We propose addressing forex settlement risk and market fragmentation issues (Schrimpf & Sushko, 2019) through Onomy, a decentralized protocol that virtualizes major currencies around the world and provides for near-instantaneous settlement. Recent advances in decentralized protocols and proven implementations of a new class of virtual assets named stablecoins have made this possible.
Onomy consists of three pillars designed to be a self-governed monetary stabilization system.
Onomy Network (ONET): A decentralized peer-to-peer computational network that processes transactions submitted by users and rewards operators in ONET's native protocol coin NOM.
Onomy Reserve (ORES): governs minting of stabilized virtual currencies, called Denoms, utilizing NOM as collateral.
Onomy Exchange (ONEX): a base-layer decentralized exchange that is used by Onomy participants to trade NOM and Denoms. ONEX is integrated with ORES to handle reserve accounts' maintenance and rebalance collateral ratios.