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Introduction
Omm is an open money market: a decentralized peer-to-contract money market protocol built on the ICON Network, with a direct fiat on- and off-ramp through the Bridge widget.
Omm’s mission is to lower the friction between traditional banking services and decentralized financial infrastructure, while offering cryptocurrency holders the opportunity to borrow fiat backed assets against their crypto assets.
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 blockchain 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.
The protocol will consist of two primary market participants: Suppliers and Borrowers. Both Suppliers and Borrowers can earn Omm Tokens (OMM) as a reward for the liquidity provided to Omm.
Within each money market, the more assets deposited into the contract and the more assets borrowed will directly lead to more OMM earned by Supplier and/or Borrower. Omm Tokens represent governance ownership in the Omm protocol, and come with several benefits discussed in the Token Economics section of this paper.
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 frictionlessly, without a trusted central party.
Omm’s goal is to bring many assets 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.
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