Back with another #FreeLoveFriday. My first thread focused on what I love about Bitcoin, and features we borrowed for @AvalancheAVAX. Today, let's focus on @Omni_Layer, or as OGs knew it, Mastercoin https://twitter.com/el33th4xor/status/1347607322722512897?s=20

Let’s wind back the clock to early 2010s. Bitcoin is just getting started. Deep techies and cryptography people are hearing whispers, reading Satoshi’s whitepaper, and many are getting hooked on the idea that money can be decentralized.

But why stop at money?

In January 2012, J.R. Willett publishes “The Second Bitcoin Whitepaper v0.5”, which laid the foundation for what has always been the absolute killer app for blockchains: digital asset issuance https://sites.google.com/site/2ndbtcwpaper/

By July 2013, Mastercoin was ready to launch & well-funded after pioneering the first Initial Coin Offering. It would enable new assets, currencies, and smart contracts to be created on-top of the #Bitcoin blockchain, without requiring any network changes.

Suddenly, there was a wealth of opportunities to expand the utility of Bitcoin. Enter @Tether_to, the world’s first stablecoin in Oct 2014 and a cornerstone of the crypto markets since.

Omni/Mastercoin had the innovative idea to layer its transactions onto Bitcoin, not using slivers of btc like colored coins, but by encoding them as legitimate transactions whose free fields carry the Omni Layer information.

Omni even built a primitive DEX on top, though no one really used it save for some really low ball offers to match against offers people send by mistake. Still, it was one of the first DEXes out there.

Of course, even if the Omni DEX worked, BTC has such high confirmation latency that front-running would have been really easy.

These are problems we see today in ETH's DEX's as well: https://medium.com/hackernoon/front-running-bancor-in-150-lines-of-python-with-ethereum-api-d5e2bfd0d798

Ultimately, Omni became hard to use because it's encoding scheme took a lot of space and cost a lot in fees.

While the limitations of Bitcoin’s speed and fees held Mastercoin/Omni back from massive success, that team deserves an immense amount of credit for the foresight and vision in creating the first digital assets free from a central authority.

One of the main things we at @AvalancheAVAX learned from Omni is the killer application for blockchains. Namely, digital assets are the killer app. Money is just one of these assets, but there are many others.

Without the Omni team's innovations, crypto would not be where it is today.