A Complete Guide to the Omni Layer and Omni Blockchain Explorer

Over the years, the question of Bitcoin’s lack of scalability has given rise to several innovations that have attempted to come up with a viable solution. Granted, Bitcoin is the pioneer cryptocurrency; however, while its rigid technical architecture ensures network security, it also features a caveat where it prohibits scalability. 

Simply put, there is no way for developers to leverage Bitcoin’s network to create tokens and build smart contract enabled platforms, as is the case with the likes of Ethereum’s blockchain network.

Omni Layer is a protocol built on top of the Bitcoin blockchain to allow anyone to expand the capabilities of the Bitcoin blockchain beyond the original design, thus enabling the creation of digital assets and the deployment of smart contracts, among other applications. 

The Omni layer was built on top of the Bitcoin network to facilitate decentralized, distributed, and peer-to-peer transactions that are simply impossible on Bitcoin’s main network.

Here is an in-depth look at what the Omni Layer is all about.

What is the Omni Layer?

The Omni Layer is not a self-sufficient blockchain network; it is built to advance the future of the Bitcoin blockchain by enabling smart contracts and decentralized trading. 

Of all the meta-protocols built on the Bitcoin Blockchain, the Omni Layer is by far the most popular if not the oldest. Created by JR Willet who is the protocol’s principal architect, Omni Layer started as Mastercoin in 2013 then moved to become an open-source protocol. 

At its core, the Omni protocol is a blockchain layered over Bitcoin’s blockchain and features a native token called Omni. The creators of the protocol designed it as a bridge that will enable anyone to produce tokens, send and receive those tokens or exchange them on the blockchain on a peer-to-peer basis. 

This enables developers to program these digital assets similar to how ERC20 tokens on Ethereum’s network operate as programmable money. Using Omni, these tokens can be developed with complete self-governing ecosystems as well as with smart contracts, thus improving Bitcoin’s scalability. 

Here are some of the features that the Omni Layer brings to the Bitcoin network. 

Decentralized Cryptocurrency Exchange

The Omni Layer facilitates the exchange of digital assets created on its protocol in a fury of economic activity similar to a decentralized exchange. For instance, a user looking to sell token A can create a transaction with a certain amount of tokens and publish the information on the Omni ecosystem. Buyers looking to purchase token A will be able to see the seller’s transaction and fulfill the terms of the trade. At finality, the trade is settled between the wallets of the seller and the buyer without an intermediary. Anyone on the network can perform such a transaction and there are no transaction fees involved. 

Customized asset creation

Thanks to the Omni Layer, users can leverage Bitcoin’s enormous hash rate to create user-oriented tokens and cryptocurrencies just as they would create an ERC-20 token or a BEP-20 token on Ethereum’s network or the Binance Smart Chain. Omni Layer introduces simplicity into the equation by simplifying the process through which developers can leverage Bitcoin’s network to create custom tokens that represent various assets. Some of the tokens built on top of the Omni protocol include the Omni token itself. Tether USD, Synereo AMP, and MaidSafeCoin, to mention a few.

Non Fungible Tokens

Recent updates to the Omni Layer protocol have made it possible for anyone to create non-fungible tokens using the Omni Layer. This new update enables the creation and management of uniquely indexed digital assets that can be used to represent art, real estate, or other valuable and rare items in the real world. 

Decentralized crowdsourcing

With the Omni Layer, crowdfunding has never been easier on Bitcoin’s blockchain. Omni facilitates easy crowdfunding where token issuers can receive funds to further develop their decentralized application through direct crowdfunding without the need for a third-party mediator. This feature of the Omni Layer operates pretty much the same way as Kickstarter does, where innovators appeal to the crowd for funds in the form of cryptocurrencies to further advance their innovation. Given that the Omni Layer does not feature a fully-fledged blockchain it still relies on Bitcoin’s security structure. This means that a part of the transactions on the Omni Layer will still have to be paid in BTC. Therefore, the Omni Layer deploys an elaborate system where small amounts of BTC are sent back and forth between wallets to trigger transaction finality. 

How the Omni Blockchain works: Tether USD a Case study

Tether USD was launched in 2014 and has since grown into one of the most significant digital assets built on the Omni Layer. At its peak, the Omni Layer was being used by more than 15 exchanges offering the trade of digital assets such as the network’s native Omni token, Tether USD and MaidSafeCoin, among others. This brought the Omni Layer protocols to heights of achieving more than 100,000 transactions on its network. 

Granted, Tether USD is supported on multiple blockchains; however, its Omni Layer supply peaked in 2018 at just over 3 billion USDT tokens. For this reason, we shall use USDT as a case study to understand the inner working mechanisms of the Omni Layer Blockchain.

To begin with, sending Tether USD (USDT) comes at zero transaction fees which is one of the main selling points of using USDT on Omni Layer. However, since the transaction finality is courtesy of the Bitcoin blockchain, there is a small Bitcoin fee that needs to be paid. 

For instance, if Alice sends 100 USDT to David using the Omni Layer protocol, the Omni Layer protocol will generate a new wallet address on top of the Bitcoin blockchain to act as the destination for the 100 USDT. Therefore, to activate David’s newly created address, a small amount of BTC (usually about 0.0000543 BTC) will be credited to David’s wallet with a “tag” that points to David’s wallet as the receiver of the 100 USDT. 

Essentially, Alice will perform the transaction free from fees apart from the small amount of BTC credit to David’s wallet that Alice has to attach with her transaction.

Likewise, when David now wants to move the 100 USDT on the Omni Layer to another user, or simply move the tokens to a cold storage wallet address, David will also need to fund the destination of those tokens with some small amount of BTC to cover the transaction fees on the Bitcoin layer. The latest version of the Omni Core protocol however has introduced additional methods of funding transactions where the inclusive BTC fee can be paid and funded through different sources. 

The purpose of the small transaction fees paid in BTC is to prevent double-spending and also to help the network miners differentiate Omni Layer Transactions from regular BTC transactions. 

Navigating the Omni Layer Blockchain Explorer

Blockchain transactions are public, and the Omni Layer is no exception. As with most Blockchain explorers, the Omni Layer explorer is designed to enable easy access to the entire transaction history of a specific address.

Navigating the Omni Layer Blockchain explorer is straightforward as you get access to an intuitive interface that is easy to understand. You can use it to check for double-spending or investigate how much of a token’s supply is circulating.

To get started with the Omni Layer Blockchain explorer, first go to the Omniexlorer.info site where you will be able to see a graphical representation of all the active transactions taking place on the Omni Layer.

You can search for information by a wallet’s address by inserting the address of the wallet you are searching for in the search box at the top right corner of the site.

The Interface of the Omni Layer Blockchain explorer is quite intuitive as it comes with an easy view of the total number of transactions on the network in the last 24 hours. You also get information on the total number of digital assets or “OMNI Properties” currently in existence. The explorer also shows you the latest exchange rate and since there are no fees on the Omni Layer, the exchange rate is shown in BTC.

Just below the graph, you can view the blocks that have been mined with timestamps as well as information on the types of transactions down to the value transacted on each block.

Each block also comes with a full list of all included transactions, and you can view independent transactions in the block as seen in the image below.

For each transaction, the Omni Layer explorer gives you the following information in a quick view;

• The amount transacted
• The type of digital asset used in the transaction
• The wallet address of the sender and recipient
• Number of confirmations achieved with the transaction
• Total Omni Layer fees as well as BTC fees
• And the date and time of the transaction

You also get a link to other explorers as seen below.

Each Omni Layer transaction can be identified on the Omni Layer Blockchain explorer by the prefix and suffix of the hash produced.

As you can see in the image above, the transaction in the example has produced a hash with the prefix “6F6D6E69” representing the identity for an Omni Layer Transaction. 

In the middle of the hash is the figure “1F” indicating that this is a Tether USD transaction, and the suffix of the hash can be decoded to reveal the amount being transferred. You can view the hash of the transaction by clicking on the “Raw Data” button on the Omni Layer blockchain explorer.

Benefits of the Omni Layer 

The Omni Layer has been around for quite some time and features several important use cases on the bitcoin network.

Even though Tether USD has since advanced to enable availability on other blockchain protocols such as Ethereum, Omni Layer provided a foundation for the stablecoin even before the advent of Ethereum. Overall, the Omni Layer provided the crypto industry with the first platform for creating alt-coins.

The protocol also serves to facilitate ICOs (initial coin offerings), which have been known to provide easy access to crowdsourced funding for various crypto and blockchain-related projects. With the Omni Layer protocol, anyone can create a digital asset on the Bitcoin network to represent debt, company stock, or any other tokenized product or service. 

Now that the Omni Layer is capable of hosting NFTs as well as regular tokens, users of the protocol can create non-fungible digital assets in the form of digital art, tickets, and other collectibles. These NFTs can be created with fixed supply as well as with a degree of rarity.

The Omni Layer can also be useful for enabling verifiable and auditable voting where several digital tokens are minted on the Omni Layer for voting. The votes can be delegated to each candidate, and the winner is determined by the total amount of votes delegated. This produces a fair and easily verifiable voting process as everything remains public on the blockchain.

Another amazing useful feature of the Omni Layer protocol is its capacity to enable controlled access to tokens. The Omni Layer is designed such that tokens can be programmed to undermine access to a system. For example, a gaming platform can be created with certain limitations meaning those who own those tokens are restricted from playing the game at certain levels. This feature can also be used to restrict access to certain sections of a member’s only website or online forum.

Omni Layer Advancing Bitcoin

Bitcoin pioneered the crypto movement with the promise of enabling decentralized access to financial products and services. Now, without a central bank, people from all walks of life can exchange value on a completely peer-to-peer level. However, as the Bitcoin network grows increasingly popular, congestion and reduced network capabilities are inevitable. 

The Omni Layer is built to support Bitcoin’s advancement past inherent limitations, thus enabling the creation and trade of multiple types of digital assets on Bitcoin’s network. The Omni Layer comes with a trustless decentralized exchange, and through the OMNI token, users across the world can trade while spending near-zero transactional costs.