What is OMM ?
OMM is branded as ‘the money market made for everyone’. It can be used to supply assets to earn interest, borrow assets for short-term loans and earn OMM for doing so.
OMM is a money market on the ICON Network that operates as a DAO (decentralized autonomous organization), owned by its community. OMM is an open money market: a decentralized peer-to-contract money market protocol built on the ICON Network, with a direct fiat currency on- and off-ramp through the Bridge widget. One major way OMM differs from traditional money markets: It is peer to contract or pool and not peer to peer. It aggregates the available assets into a pool rather than matching suppliers with the borrower. The decentralized exchange -DEX used by OMM doesn’t need a trusted third party whereas the centralized exchanges use a trust based system.
The Need for OMM:
There is a need for a protocol or platform for seamless integration of traditional and decentralized finance that also reflects the advance in blockchain technology. OMM can be that missing link. OMM’s mission is to lower the friction between traditional banking services and decentralized financial infrastructure, while offering crypto currency holders the opportunity to borrow fiat backed assets against their crypto assets.
Money market and Open Money Market (OMM) in the context of traditional and decentralized finance:
In traditional finance, money markets provide short term funding and liquidity for borrowers. Additionally, money markets are attractive for investors with excess cash, given relatively high interest rates and immediate liquidity. The liquidity and attractive relative returns have made money markets a cornerstone for corporations, small businesses, and consumers alike. These markets are becoming equally important in the block chain ecosystem, with the rise of Compound and Aave as a key component of decentralized finance. The OMM protocol creates a functioning money market on the ICON Network.
OMM as a protocol brings Suppliers and Borrowers holding different crypto assets together. Both Suppliers and Borrowers can earn OMM Tokens (OMM) as a reward for the liquidity provided to OMM.
OMM is a very good example of a free market at work. Each money market has interest rates that are determined by the supply and demand of the underlying asset: when demand to borrow an asset grows or supply is removed, the interest rates increase to incentivize additional liquidity. With the OMM protocol’s interest rates set algorithmically based on supply and demand, users will be able to interact with ICON-based assets frictionless, without a trusted central party.
OMM is a real example of Interoperability at work:
OMM’s goal is to bring many assets and their holders to the ICON Network, and provide a money market for popular assets on the ICON Network, eventually becoming a go-to cross-chain money market. With the Bridge widget integration, even people unfamiliar with crypto will be able to access OMM effortlessly.
Interact with OMM platform.