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Disaster called OmiseGo (OMG): lackluster performance, overpromising and underdelivering – epitome for the whole altcoin world

Julian Joseph Lehmann

December 9, 2018

4 comments

During the 2017, OmiseGo was one of the most hyped projects in the crypto world. Their rock solid team, beyond plausible value proposition and high-rollers in their advisory board coalesced OMG into one of the most promising projects in the whole branche.

Then the harsh reality struck – advisers went mute, team proved to be incapable of delivering on their promises and the community divided in the relentless hopium intoxicated believers and harsh, chippy critics.

One of the OMG observers, long-time holder and, judging by his extensive post, a thorough researcher summed up the whole OMG story, from the beginning to this day. Here are excerpts from his long post and you can read it in its entirety here:

“The way this project was announced made me feel like this project was different from any other crypto. Had major backers in the likes of Vitalik, Poon. Aims to provide a solution to real world problems, can drastically change lives. This token is supposed to be a utility token, that will eventually ‘earn’ you fees. This way the token will have an intrinsic value, in contrast to many tokens out there. It all felt like a no brainer buying in, especially compared to other tokens/currencies out there…

The last few months were absolutely brutal. Times like these also make you critically assess your ‘investments’ and evaluate where we stand and where we are heading. Ofcourse, bear markets can clog your mind and reasoning abilities possibly even more so than in bull markets…

We can all come to the conclusion OmiseGO is far from succeeding in their goals laid out in their whitepaper, crowdsale docs and public communications, and I believe now is the time to evaluate and look back all the way to the moment OMG was announced on the 17th of February, 2017 (close to 22 months ago) and announcements, developments plus comms by the team along the way…

I will start at the beginning and use tweets from the official OmiseGO twitter account.

FEBRUARY 2017

https://twitter.com/omise_go/status/832624847314247681 . Announcement of OMG. Notice how this tweet already contains Q4 2017, which immediately provides a sense of ‘this is all around the corner, all we need is a token sale done in Q2’17.

The first few public communications by the OMG team were tweets about tendermint, for example this retweet by the OMG team: https://twitter.com/marekkirejczyk/status/832885686554460160 . PoS research so advanced already!

Then there is this retweet of an article containing an interview with Thomas Greco (who’s role has mysteriously diminished) from the 20th of February 2017. https://www.ibtimes.co.uk/omise-using-ethereum-create-decentralised-inter-asia-m-pesa-1607451?utm_campaign=soficalflowtwitter&utm_source=socialflowtwitter&utm_medium=articles

…

MAY 2017

On the 3rd of May 2017 we have a tweet with Vitalik and Poon sitting at the table with OMGhttps://twitter.com/JUN_Omise/status/859991740282945537 Shortly after that there’s an ethereum meetup with Poon and Thomas Greco https://twitter.com/omise_go/status/862945097108815872 and just a week later we have the actual OMG whitepaper written by Joseph Poon https://twitter.com/omise_go/status/865570171758542848 .

It might be interesting to re-read the crowd sale doc and whitepaper now that we are 18 months further down the road. The crowdsale doc can be found here: https://cdn.omise.co/omg/crowdsaledoc.pdf

I am just going through a few things mentioned in this document.

• “Our technical advisory board includes some of the leading minds in the blockchain space like Vitalik Buterin, the creator of Ethereum, amongst others, are available to us for practical guidance and are actively involved in the project’s development.”

So this document tells us Vitalik and other advisors are actively involved in the project’s development. Interesting. Because here we have Vlad Zamfir, who was listed as an “advisor” on the OMG team website (which unfortunately has been removed due to an idiot making death threats on numerous websites) denying having anything to do with OMG https://twitter.com/VladZamfir/status/972838863038304257 . Weird. OMG trying to rub it off with a witty little joke https://twitter.com/omise_go/status/971480735474360320 . Awkward.

Also I cant really recall Vitalik being that actively involved in the OMG product development other than the fact OMG seems to be relying on sharding to REALLY scale to large amounts of tx/s.

• “The OmiseGO network is intrinsically agnostic between fiat and decentralized money: as far as adoption and use go, the system is constructed so that the best currencies will win.”

This is not true, for now. Only ERC-20’s will be transacted on the OMG network initially. God knows how long its going to take before we actually get to transact fiat, etc and others on the OMG network. A big IF anyway.

• “We have also entered into agreement with several regional and national conglomerates to support implementation of digital wallet solutions for supplychain finance and loyalty programs. During the first phase of our work, we will refine and implement these existing business agreements and relationships, as well as focus on onboarding new partners and clients.”

This is a sensitive issue. Ofcourse, there are NDA’s and details to be kept a secret. However, who knows these agreements are still in place? Mind you, this crowd sale doc is written 18 months ago, and there is not a working product in sight. Missing deadlines is fine, but things move fast and competition is deadly. Large companies invest/opt in on different projects/startups all the time. An agreement or MoU is basically pointless if there is no product.

• “OmiseGO is an open source community project; our team will develop the core network and white-label digital wallet SDK, which will both be made available on GitHub. External pull requests will be properly reviewed and welcome. Thus, third parties can work with us to develop their solutions, either on a readymade OmiseGO platform, or through extensions of our core.”

Great, so its open source. People following the Github might have noticed that even though activity is high, there’s just a handful of people actually contributing.

• Now comes the roadmap stuff: OmiseGO white-label wallet SDK launch Launch wallet SDK with fully functioning wallet-to-wallet money transfer and bill payment, plus integration with debit and credit cards for top-up and cash-out options 17 (e.g. ATMs, over-the counter at OmiseGO partners or merchants), and integration with the Omise payment gateway.

Afaik this is not finished nor functional in daily lives?

A hosted server node is constructed to be compatible with open blockchains (i.e. code will be able to be used for an ETH hosted wallet), and decentralized wallets will replace this for interchange in the 2018 development schedule.

Not delivered.

“We will focus on developing, or applying already-developed, centralized exchange and clearing solutions that are in-line with our end-state vision of fully decentralized on-chain exchange (as opposed to just decentralized fund custody, or merely off-chain decentralized exchange). Further work may be done to develop hosted interchange and clearing and to prepare a system where transaction fees can be paid to token holders for validating interchange. Initially, during the test phase, OmiseGO may run validators which have greater share (but do not receive validation fees); in the final deployment, these will be removed.”

Not delivered.

JUNE 2017

ICO has started and our favourite CEO has now posted a blog post ( https://medium.com/@jun_omise/omise-omisego-the-future-of-payment-9cf8a2fc936 ) in which he states the already tens of thousands of Omise merchants will be beneficial to OmiseGO. In fact these are not tens of thousands but several thousand. We already learned this doesn’t mean anything as the migration to the OMG network will not be seamless.

AUGUST 2017

• The shilling starts. We have numerous tweets of OMG posting pics with Vitalik, the Thai central bank etc.

https://twitter.com/omise_go/status/897469878575128576 https://twitter.com/omise_go/status/897472052457684993https://twitter.com/JUN_Omise/status/898337644022644736

• And of course we have Jun and the OMG twitter retweeting the infamous Palm Beach article over here: https://twitter.com/JUN_Omise/status/898926818278776832
• How about retweeting an article about token price recovery after ‘support from Thai ministry’ https://twitter.com/JUN_Omise/status/898926818278776832 why not?
• Let’s just move on the the strategy update vol.1 by Jun over here: https://medium.com/@jun_omise/omise-omisego-strategy-vol-01-5c7269bb2008

Notice how the cash in/out touch point will be revealed at the end of that year, which is 2017.

“To utilize the OMG network, there is still a need to digitize cash into digital currency. This third layer provides a solution for each cash-in/out. This solution will be revealed at the end of the year.”

To my knowledge there is not a single solution for this revealed so far.

SEPTEMBER 2017

• Interesting retweet from Jae Kwon, about a hard spoon https://twitter.com/jaekwon/status/908580495650197505

OCTOBER 2017

https://twitter.com/omise_go/status/924684261613023233 The release of the community made roadmap that states staking possible in Q2 ’18. Cash in/out details end ’17.

Neither of these milestones were hit or explained.

NOVEMBER 2017

https://twitter.com/omise_go/status/931561527940808704 OMG states they aim to build a DEX to rule them all and have >1B simultaneous users.

DECEMBER 2017

• https://twitter.com/tendermint_team/status/938176906163191810 Someone mentions the Cosmos delay, what will this mean for OMG? No worries says the tendermint team, OMG is still a go. Retweeted by OmiseGO.
• https://blog.omisego.network/omisego-update-fuseki-milestone-and-cash-in-cash-out-details-f2eada1fdc2f Ah! Our update on cash in cash out. Unfortunately, there are zero details in this update. We still know nothing on cash in/out.
• Our main man Jun coming with the fire: https://twitter.com/JUN_Omise/status/945239429693632513 Please HODL your OMG’s, they’re going to deliver a huge win for the crypto community. Watch OMG. Going to be huge! Retweeted by OmiseGO.

JANUARY 2018

• https://twitter.com/omise_go/status/949183811576721408 Plasma coming soon. Not too soon. But soon.
• https://twitter.com/omise_go/status/953938195472826368 First OmiseGO, first of the monthly townhalls. We had 3 or 4. This was 11 months ago.

FEBRUARY 2018

https://twitter.com/JUN_Omise/status/960914431096967169

A post with the goal to release a public DEX and get the SDK in the hands of developers. After all, OmiseGO was not building this DEX and was going to rely on third parties doing so. Again, Jun emphasizes 2018 is going to be a great year for OMG.

https://twitter.com/ReadReed/status/962876842188443648 OMG retweets an article/interview with Jun in which he states he wants to be able to process all of the worlds transactions with Plasma.

MARCH 2018

https://twitter.com/JUN_Omise/status/977123185387651072 Neutrino news released. Global Brain is in on this.

APRIL 2018

https://twitter.com/omise_go/status/980502446156984320 The infamous spoon is announced. Plasma is coming! And according to them, it wont take 7 seasons! We’re in the fourth already though. On the side, staking is now off the table.

https://www.omise.co/omise-and-omisego-sign-mou-with-shinhancard-to-explore-opportunities-for-fintech-and-blockchain-initiatives MoU with ShinHan. Finally something exciting! Only to never hear anything about it again.

https://twitter.com/omise_go/status/987500769883705344 Exciting times ahead! Strategy update v2. The announcement of the acquisition and development of a user-facing crypto exchange.

Literal quote from the article:

“For the purpose of incubating large transaction volume and diversity of tradeable assets for OMG from the get-go, we’ve decided the best route is to hatch Chicken 0x05: Crypto Trading. To this end, Omise will launch a new subsidiary which will aggressively develop a user-facing crypto exchange network this year.” Notice how this quote can be interpreted in 2 ways: either the subsidiary will be launched this year after which development still needs to start, OR this exchange is supposed to launch this year. 8 months after this announcement its all silent.

No exchange, no DEX, no acquired exchanges. Nothing to report on. What I do know is that the go.exchange team is actually still looking to hire and nothing has been built yet.

Then there’s the new roadmap: https://blog.omisego.network/april-tech-progress-update-9022649d2e21 In which releasing Tesuji on GitHub is now considered a milestone. Also notice how AJI is supposed to come out in Q4 with details. There are 3 weeks remaining, I am going to assume this is not going to happen.

After this new roadmap, combined with the spoon thing and diverting from Honte gave me a very unpleasant gut feeling. This was acknowledged by the team in this tweet.

https://twitter.com/omise_go/status/990411228748054529

MAY 2018

Badgers. Also, we had a new updated roadmap flow chart thing. https://blog.omisego.network/omisego-roadmap-update-94819e20ada2

Notice how many milestones in this chart are not hit, how many things are vague and moved to Q4 and beyond. Notice how details are now lacking and notice how all of the sudden there is no more timeline on when this utility token is going to have utility.

MAY, JUNE, JULY, AUGUST 2018

Nothing. We get some tech updates here and there (much appreciated, at least its something), there’s a lot of talks all over the world, public appearances. There’s a workshop here and there. https://twitter.com/omise_go/status/1032831903357980673We get the Tesuji plasma release, which in theory meant it was now on github. No network to play around with.

https://blog.omisego.network/omg-dex-update-6245812a7b2d DEX update. Basically this update sparked some new anger in the community. The DEX is actively being researched, and there are several DEX designs that are still being worked out. Each DEX design have their limitations. Nothing tangible in this update. “We want it to be secure”. Well, yes.

SEPTEMBER AND OCTOBER 2018

Team actively tries to lower expectations. Please do not get excited. No moon. But we have something that’s going to give us a perspective to see the whole earth. It’s a non-blockchain related speaker.

https://blog.omisego.network/state-of-the-omg-ecosystem-75260c71a053 Team stops putting dates to things. Explains the 5 different plasma designs a little. Some progress on the wallet.

NOVEMBER 2018

After 22 months since coming out for the first time, we now have some sort of testnet. It’s something tangible and real this time, which made me feel real good. Game was fun and ran very smooth.

DECEMBER 2018

Team admits a real product coming out in Q3 or Q4 in 2018 is not going to happen. They underestimated the time they needed to get to an external testnet. (Which isn’t even a working product with real world usage, like I asked them 6 months ago here: https://www.reddit.com/r/omise_go/comments/8l26cg/official_question_thread_for_omisego_ama_1/dzclgkq/ Their answer was Q3 2018.)

Now, I will not go ahead and scroll through Jun’s twitter and compare what he said vs where we are now. It’s not worth my time, certainly not more than I already put into this so I’m just going to put it mildly: I do not share his enthusiasm for this project anymore. I’ll just leave this here: https://twitter.com/jun_omise/status/1012203105801269248 Prepare things in discrete way. Sure. I can’t decide whether Jun is simply overenthusiastic, misinformed, ignorant or a liar. I think the guy has good intentions and is probably not a bad person, but this guy lost all credibility and should not be taken serious anymore ever again.

OTHER CONCERNS

• Top plasma researcher David is involved in a new startup called Bitfish, which is tied to F2pool. F2 pool owns millions of OMG tokens and seems to be trading them actively, because their addresses are moving tokens in and out of bitfinex, increasing their stack to over 3.5million now. When being called out on this, all David had to say was “I handle things professionally”. I’m sorry but im not buying that. There are millions of dollars involved and David probably has the best understanding of what OMG does and can do, also he is the prime plasma researcher. This could be one hefty case of insider trading. David is a good guy and I do not doubt his intentions but this just looks so incredibly bad. You’re trying to tell me F2 pool is willing to accumulate millions of tokens without insider knowledge from the prime plasma researcher on OMG’s payroll??? Wake up. I wouldn’t be surprised this would be one of the things an SEC would look into once the space gets regulation it desperately needs.
• Also it is unclear to me how much members this team actually has, who is working on what and who they’re hiring. As a company who raised 25M dollars in public funding, I’d like to know who is working on the product the community has funded. The GitHub is active, but there’s only a handful of people working on it. What also bothers is me is that Kevin Xu was on the team page for a long time even though he left the company some time ago according to his twitter.
• Advisors had their payout of OMG tokens, and have now disappeared? Greco is gone, several others that were on the advisory board were never heard of again or heard of in the first place. Roger Ver anyone????
• To top it all off we get conflicting answers to AMA’s, some backstepping on child chains, release dates and the way merchants are going to be onboarded (“Currently, merchants who use the Omise payment gateway to process debit/credit transactions are plugged into the Omise API’s. The Omise API’s and hence the partnered merchants will be seamlessly integrated with the OMG Network.” = not true.). Tps is like 100 to maybe 400 and fee payouts are done in ETH instead of every currency the staker wishes to accept. This was not what we signed up for.
• Also the name is starting to bother me. Ticker OMG looks childish and will always be related to Omise. The OMG network sounds lame and it doesn’t appear to be as permissionless this way. GoNetwork something would be so much better. Just like Antshares sounded lame, or Raiblocks for that matter, you have to think about a brand. Thats just my personal opinion.
• The way things were handled with tendermint/cosmos was a complete clusterf*ck and looked so incredibly amateuristic I will not waste too many words on that matter. Even though they relied on a third party, this put a huge dent in the faith of many from the community. Not only we dont have an initial network now, it also took them about 6-7 months to figure out it wasn’t coming through and no one seemed responsible for it.

I get it, stuff gets delayed all the time. I don’t care about a delay or two if they get it right. But They’ve also been saying something is coming ‘soon’ since may 2018.

A small list of soons:

https://www.youtube.com/watch?v=IDMoJko4C8A —-> network is coming ‘very shortly’ said in May 2018

https://www.youtube.com/watch?v=EXFdcfBXFdU —> Q3 / Q4 said in June 2018

https://www.youtube.com/watch?v=Vbqk0HYLnwQ&t=111s —> “we are looking to launch by the end of the year” July 2018

These are facts. They are the dog owners pretending to throw the ball.

• Recent events, or lack of them, have shown OMG has greatly overestimated themselves and underestimated what they are trying to build. There are no guarantees they will actually succeed in what they aim to build. The scope of this project already seemed big, it might just be too big. If they struggle to get an initial, basic iteration out like this, wait until things really get complex. Initial iterations will be so basic they are not even close to what the creators and investors have in mind. Staking is way out of sight and the team now refuses to put dates on things. That outlook is depressing.
• The strong rock community they keep bringing up is divided into people that are fed up with all the vagueness and the lack of an actual product, others are blindly hoping for some kind of miracle, others stopped caring and a few peeps like the good ole’ doctor are buying like crazy while prices keep sliding. The sub is losing subscribers, the OMG token has become a meme in a way and everyone you told you invested in OmiseGO starts laughing until they pee their pants. Everyone you told to invest in OMG is not returning your phone calls. We got soonalisa’s, soons, patients, rocks and #nomoons. Reality is: after 22 months we actually have nothing, and our precious utility token will remain to be a token without utility and no one knows when this will change. It’s sad it has come to this point as I have always thought there was something in it for us. How could I not? Scroll through the tweets above or take a look at the stuff Jun puts out. We were all told exciting stuff is around the corner. Exciting stuff for OMG = exciting stuff for OMG holders = utility for its token = Money. I care about MONEY. I don’t care about who you put on a stage at an ethereum meetup.
• The lack of tangible progress is hard to bear and this bleed will not be over until we finally have something, which could take months or years. Even then there are so many if’s. Sure, IF OmiseGO achieves what it intends to do, it will be a monster. IF. Do we still trust they deliver? I havent seen anything that makes me think they will to be honest.
• When is the moment we get to say: when soon? This project is turning out to be the next Golem, Maidsafe or another project thats been working on their product for ages without something ‘real’. We have come to the point the hype has died down, and the only thing that will give this token any value is something that works. We have followed OMG all the way here, and while the team bears no responsibility for our investments, I hope the team knows people like me fell for the picture they painted. And that picture is not what reality looks like and now I’m here holding the bags.
• While all this will come across very negative, people will say this is because of the bear market. This is not a bear market, this is a purge. This is getting rid of the pets.com’s. My frustration with this team is that we were led to believe there would be a product by now. A product that would yield some sort of return. Until that time, OMG will be washed away along with the rest of the complete and utter shitcoins out there.

This will also come across as if I capitulated. I did in a way. I stopped believing every word of members from the team. I will actively call out the team on things they said in the past vs. things they say now. I will take things with huge grains of salt and I will no longer buy any of these tokens until the token gets utility or until there’s decent volume going through the network. I stop engaging in circle jerks over things said by the team like “We don’t just believe it might become the world exchange, we’re slightly worried that it will” or “a 1 billion dollar market cap is potentially insignificant”. Even words said by the main plasma researcher and the managing director who state a release was imminent “pessimistically Q4, optimistically Q3” I will completely ignore. Things like an option menu to an admin panel do NOT excite me. I expect nothing and have considered the money invested in this as a complete loss. Yes, I am still holding all my tokens. But I want a product that works like it’s been ‘sold’ to us. Nothing more, nothing less.

I refuse to give in to the the sunk cost fallacy many others have. There is a very, very good chance this token will never recover because of its lack of utility and the complexity of what they’re trying to achieve. A lot of startups never accomplish anything. In the end, OMG is a subsidiary of Omise. Omise is not dependent on OmiseGO. Never forget that.

I’d like to finish on a positive note. I know the team is working hard, I am not saying they are not doing their job. Also, I believe they are doing their best in keeping us posted on what has been happening. I also like the efforts /u/nebali has put into building the community and his work on the AMA’s. IF OMG delivers I will be the one actively trying to make it succeed. I still am a fierce supporter of this project, and will definitely continue to stick around here but the time of blind faith is over. I am not mad, I am disappointed (my mom always told me that’s worse). Best of luck to the team, I hope you make it happen. I occasionally spit out my coffee when reading the daily memes. Cheers.”