Not a day goes by without some interesting developments in the world of cryptocurrency. While most of these changes go by unnoticed, the Omni team added a compelling feature a few days ago. More specifically, they have allowed issuers of centrally managed tokens to freeze said tokens in an address. This has caused some unrest among people who are concerned with the current Tether situation.
New Omni Feature Could be Problematic
On one hand, it is good to see the Omni developers introduce this feature. All tokens issued on top of this protocol are centrally managed in one way or another. As such, it makes sense to give such entities an option to freeze funds in specific wallets if something goes awry, as this allows them to prevent illicit activity or theft. It is what banks would do as well, as they remain in full control over customer funds at all times.
At the same time, no one can deny this creates a very troublesome precedent for any currency issued on top of the Omni Layer. More specifically, if a company wanted to freeze assets for whatever reason, it could do so. Given the current Tether situation, people are concerned about the company potentially freezing all its tokens without giving people the opportunity to convert them to US dollars.
Such a development seems highly unlikely at this point in time, for obvious reasons. There is no reason for Tether or any other central issuer using the Omni Layer to take such a drastic course of action right now. While the option to freeze tokens could bring out the worst in some people, it is highly doubtful anyone would be so dishonest as to use this tool for their own gain.
It is also important to note that this feature is not available to anyone who hosted a crowdsale using tokens issued on top of the Omni Layer. Any ICO project which has already issued tokens to investors will not be able to freeze its funds at a later stage. That only makes sense, as doing so would create a very problematic scenario. Moreover, tokens issued via a fixed amount cannot be frozen either, which is another positive development.
There’s also a delay between enabling freezing and actually freezing a specified address. Central issuers must wait at least 4,096 blocks before they can undertake any specific action in this regard. This seems to indicate not all central issuers will activate the freezing option themselves, although it remains a bit unclear whether or not this is an opt-in feature at this stage. Still, it is an interesting addition to the overall Omni toolkit.
The big question is whether or not anyone will use this feature moving forward. Although it is good to have multiple options at one’s disposal, there may not necessarily be a need for the freezing of a specific address. In any case, the Omni team wishes to prepare for the worst, which can only be considered a smart approach. An interesting future lies ahead for anyone using this platform; that much is evident.