,
and quick transactions. Financial entities are aware there
is a Great Financial Migration currently underway, but they
face significant stumbling blocks as they move their
currency operations on-chain. Goldman Sachs’ Crypto Trading
Desk is one of the first forays into blockchain by a major
bank, with private entities like Fidelity Investments
providing enterprise-grade custody and execution services
for institutional investors. Likewise, JPMorgan has just
announced plans to give wealth clients direct access to
crypto funds.

Despite the acknowledgement of the
promising underlying technology, volatility is cited as the
primary concern holding back traditional institutions. This
has led to the proliferation of ‘stablecoins’ that are
digital crypto tokens pegged to major national currencies,
enabling access to decentralized finance and crypto
financial infrastructure whilst evading volatility concerns.
Stablecoins have grown from a market capitalization of $10B,
to over $108B within the year, spawning an entirely new
segment of financial products that offer extremely
competitive yield when compared to traditional financial
products. Stablecoins are currently dominated by US Dollars,
but Onomy Protocol sees an imminent future wherein other
major national currencies will gain prominence in the
cryptocurrency space – opening the door to foreign currency
exchange markets (Forex) migrating on-chain.

Onomy
Protocol provides the bridge for this migration, empowering
institutions to onboard their fiat exchange operations
on-chain through the use of stablecoins, conceiving a new
and enhanced outlet for the $6.6 trillion daily volume
traded across the foreign exchange markets. Through Onomy,
users are empowered with a secure platform to onboard their
liquidity into decentralized finance in a manner that evades
volatility concerns and provides access to novel products
and yield opportunities not present in traditional
finance.

By making Forex more accessible by plugging
it into the booming blockchain economy, it opens
opportunities for banks, enterprises, and retail users to
enhance the utility of their assets. Institutions have
traditionally struggled to implement new technologies at
scale due to the size of their operations and depth of asset
pools, but Onomy Protocol’s products will sustain the
migration.

Moreover, each blockchain platform is
siloed unto itself, increasing friction and inefficiencies
when attempting to exchange assets cross-chain. Onomy is
built on cross-chain architecture, enabling assets to
transfer freely amongst prominent blockchain
economies.

Onomy Protocol bolsters adoption through
the suite of products available on its ecosystem, powered by
the ONET blockchain, a Proof-of-Stake and
application-specific network operating at unprecedented
efficiency. These include the ONEX (Onomy Exchange), a
hybrid DEX that converges automated market maker (AMM) and
order book functionalities into a standalone stablecoin
& native assets exchange, suitable for emulating the
Forex market on-chain.

The stablecoin economy is a
force to be reckoned with, granted that even under the heavy
storm of market plunges, stablecoins have proven resilient
and have effectively maintained their peg, allowing for the
entire market to grow due to the confidence in these digital
safe havens.

Onomy Protocol therefore plans to build
on the success of fiat-pegged digital assets, opening this
economy to holders of the world’s 100+ currencies, who may
easily mint, trade, and lend stablecoins.

Institutions
will participate and onboard liquidity into a cross-chain
stablecoin economy in an efficient manner that emulates and
eventually supersedes their traditional operations. With
trustless transactions being validated at speed, financial
institutions can leverage their currency reserves to take
advantage of the DeFi marketplace and other opportunities
that develop as blockchain technology evolves.

To
enact this goal, Onomy has announced one of its partnerships
with Avalanche, a prominent and interoperable blockchain
economy backed by Andreesen Horowitz’s A16z crypto fund,
which facilitates the deployment of decentralized apps and
enterprise blockchains.

Onomy Protocol aims to serve
as the world’s decentralized reserve bank. In allowing both
retail and institutional users to mint, deploy, exchange and
utilize their currency reserves through digital stablecoins
that can interact with the entire DeFi landscape, it solves
long-standing issues that hamper the potential of the Forex
market. Just as the computer and the movement away from the
gold-standard unleashed an economic explosion in the
mid-seventies, Onomy hopes to be the bridge that realizes
the potential of currency markets, and currency
itself.

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