Genesis Block Ventures, the investment arm of the Hong Kong-based OTC trading company Genesis Block, has acquired the layer-2 scaling solution for Ethereum – OMG Network.
The OMG token reacted positively to the news with an immediate double-digit price surge.
Formerly known as OmiseGo, OMG Network facilitates transactions on the Ethereum blockchain by handling them off-chain, thus operating as a trustless, non-custodial layer-2 scaling solution.
Earlier today, GBV announced that OMG Network had become the company’s “first major acquisition.” The firm describes itself as an “investment company with a mission of building the future through blockchain that has built a wide-reaching, vibrant blockchain ecosystem.”
The venture firm plans to leverage OMG Network’s blockchain to enhance its accelerated growth and further increase the adoption in Asia and beyond.
The statement also highlighted GBV’s active role in the DeFi craze during this year. However, the company also admitted several challenges in the field, which OMG Network could assist in resolving.
“GBV foresees the main headwind to the development of DeFi, is that Plasma is not EVM compatible, which makes the adoption of DeFi more challenging.
As a leading layer-2 scaling solution for Ethereum, OMG Network supports the transfer of ETH and ERC-20 tokens with a throughput of thousands of transactions per second, scaling Ethereum and making it enterprise-ready.”
Consequently, the two organizations plan to leverage each other’s resources to build lending and trading platforms and enhance DeFi’s mass adoption. GBV will also “ensure the smooth transition of OMG Network’s team and business from SYNQA to GBV, minimizing the impact of the acquisition on OMG Network’s token price.”
Despite GBV’s efforts to reduce any sharp price effects, the OMG token reacted in a highly-volatile manner.
OMG surged by 20% just minutes after the announcement went live. As a result, the asset marked a daily high of $4.42, which was also the highest level since November 26th.
However, as the aftermath of the acquisition calmed, so did the price. As of writing these lines, OMG has retraced back to $3.8.
This article was first Published on: Dec 4, 2020.