What is Omni Layer?

Omni Layer, formerly known as Mastercoin, is a popular protocol layer built on top of the Bitcoin blockchain. Omni Layer is home to popular tokens such as Tether and MaidSafeCoin. But what is Omni Layer, how does it work, and what is it used for?

In order to answer these questions, we must first understand what Mastercoin is. Mastercoin is considered to be the very first "altcoin" - an alternative to Bitcoin (BTC). The term "master" is actually an acronym of "Metadata Archival by Standard Transaction Embedding Records". The Mastercoin protocol was proposed in "The Second Bitcoin White Paper" published in January 2012 by software engineer J.R. Willett.

In his document, Willet claimed that the existing bitcoin network could be used as a protocol layer, on top of which higher-level protocols could be built. This would enable the creation of new currencies with their own set of rules without altering the foundation protocol or creating an alternate blockchain for the new rules. The whitepaper also explained the motivation behind Mastercoin as a means to increase cryptocurrency adoption by consolidating developer focus on one blockchain.

The Omni Foundation was created to build on the Mastercoin protocol and eventually evolved into the Omni Layer with a rebranding in March 2015. Omni Layer is neither a fork of Bitcoin nor its own network, but rather a meta-layer on top of Bitcoin. It is essentially a software layer built on top of the Bitcoin blockchain that enhances the features of Bitcoin through its own additional characteristics. By providing smart contract capabilities, Omni Layer enables developers to create new customized cryptocurrencies, automate complex financial functions, and expand the Bitcoin network beyond its own currency in a decentralized and transparent way.

What is the Omni token?

The Omni token, also known as OMNI, is the native token of the Omni platform. It is used to pay for transaction fees on the platform and can be traded on various cryptocurrency exchanges. OMNI is also used as collateral for the creation of custom digital assets on the Omni platform.

One of the most popular use cases for the Omni platform is the creation of stablecoins, which are digital assets pegged to the value of a real-world asset such as the US dollar. Tether (USDT), one of the most widely used stablecoins in the cryptocurrency ecosystem, is built on the Omni platform.

How does Omni Layer work?

Omni Layer allows customized logical operations on top of Bitcoin's basic logical operations, by "piggy-backing" on the Bitcoin ledger. It attaches the details of smart contracts and smart properties without altering the foundation layer. Omni Layer also benefits from Bitcoin's hashing power and the security of Bitcoin's Proof of Work consensus mechanism.

What is Omni Layer used for?

Omni Layer is the ideal tool for creating and trading in custom currencies. It also enables blockchain-based crowdfunding, by collecting cryptocurrencies in a secure, trustless, decentralized, and peer-to-peer manner, with no intermediaries. Additionally, it acts as a bridge between altcoins, smart contracts, and smart properties and the Bitcoin blockchain. Omni Layer serves as a crowdsourcing platform, providing the means to necessary funds without the interference of a third party.