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It is a common and very popular saying that states that “data is the new oil.” According to this, everything and anything that you as the user do on the internet can be capitalized on by someone. Unless you are aware of what you do online.
Ontology, our featured project today, is one with the aim of providing privacy and data handling back to the hands of the users. The main aim of Ontology is to make sure that the identity of the users on the internet is solely and safely in their hands. But the project is aiming to do much more.
Ontology (ONT) is a blockchain with the aim of not only delivering high speed and low transaction costs to the public, but also bringing the decentralized identity and data solutions to the users of Web3. The project envisions a future in which the identity of the users is protected through encryption and where both on and off-chain data are secured safely.
Ontology is described as a high performance, open-source blockchain that specializes in digital identity and data. It has a robust infrastructure that is supporting cross-chain collaboration and scalability of different layer-2 solutions. Through this, it aims to offer the flexibility of design mostly to the businesses and enterprises.
Ontology also aims to increase privacy, transparency and trust so that the users of the project do not have to rely on any third, centralized parties. It also allows their users as well as enterprises to build blockchain-based solutions according to their own needs.
For instance, the developers are encouraged to write Ontology smart contracts in the programming language of their choice. Amongst other languages, these also include the likes of Python or C#. The smart contracts built on top of Ontology are defined by high performance, great scalability and include different sets of features such as cross-virtual machines.
Ontology uses a consensus mechanism known as Verifiable Byzantine Fault Tolerance (VBFT). This protocol is a mix of different consensus mechanism standards such as the Proof-of-Stake (PoS) protocol, Byzantine Fault Tolerance algorithm and the Verifiable Random Function.
Without the need to go too much into technical details, here is how VBFT works. At the time of the consensus round, the system selects several nodes solely based on Verifiable Random Function. This is followed by the execution of the consensus process, which has different rounds of proposal, verification and confirmation. This is to minimize the chance of malicious attack.
When it comes to technology, Ontology has also created a so-called Ontology’s Ethereum Virtual Machine, which makes sure that the protocol is fully and frictionlessly compatible with Ethereum. Ontology also plans to create a Multi-Virtual Machine, which would allow for further interoperability for its native mainchain.
The ecosystem around Ontology (ONT) is mostly connected to 4 different projects. These are ONT ID, ONTO Wallet, Wing Finance and SAGA. Each of them has different purposes, but all are inherent to the mission that Ontology is trying to accomplish.
The first one is ONT ID, which is a decentralized identity framework, and is mostly based on W3C recommendations. These are connected to decentralized identifiers and verifiable credentials. Their aim is to connect people, data or services. Additionally, it allows the management of the digital identity by storing it on the phone of the user. This is thanks to the private key that only grants the access to the holder.
Overall, ONT ID thus prevents anyone from hijacking the identity of the user or getting hold on sensitive and personal information. Through ONT ID, Ontology is set to build towards a future where the users are completely in charge and control of who can access, see or use their online data and identity.
Second important part of the Ontology ecosystem is the ONTO Wallet. ONTO Wallet helps with the management of digital identity, data and all the different assets solely in one spot – in the cross-chain wallet. It is thus natively equipped with the ONT ID and is protected thanks to the encryption which again, is only in the hands of the holder. ONTO Wallet thus provides a way how the users can control their digital footprint.
Both of the tokens connected to Ontology, ONT and ONG, which we will discuss more in-depth later, can be stored within ONTO Wallet. It also allows for staking, meaning that the holders of ONT, which decide to stake their tokens, can earn passive income in the form of ONG.
The third crucial part of the ecosystem is Wing Finance. Wing Finance is a cross-chain DeFi lending protocol. It has an integrated reputation score – OScore, which is again enabled by ONT ID. Via Wing Finance the users can access under-collateralized loans thanks to the OScore and their reputation. Since Wing Finance is also a DeFi platform, it also allows for borrowing, insurance or lending, but all of them are based on the reputation.
SAGA is a decentralized data protocol that allows for cross-organization data exchange. It is powered by the Ontology blockchain and the aim of it is to create a data connected ecosystem. The customers and data providers of Ontology blockchain would be able to derive value in three different ways – fair, secure and compliant.
The whole project was created in 2017 by Li Jun as a NEP-5 token built on NEO token standard and blockchain. On 30th June, 2018, the Ontology mainnet was launched and the token was swapped from NEP-5 ONT to the native mainnet ONT and has been running smoothly ever since then.
The project was developed and has been supported ever since its inception by Onchain. Onchain is a company that was also behind the development of NEO, which was for a long time in the past regarded as “Chinese Ethereum.”
With its release, Ontology decided not to go for initial coin offering (ICO), which was very popular at that time. Ontology decided to airdrop most of its tokens to the people who were NEO holders or who signed up for their email list. Yet, ONT was also distributed through a private sale via selling of tokens to the private investors of the project.
Most people who received the airdropped tokens received about 1,000 ONT tokens. At ATH of the ONT price, the token was worth about $10 mostly upon announcements of exchange listings. This means that the people who received the airdrop got $10,000 worth of ONT for free.
The tokenomics of Ontology is a bit more complex than in most cases in the cryptocurrency world as it is a dual-token system. It has thus two different native tokens, Ontology (ONT) and Ontology Gas Network (ONG).
The token supply of ONT is 1,000,000,000 ONT. About 87% of the whole token supply is already in circulation. Most of the ONT tokens were unlocked slowly in the two-year period, which ended at the end of October 2020.
At the time of the airdrop and launch, the token was distributed as follows:
Both tokens are helping the project to work with rapid, high-volume, low cost and scalable transactions. They are both essential to the project, but serve different purposes. The main token, ONT, serves as transfer of value across the network as well as the storage of value.
ONT can also be staked, which means that the stakers can earn ONG as rewards. This also allows the stakers to vote or create improvement proposals or anything related to the governance of the project. It is also interesting to note that ONT is not divisible. This means that it cannot be split, for instance, to half ONT.
The second token, Ontology Gas Token (ONG), was launched when Ontology mainnet came into life. It was created as a reward system for the users since they are allocated and distributed as transaction fees in the form of ONG. The same applies to users who contribute to the platform’s operation overall. A good example would be a deployment of the smart contracts, which also uses ONG in the process. The system thus rewards and encourages those users, who are active within the network.
Ontology is a rather different project from traditional cryptocurrencies. It has a dual-token system, its main goal is the self-sovereignty of its users and their digital identity. It is also trying to make sure that it is as interoperable as possible thanks to different cross-chain bridges. Without any doubt it has great aims and goals, which it has been building towards in the past few years. And as of now, it seems to be doing relatively well in achieving them.
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