What Is Ontology?

Ontology is a fast, secure, and accessible layer-2 public blockchain offering data privacy and security solutions. It started as an offshoot of NEO, a popular blockchain at the time of Ontology's launch. Ontology’s mainnet launched on June 30, 2018. The project recently celebrated its 4th mainnet anniversary. 

Ontology's self-proclaimed mission is "Bringing trust, privacy, and security to Web3 through decentralized identity and data solutions." Keeping this mission in mind gives us context when considering their core services.

Ontology currently offers six core products, including 

1. ONT ID - A decentralized identifier or DID
2. ONTO Wallet - A web-based cross-chain mobile wallet
3. OScore - A decentralized credit rating system 
4. Wing Finance - A Decentralized Finance (DeFi) service and
5. SAGA - A marketplace for data 

Besides these, Ontology also recently announced the launch of the upcoming OWN or Ontology Web3 Network Infrastructure, which we will discuss briefly.

The most crucial of Ontology's products is ONT ID. DIDs like ONT ID is essentially a pro-data-privacy alternative to handing over your personal data to centralized institutions or Big Tech. ONT ID forms the basis for many of Ontology's other services.

What Is Ontology: Key Points

• Ontology is a fast and secure layer-2 blockchain providing data privacy and security solutions.
• Ontology can handle over 5000 transactions per second.
• It has five core offerings, the most crucial of which is ONT ID, a DID.
• It has over 400 partnerships to date, including those with Ethereum, Polkadot, and Google Cloud.

How Does Ontology Work?

Now that we have briefly covered what it is let’s dive deeper into how Ontology works. 

Here’s how the consensus mechanism and the dual token system which drives the Ontology ecosystem works. 

The Dual-Coin System

Ontology relies on a dual-coin token system - ONT and ONG.  

ONT is the coin that powers the Ontology ecosystem. It acts as the governance token, and users can stake it to earn ONG coins as a reward. We have a dedicated section that covers ONT staking in depth. 

ONG is used to pay gas fees whenever someone transacts on the Ontology chain. It includes gas fees for executing smart contracts and staking your ONT. At the time of writing, each transaction on Ontology costs 0.05 ONG.

The VBFT Consensus System 

Ontology introduced a new kind of consensus mechanism called Verifiable Byzantine Fault Tolerance. This consensus mechanism is a mix of Proof of Stake or PoS, Verifiable Random Function or VRF, and Byzantine Fault Tolerance consensus mechanisms. 

Here is how it works. Nodes – called Trinodes in the Ontology dictionary – first apply for being part of the consensus system by staking their ONT. Users can delegate nodes by staking their ONT in a node. Choosing from a pool of nodes with high stakes voted in by the community introduces a countermeasure against malicious actors and makes the system more decentralized.

The algorithm then randomly picks a fraction of the overall population of applied nodes. Randomly choosing the nodes ensures security for the blockchain in the case of an attack.

Consensus is reached with at least ⅔ of the selected nodes. Choosing a small number of nodes from the pool makes the Ontology blockchain more scalable. 

So overall, the unique VBFT algorithm is designed to be secure, fast, and scalable.

About ONT ID 

The ONT ID is a big part of the Ontology ecosystem. Here is how it works.

Depending on where you live, you first verify your identity how you usually do it, i.e., using national identity cards, passports, etc. This verification process is carried out by Ontology's Trust Anchors, which includes various universities, financial service institutions, and third-party institutions. These Trust Anchors record the verification onto the Ontology blockchain. Note that they do not have access to the underlying data, which should include your confidential documents.

Once your ONT ID is verified, your data is tokenized or put into the blockchain. You will have complete control over this data. No one can access it without your private keys. It prevents anybody from looking into or sharing your data without your permission. 

Getting your ID verified will also give you something akin to a seal of approval. Think of it like this. Whenever you have to verify your ID, you show a certificate saying ONT verifies your ID instead of handing over your confidential information. All projects integrated with Ontology's DDFX storage system would follow this protocol for ID verification.

Where Is ONT Used?

Now that you know a bit about what ONT is, let's talk about ONT's use cases. 

Since ONT is the main coin in the Ontology ecosystem, it serves the common native currency functions like ETH does for Ethereum. These functions include the following.

Governance 

ONT gives its holders governance rights for the Ontology blockchain. The decision-making power of the system is spread throughout the community by ONT.

The more ONT coins you have, the more of a say you have in proposing and approving amendments or upgrades in the blockchain protocol. 

Staking

You can also stake your ONT coins or give them to the Ontology ecosystem. The system uses the coins to regulate itself and, in return, rewards you with ONG coins. You can use these rewards for carrying out transactions on the Ontology blockchain, including in the hundreds of decentralized apps running on Ontology.

Ontology Founders / History

Ontology officially launched in New York on Nov. 27, 2017. Jun Li, Founder and CEO of Ontology, led the event along with speaker Da Hongfei, Founder of NEO. 

Like NEO and Ontology, the two speakers, Jun and Da, also have some history. They were two of the three co-founders of Onchain, the current parent company of both NEO and Ontology. Their companies and Switcheo also announced the launch of Poly Network, a project with a cross-chain interoperability mission similar to Ontology's. 

According to his profile, Jun is a seasoned Blockchain architect and solutions specialist with 17 years of experience in IT and financial technology. During his career, he has worked with international IT firms and financial exchanges. He provided them with technical support for planning, management, and architecture.

In just a few months after its official launch, ONT grew into one of the biggest 25 cryptocurrencies at the time. It was, at least in part, due to the enormous success NEO had around the time Ontology launched.

ONT Tokenomics

ONT (NEP-5) was pre-mined on the NEO blockchain before the Ontology mainnet launch. The total supply of ONT is 1 billion coins. At the time of writing, almost 90% of these coins are in circulation.

On June 30, 2018, when the Ontology mainnet officially launched, NEP-5 ONT token holders could start to swap their coins for the ONT coins on the Ontology blockchain. This process continued until Oct. 1, 2018.

At launch, Ontology pledged 10% of the ONT coins to the NEO Council. 

Another 10% was set aside for the technical community. It was the biggest share for such a community in any public blockchain around the time of Ontology's mainnet launch.

As for the current 12% of total coins for the general community, Ontology started distributing them in two ways.

• Holders of NEO got one ONT coin for every five they held. In March 2018, 20 million ONT coins were dispersed this way.
• Subscribers to ONT's newsletter got up to 1000 ONT.

Ontology also held a private sale. According to an article by Jun, this sale was for specific individuals or entities as a means of strategic partnership.

Therefore, according to the Ontology team, the current distribution of ONT is as follows.

• Ontology Technical Community Reward - 10%
• NEO Council - 10%
• Ontology Community - 12%
• Ontology Core Team - 15%
• Ontology Ecosystem Development - 25%
• Co-Builders (institutional partners) - 28%

How Is ONT Created?

ONT coins are not minted or created anymore. All of the 1 billion coins exist at the time of writing. However, only 90% of this amount is in circulation. It is partly because locked and staked ONT does not count as being 'in circulation.' 

However, the other coin in Ontology's dual-coin system, ONG, is far from reaching maximum supply. Although estimates for the current amount in circulation may vary, there are around 315 million ONG coins in circulation. It is approximately 31.5% of the maximum 1 billion coins capacity. 

ONG is mined every time a block is made. At the time of writing, this means five ONG are mined every second. ONG is distributed as rewards to nodes and stakers. The Ontology Foundation also allocated 10 million ONG coins yearly from 2018-2021 as rewards for the top 49 nodes.

Users can see relevant numbers on the Ontology website, July 2022.

You can also see the approximate locations of Trione nodes in July 2022.

Ontology Competition and How It Fares 

Bloom is similar to Ontology when it comes to its core offerings and its mission. Bloom is an advocate and service provider for DIDs and financial services integrated with such DIDs. Like Ontology, it prefers the self-sovereignty of your personal data over trust-based systems.

Bloom has a working relationship with Bountyx0, a "global cryptocurrency bounty hunting" platform, and Listia, an online non-monetary marketplace for goods. However, Bloom does not have the extensive and influential partnerships that Ontology has. Moreover, ONT's market cap is almost 175x bigger than Bloom's.

On the DID front, Ontology's competition includes Identity. Similar to ONT ID, Identity allows its users' verification attestation. Users can use that proof of identity in applications that work with the Identity protocol.

However, as with Bloom, Identity does not seem to be as influential as Ontology. Ontology has partnerships with some of the biggest names in the industry, like Ethereum, Polkadot, and other major blockchains. Identity only has integration with Solana and just recently integrated with the Civic marketplace.

Ontology Partnerships & Investors

Ontology has a lot of partnerships with influential entities in the cryptocurrency world. 

Some of Ontology's ecosystem partners above.

One of its most recent partnerships was with Celer. It allowed Ontology's Ethereum Virtual Machine to bridge with Ethereum. It opened up many opportunities and cross-chain operability for users and developers. 

It is in line with Ontology's mission of bridging the gap across chains. It also resonates with Ontology's participation in announcing the launch of Poly Network, also a project with the goal of achieving cross-chain operability.

Another of Ontology's recent partnerships is with Daimler AG, the parent company of Mercedes Benz.

What Is Ontology - SWOT Analysis

Strengths

One of Ontology's biggest current strengths is its diversity of decentralized solutions for identity, data, reputation, and scoring management. 

Another one of Ontology's biggest strengths has been its partnership with NEO. As we mentioned above, the founders of both companies have some history. 

NEO also probably played a significant role in Ontology's initial pre-launch boom. This momentum must have helped Ontology from partnerships with industry giants like Ethereum, Polkadot, and other blockchains. 

Weaknesses 

Ontology has strong ties and history with mainly Chinese projects helping the local Government in China. Its team has many Chinese natives, including Jun Li, Ontology's founder and CEO. 

Given the current global political state, projects strongly associated with the Chinese government may be disadvantaged in some parts of the world, like North America and Europe.

Opportunities

Ontology has developed many applications which contribute toward decentralization. It includes its DID, DeFi, and dApp development infrastructure solutions. 

It also has some influential partners in the crypto space. Suppose Ontology can continue to develop and sustain interoperability across multiple chains besides Ethereum and BSC like Solana and Cordano. In that case, it can become a chain that bridges the most popular networks in crypto. 

Threats 

In an interview on July 29, Humpty Calderon, head of community at Ontology, mentioned Ontology's recent collaboration with the Chinese government to track and manage identity information. 

We mentioned how Ontology's Chinese links might hurt it in the current global zeitgeist. Although this may not be as much of a potential threat, it may be a threat nonetheless. Ontology could face politically correct blacklisting from American and European-based institutions or projects. 

Another potential threat could be the relatively small (12%) proportion of governance rights the general Ontology community has. The NEO Council alone has about the same proportion of governance rights as all of the general users combined.

ONT Roadmap

In the same interview mentioned above, the head of the community at Ontology was asked about what lies ahead for Ontology in 2022.

In response, Humpty talked about the growth of Decentralized Autonomous Organizations. According to him, although DAOs are often neither completely decentralized nor autonomous, their presence is growing. Ontology is looking into making tools that would equip DAO developers and communities to better screen who they let in. It could be based on the Orange protocol, a project connected to ONT's OScore and focusing on providing user reputation for services like DeFi.

Ontology Updates, News, and Highlights 

Ontology Web3 Network or OWN Launch

Ontology announced the launch of the OWN infrastructure in June 2022. OWN helps developers build dApps on the Ontology blockchain without starting from scratch. It also lowers the cost and barrier of entry for developers since the products are free to use. 

OWN and ONT ID can help streamline the identification process across different Web 3 platforms. It can also help store copyright and ownership records for digital assets like NFTs and copyright information. And lastly, it can play a crucial part in assisting users in creating virtual identities in the metaverse while maintaining the privacy of their real-world identities.

Milestone Stats

Besides the OWN project, Ontology also gave the community some milestone stats on the fourth anniversary of its mainnet launch like the following. It has over 600 dApps, 100K community members, and over 1.6 million ONT ID users.

Why Is Ontology Important for Web 3? 

The term 'Web 3.0 revolution' has been around quite a bit in the past few years. Why has Web 3.0 become a part of the mainstream conversation suddenly?

It might have something to do with Big Tech's infamous data privacy breach scandals. People started realizing that their personal information may not be safe with any centralized entity. That is why DID and Web 3 projects like Ontology's ONT ID are so important.

In contrast to Web 2, where the internet is basically under the control of a handful of companies, Web 3 is designed to disperse that control over a large community. That is why dApps are gaining traction. Instead of Google, Instagram, and Facebook commercializing your data, people can now use dApps that can identify you without looking at personal data. 

DID databases like ONT's DDFX help streamline the identification process, which can be vital for providing you with financial or other services. 

Besides building projects themselves, Ontology also provides developers with the tools they can use to create their own applications. Ontology's OWN infrastructure is an example of projects that are providing new dApp ideas and building on Ontology. 

If the world wants to move towards Web 3, it needs projects like Ontology, where decentralization is the primary goal.

But decentralization is only one of three problems to solve in the Blockchain Trilemma. Web 3 also needs security and scalability. Ontology is a step towards having all three of these qualities in a blockchain.

Ontology secures your data by tokenizing it and giving you sovereign control over who gets to access it. It can only be analyzed with your private keys.

As for scalability, Ontology's unique VBFT consensus mechanism allows it to process over 5000 transactions per second. Scalability solutions like sharding could help multiply this number manifold.

So, Ontology has an excellent base to become an essential player in the Web 3 space. It provides the infrastructure, data privacy, and potentially even the scalability aspect for Web 3. That is why Ontology and other similar projects are essential for Web 3.

Where To Buy ONT? 

You can easily buy ONT from OKX, a leading cryptocurrency exchange platform. Here are some options you can buy ONT. 

• If you already have cryptocurrency assets, you can swap them for ONT.
• You can trade your USDT for ONT on the spot market.

How To Store ONT?

By storing your ONT on the OKX wallet, you can avoid dealing with multiple wallets to manage your funds. 

OKX has both offline and online storage solutions. Both types of wallets are designed for security despite the apparent edge that offline wallets generally have regarding safety. The online wallet allows you to store assets besides cryptocurrencies like NFTs. You can also access dApps using the wallet.

Alternatively, you could use either one of Ontology's wallets. 

• The OWallet is a desktop wallet. 
• The ONTO wallet is a web and mobile-based wallet with cross-chain operability. It allows you access to the 600+ dApps currently operating on the Ontology blockchain.  

How To Stake ONT

You can stake your ONT coins on OKX with the following returns.

Alternatively, if you have a large amount of ONT to stake, you can also stake it on Ontology nodes and earn ONG rewards directly from Ontology. The returns on staking may vary depending on the node you stake it. You can see potential staking results from Ontology here.

You can also stake your ONT in the web-based ONTO wallet. 

FAQs About ONT 

Is Ontology a Chinese Project? 

Although Ontology's team and partnership have significant Chinese contributions, we can not say it is a Chinese project. Ontology was launched in New York and is, by nature, a decentralized project. Therefore, attributing it to any one geographical region may be pigeon-holing it.

How Does ONT Work in the Ontology Ecosystem?

The ONT coin is the governance coin of the Ontology blockchain. It allows nodes and users to participate in the consensus system in each voting cycle. It also makes the holders eligible to vote on matters concerning updates or modifications to the system protocol.

Is Ontology a Proof of Stake Coin?

Ontology uses VBTF, a unique consensus mechanism. As mentioned above, this unique consensus protocol is a mixture of three different protocols, including PoS. 

But even though proof of stake lends the VBFT mechanism some of its properties, VBFT is more sophisticated than simple PoS.

Can You Store ONT on Metamask? 

At the time of writing, no, you can not store either ONT or ONG on Metamask. You can safely store ONT on OKX or any other popular private wallet.