Note: This is not investment advice and should not ever be taken as if it is any kind of investment advice. These are my personal thoughts, opinions, and findings. Nothing more.

In the world of cryptoassets exists an abundance of overvalued tokens fighting to be #1 on the leader board. Premiums are being handed out to those offering the most “scalable solution”, yet little attention given to those with greatest likelihood of mass adoption. As history has shown, the “better” tech doesn’t always come out on top. While there is undoubtedly a plethora of tokens overly hyped and lacking originality, there are diamonds in the rough. For reasons I discuss below, OmiseGO appears to me as a token capable of having a huge societal and economic impact, while also being incredibly well positioned to surprise investors in 2018.

In this report I provide everything you need to know about OmiseGO, what’s to like about it, and how I came up with a price target of $74.25 for 2018. Enjoy.

Table of Contents:

I. What is OmiseGO (OMG)?

II. The Problem

III. OmiseGO, The Solution

IV. What’s In It For Omise?

V. Partnerships, Investors, & Acquisitions

VI. The Management Team & Advisers

VII. The RoadMap

VIII. What’s To Like About OMG?

1. The Opportunities

2. An Inevitable Societal Shift

3. The Decentralized Exchange

4. Tokenomics

5. The Very First Plasma Project

6. The Team Behind The Show

7. Regulatory Positioning

8. Lack of Competitors Legal

9. Risks, Concerns, & Questions for Management

IX. Valuation, Price-to-Hype, Recent Moves

X. Concluding Remarks

I. What is OmiseGO (OMG)?

OmiseGO is a subsidiary of Omise, a Thailand based payment gateway service for merchants and enterprise businesses. OmiseGO is on the forefront of providing those in Asia, particularly Southeast Asia, greater financial inclusion and a more efficient digital payments offering. OmiseGO plans to offer businesses and users a mobile eWallet (electronic wallet) that will run on the OmiseGO decentralized exchange (DEX) by way of blockchain technology. OmiseGO is designed to run both on and alongside the Ethereum network to provide users payments, remittances, payroll deposit, B2B commerce, supply chain finance, loyalty programs, asset management & trading, and other on-demand services in a completely decentralized and inexpensive way.

OmiseGO completed their initial coin offering (ICO) on July 5th, 2017, with $25 million in proceeds raised. Approximately 65.1% of total tokens were distributed to participating investors. An additional 5% of supply was distributed to those holding more than 0.1 Ether via an “airdrop” on September 24th, 2017. More than 460,000 accounts received airdropped tokens in proportion to their ownership of total outstanding Ether. Source code & additional details can be found here.

Learn More & Stay Up To Date

Omise — www.omise.co/

OmiseGO — https://omisego.network/

Facebook — View on Facebook

LinkedIn — View on LinkedIn

Twitter — View on Twitter

Contact Email — contact@omise.co

EtherScan.io — View on EtherScan

GitHub — View Here

II. The Problem

Billions around the world lack access to traditional banking, in Southeast Asia that number is approximately 483M, or 73% of its population. While bank accounts are few and far between, nearly everyone has a phone. Services exist, typically at convenience stores, where mobile users can load money onto an eWallet for spending. The downfall to this is that in order for users to spend with their eWallet, a merchant must support said wallet. Not ideal for consumers or businesses.

It is incredibly cumbersome to transact across different payment service providers, for example sending money from WeChat to Alipay. There exists a long-tail of entities wishing to provide eWallet services, which requires greater coordination among multilateral participants. Allowing users to exchange value across networks would yield greater network usability, a win-win for all.

A woman selling water by way of QR code

Costs and Trust Required of Payment Service Providers (PSPs) — When transacting with another network IS possible, a clearing house acts as a middle-man to handle interchange (SWIFT and ACH for instance). These exchanges often require significant overhead costs, trust with the interchange facility, and will take several days to process. Networks offering services like local/national payments, international payments, credit, equities/asset exchange, and derivatives can control transaction costs via information costs, due diligence, and contractual enforcement between all parties. Transparency & reliability is non-existent and a lot can go wrong. Moreover, merchants who want to accept electronic payments have to deal with the headaches of PSPs; cumbersome documentation to apply, monthly agreements, high transaction fees and a lengthy approval process.

Remittance across Southeast Asia is incredibly common and remains nearly the only means of money transfer back home. But these services cost on average 7% and up to 10%. While fees have grown by 3% over the past six years, remittance has surged 102% over the past 10 years ($63.9B in 2016). MTOs, like Western Union, have maintained high fees through exclusivity agreements with local agents and banks. This has prevented a competitive pricing landscape from forming.

Limitations of Digital Payments — Although cash currently rules broader Asia, there is an ever increasingly shift towards a cashless society. In December of 2015 Thailand cabinet approved the Finance Ministry’s national e-payment master plan to promote electronic payments to one day be a cashless society. Today’s digital wallets are typically limited to payment for taxi services or the purchase of goods and can only be spent with supported merchants.

For instance, while one may be able to purchase Starbucks with their Starbuck’s eWallet, the end user cannot do anything beyond spending at Starbucks. Transferring back to a bank account, or sending to another user, is not supported. As technology continues to connect us more and more, the opportunity and value in transacting with one another domestically and internationally continues to grow.

Access to Banking — According to KPMG, a study in 2016 found that 73% of Southeast Asia lacks access to traditional banking infrastructure like cards, loans, etc. Fiat is used for everything from getting paid to buying groceries. For poor countries, like Cambodia, this number is 95%! Of the 27% with banking access, there is much debate as to whether they’re being offered the best service possible.

Because nearly everyone has a smart phone in Asia, many companies have started building “eWallet” apps where one can walk into a store, give the teller cash, and load it onto a siloed utility wallet app. Although this may sound like a bank account, restrictions and costs associated with spending, sending, or loading cash makes it far from a bank account. Lack of infrastructure and the extensive resources required for eWallet development has also dampened mobile banking innovation.

To give some context, the mobile concentration as a percentage of population is 133% in Southeast Asia, according to Hootsuite. If we make the assumption that there are 1.5 phones for every person, then we get ~569M unique phone users. That implies 88% of the population are unique mobile phones users — a reasonable assumption given the remaining 12% could account for adolescents, physically disable, elderly, and/or those living in severe poverty. An astonishing statistic…

III. OmiseGO, The Solution

OmiseGO is creating an eWallet solution that’ll sit on top of the OMG blockchain. From the eWallet shoppers, merchants, payment service providers, and businesses can connect to the OmiseGO Decentralized Exchange (DEX) to send, buy, sell, or trade fiat currencies, digital assets, and cryptocurrencies. This can all be done without PSPs compromising their own network effect and/or brand. Users can even issue digital currencies backed by fiat, loyalty points, gift cards, documents, data, patents, music, etc. OmiseGO is intrinsically agnostic between fiat, digital assets, and decentralized money. There is minimal online identification, no minimum monthly commitment and low transaction fees. Users can accept payments instantly, and for non-developers accepting payments via social network will be possible. Let’s break it down further…

OmiseGO White Label Wallet SDK — The OmiseGO wallet is a mobile wallet where everything is stored. It is a white label wallet, meaning that while the back-end technology has been created by OmiseGO it can be re-branded and used for FREE. The wallet comes with a SDK (software development kit), a programming framework with pre-defined functions and capabilities that developers can use right away for design, develop, and deployment of eWallets for their customers. OmiseGO is already testing this technology with multinational strategic partners, a promising sign.

Example: Grab, “Ubers biggest competition in Southeast Asia”, offers a wallet that can store funds for their cab service. Users can transfer funds to other users for free, but cannot transfer out to a bank account. If Grab were to connect to the OmiseGO network through the supporting OMG wallet, Grab could deploy tokens that users could then spend, purchase, sell, send, or even trade with others in exchange for native currency or other digital assets (like frequent flyer points).

The OmiseGO wallet is no different than a bank account, except that it can store digital assets with ZERO deposit risk. Because digital wallet licenses are different from banking licenses, eWallet licensors cannot lend out network funds (contrary to a bank). No minimum balances are required and there is no need to worry about what kind of investments your deposits are funding (think 2008 U.S. housing bubble).

OMG Blockchain — A PoS (Proof-of-Stake) consensus blockchain that acts as a decentralized exchange, liquidity provider, clearinghouse, messaging network, and asset-backed gateway. Being decentralized means no central authority and all entries/activity are recorded to the blockchain indefinitely. As previously mentioned, anyone can issue digital assets on the blockchain network. Users can also track past and present transactions, providing especially useful for businesses who want to track exchanging of assets and/or information.

Activity on other blockchains will be interlinked via interchain committed proofs to allow for trading across token/asset classes. The OMG blockchain will validate the activity of participants and activity on other chains. Settlement will take place on OMG and costs of protecting transaction value is externalized to other chains. The OMG ledger holds the general balance of funds per eWallet service (or any user/node) and will be capable of holding funds across many different currencies/digital assets.

OMG Network — While the Omise network already exists as a standalone payment gateway, the network is intended to move to the OmiseGO blockchain for transactional support. Partners of Omise will also move over to the blockchain solution when the time is right, kick starting network adoption and activity right out the gate. Wallet applications will be built on top of the blockchain and all wallet activity will be recorded.

OMG Tokens — An ERC-20 token (deployed on the Ethereum blockchain) designed to provide computation and enforcement of transactions on the OmiseGO blockchain. By owning OMG tokens, one has the right to validate transactions and be rewarded via the transaction processing fee. Fees will be 100% dynamically determined by supply and demand, there is no way for OmiseGO to control the fee structure. The token acts as a bond for its activity on the blockchain and any kind of bad behavior will result in demonetizing/burning of the user’s staked tokens. The incentive to approve transactions truthfully makes for a cohesive and secure network.

A Few Problems Solved By OmiseGO:

▪ The ability to transact with merchants, businesses, and users on different networks

▪ Sending, trading, buying, and selling fiat currencies or digital assets domestically and internationally in an efficient and affordable manner

▪ Storing fiat or decentralized assets securely

▪ Creation and deployment of loyalty points, digital currency, and/or digital assets

▪ Consumers are protected from their data being used

▪ Easily developing & deploying eWallets with the ability to enhance, add, and customize payment solutions for various industries and market verticals

▪ Greater liquidity for payment channels using other cryptocurrencies

▪ Ledger tracking of asset transfer across organizations

▪ Fraud, theft, and manipulation when sending, receiving, and storing fiat currencies and digital assets

▪ An ecosystem with no centralized entity in control or at risk

IV. What’s In It for Omise?

While Omise is the creator and main contributor of the OmiseGO project, it is not a protocol centrally owned by Omise. Just like other blockchain projects, no one holds central ownership. So you may then ask, “what’s in it for Omise?” Once the blockchain has been deployed, Omise will move their existing payment gateway service over. The added efficiency and lower cost of running the existing payment network on the blockchain will be beneficial to Omise’s core business. That said, interests are aligned — what’s good for OmiseGO is good for its users, and great for Omise.

V. Partnerships, Investors, & Acquisitions

Like any other business, relationships matter. Omise’s payment gateway service already supports more than 500 merchants in Southeast Asia and new partnership discussions seem to be ongoing. Here are a few of the partners, investors, and acquisitions of Omise/OmiseGO:

A few merchants that use the Omise payment gateway service

Credit Saison

In October 2017 Credit Saison and Omise agreed to partner together to focus on servicing tuition payments for university students through credit cards, marking the start of a potentially promising relationship. Credit Saison is a Japanese based affiliate of the bank holding behemoth, Mizuho Financial Group, and holds more than $24B in assets. Credit Saison has more than 20 million credit card holders and is the 3rd largest credit card issuer in the country.

Mizuho Financial Group

A financial conglomerate based in Japan and a partner of OmiseGO. Mizuho offers an array of services within retail & corporate banking. They’re considered to be one of three Japanese “megabanks”, alongside MUFG and Sumitomo Mitsui Financial Group, with more than $1.7T in total assets (13th largest in the globe). The bank recently announced plans to issue “J-Coin”, a digital currency designed to offer lower processing fees paid by merchants than already offered by credit cards. The coin will be pegged to the Yen and will also allow for faster transfer of money through a mobile device. There is speculation that at some point down the road Mizuho will have J-Coin distributed over OmiseGO.

Donnie Harinsut (COO — left) and Jun Hasegawa (CEO — right of Donnie) of Omise with Thailand McDonalds

McDonald’s Thailand

On Sept. 25th, 2017, it was announced by Omise that McDonald’s Thailand picked Omise to be their exclusive payments gateway for the McDonald’s Thailand website and McDelivery Thailand mobile app. We can assume McDonalds Thailand will be one among the many merchants that will move over to OmiseGO with the Omise Network. More importantly, backing by a well known worldwide brand makes for incredible brand recognition for Omise and OmiseGO.

TrueMoney - A private fintech company based in Thailand and provides e-payment services in Southeast Asia. TrueMoney is a partner and shareholder of Omise, leveraging the companies transacting capabilities and participating in collaboration efforts. TrueMoney is currently owned by Ascend group, whom recently received an investment from Ant Financial (owned under Alibaba). Services offered includes TrueMoney Wallet, WeCard with MasterCard, TrueMoney Cash Card, Kiosk, Express, Payment Gateway and Remittance. They’re also known for their extensive support of 9000+ 7’Eleven branches in Thailand. Both Google and Alipay are partnered payment platforms of TrueMoney.

PaysBuy — Acquired by Omise in July 2017 to capture payment processing market share in Thailand. PaysBuy is one of the 3 largest payment service providers in Thailand. The purchase allowed for Omise to capture access to tier-one enterprises with a strong footprint in target industries (telcos, insurance, hospital, travel, and e-retail). Additionally, PaysBuy will help kick-start the adoption of OmiseGO’s decentralized wallet solution given the existing user base and brand loyalty.

Bank of Ayudhya (Krungsri) — In September of 2017 Omise received an undisclosed investment from the Thai bank Krungsri (Bank of Ayudhya). What’s worth noting here is that Krungsri is apart of the much larger Mitsubishi UFJ Financial Group (MUFG), valued at around $19B and spread across 50 countries. MUFG is known for having conducted several crypto trials, including the use of blockchain technology and creation of its own digital token, and are a member of the Enterprise Ethereum Alliance. I believe there is a possibility of more going on behind the scenes here…

Sumitomo Mitsui Banking Corp (SMBC) — A Japanese multinational banking and financial services company headquartered in Tokyo. The bank offers services ranging from trade financing, cash management services, yen clearing, and custody & securities services. SMBC’s investment in OmiseGO reflects the banks broader interest in exposure and experimentation with blockchain technology. SMBC’s prior testing of Cross-Border Trade Operations using Hyperledger is a great example.

Sinar Mas Digital Ventures (SMDV)- A tech-focused Venture Capital firm that partners with entrepreneurs building exceptional technology companies aimed at positively impacting the Indonesia region. SMDV does such by providing venture investments, strategic network, and mentorship. Headquarters are in Jakarta, Indonesia.

GreyLock Partners — An early stage, late stage, and seed venture capital firm focused on investing in disruptive, marketing-transforming consumer and enterprise software companies. GreyLock currently has committed capital of over $3.5B under management and an investor of OmiseGo. GreyLock is based out of Menlo Park, CA. Past investments include Airbnb, Coinbase, Facebook, Instagram, LinkedIn, Pandora, and Tumblr. If you’re unfamiliar with GreyLock, take a moment to conduct a Google search. Although not an investor of OmiseGO officially, there is what appears to be a meaningful and potentially prosperous relationship in the works.

Central Bank of Thailand —

On August 15th, 2017, the OmiseGO team and Vitalik Buterin (co-creator of Ethereum) met with the Central Bank of Thailand to discuss the future of the Thai economy and more. In the same month of August, the Ministry of Finance announced a test pilot of Omise’s “FacePay” mobile face scan technology for cafeteria purchases. The Omise FacePay technology allows for rapid identification of users to conduct seamless retail transactions. Although it is too early to say what may come of the relationship with the government of Thailand, we do know a healthy one exists.

VI. The Management Team & Advisers

Jun Hasegawa (CEO/Founder)

Founder & CEO of Omise Co since May 2013. Currently leads an international team of engineers and business personnel across Asia. Jun is gearing up for the company’s expansion into Indonesia, Singapore and Malaysia

CEO/Co-Founder of LIFEmee Inc. from Sept 2008 — April 2013. LIFEmee was a tool to help manage one’s daily health condition, assets, life history and even help them prepare their own will

Director — Alpha-do Inc from 1999 to June 2015

16+ years of experience in web & product design, marketing, and possesses a deep understanding of Thailand payment market. With a remarkable vision, Jun looks to expand Omise beyond its existing borders to countries across Asia Pacific

Has worked on various ventures with Co-Founder Don Harinsut for 15 years

Former professional skateboarder, Element Skateboards

LinkedIn & Twitter

Donnie Harinsut (COO / Co-Founder)

COO/Co-Founder of Omise Co. since June 2013. Among many others, Donnie has assisted with growth and international expansion in Japan, Indonesia, Malaysia and Singapore

International Trading Managers at Alpha-do Inc from Jan 2000 — May 2013

Over the course of his career, Don has been involved in 2 large projects with NTT, Japan’s leading telecommunications firm, administering production in China, Thailand and Vietnam

Graduated from Bangkok University International College in 2002 with a Bachelor’s Degree in Business Management, Marketing, and Related Support Services

LinkedIn & Twitter

Wendell Davis (Product Design)

OmiseGo Product Designer

Special Adviser to Golem Network

Ethereum founding team member

Some of his past endeavors include Hive, one of the earliest easy-to-use Bitcoin wallets, Vizor, an open source WebVR development platform, Splice, an online musicmaking/mashup community, and Kitchensurfing, which connected mobile chefs with buyers of their trade

Thomas Greco (Special Adviser)

Adviser to the Interchain Foundation developing Cosmos Network, the Web3 Foundation developing Polkadot

Past adviser to the Ethereum Foundation

Proponent of cryptoeconomics and cryptosocioeconomics

Vansa Chatikavanij (Managing Director)

Responsible for ensuring efficient project delivery, establishment and realization of the long-term business strategy, business development and partnerships

Co-Founder & Board Member of Sky Visual Imaging Venture since 2015. Sky Visual Imaging is a Thai-based precision agriculture and UAV image processing start-up. Vansa’s roles include supporting initial stage fundraising, co-leading business development, partnership on-boarding, contract structuring which resulted in 3 long-term contracts in the cassava and sugar cane industry. She worked with partners to design and carry out feasibility assessment to pilot expansion of agriculture-tech solutions including mobile information services and eMarketplace

Water Resources Specialist at World Bank Group from 2011–2016. Vansa led teams to roll-out international development programs worth over US $1 billion across finance inclusion, infrastructure investments, and environmental and social development areas

from 2011–2016. Vansa led teams to roll-out international development programs worth over US $1 billion across finance inclusion, infrastructure investments, and environmental and social development areas International experience extends South and East Asia, 24 emerging markets including Bangladesh, Cambodia, India, the Maldives, Lao PDR, Myanmar, Pakistan and Vietnam

Remains an adviser to the World Bank Group , Loxley Public Company Ltd., and Sky Visual Imaging Venture

, Loxley Public Company Ltd., and Sky Visual Imaging Venture Researcher at Marine Biological Laboratory from 2008–2010

Received a Master’s Degree in Rural Development, Infrastructure, Renewable Resources at Columbia University in 2011

Received a Bachelor of Arts in Geographic Information Systems (GIS) at Middle Burry College in 2008

LinkedIn

Advisers

Although OmiseGO’s board of advisers consists of highly adept crypto/blockchain individuals, the 3 most notable are Vitalik Buterin (Founder of Ethereum), Joseph Poon (Coauthor of Bitcoin’s Lightning Network and Coauthor of Plasma Network), and Roger Ver (CEO of Bitcoin.com and BTC early adopter). The long list of creditable individuals backing the OmiseGO project speaks to the shared belief in the project’s direction. Support from leaders in the space ultimately translates to greater project awareness, as can be seen from Vitalik Buterain.