UMA

Uma is a fast, flexible, and secure way to create decentralized financial products.

What is UMA?

  • UMA, or Universal Market Access, is a protocol for the creation of synthetic assets based on the Ethereum (ETH) blockchain. UMA was launched in December 2018.
  • Synthetic assets are a class of assets that represent different, underlying assets and have the same value. UMA specifically enables its users to design and create self-executing, self-enforcing financial contracts secured by economic incentives and run them on Ethereum’s blockchain.
  • In essence, UMA allows counterparties to digitize and automate any real-world financial derivatives, such as futures, contracts for differences (CFDs) or total return swaps. It also enables the creation of self-fulfilling derivative contracts based on digital assets, like other cryptocurrencies.
  • UMA runs on top of Ethereum’s blockchain and as a consequence, they are protected by the same proof-of-work hash function Ethash.

Key Metrics

TickerUMA
Token NameUMA
Token Type/ProtocolUniversal Market Access protocol
Total Token Supply101,172,570 UMA
Current Circulating Supply See Coinmarketcap
Market CapitalisationSee Coinmarketcap
Token Creation DateDecember 2018
Can it be mined?Yes

Who is behind UMA?

UMA was co-founded by Hart Lambur and Allison Lu, who met on the Goldman Sachs trading floor.

In 2005, Lambur graduated from Columbia University with a computer science degree. In addition to co-founding UMA, he is also the CEO and co-founder of Risk Labs, the company in charge of developing the Universal Market Access protocol. Allison Lu has received a degree in Economics and Management from the Massachusetts Institute of Technology.

What is the purpose of UMA?

The main idea behind Universal Market Access is reflected in its name: by developing a protocol for the creation of synthetic assets and financial contracts on the blockchain, it seeks to democratize and decentralize the financial derivatives market.

Insights:

Uma has 5 products

  • Optimistic Oracle: UMA’s Optimistic Oracle allows contracts to quickly request and receive price information. The Optimistic Oracle acts as a generalized escalation game between contracts that initiate a price request and UMA’s dispute resolution system known as the Data Verification Mechanism (DVM).
  • Long Short Pair (LSP): the UMA Long Short Pair (LSP) contract template allows for the creation of unliquidated capped-payout financial contracts.
  • Call option: a call option is a building block for the derivatives market. It gives buyers the right but not the obligation to buy the asset at a specific price (strike) at a specific time.
  • Range tokens: the range token enables a DAO or nascent project to use its native token as collateral to borrow funds. At maturity, if the debt is not paid, the range token holder is instead compensated with an equivalent amount of the collateral (the native token) using the settlement price of the native token to determine the number of tokens. A range token can be viewed similarly to convertible debt. In the venture capital world, convertible debt allows startup companies to receive funding today without issuing equity upfront.
  • KPI options: Key Performance Indicator (KPI) options are synthetic tokens that will pay out more rewards if a project’s KPI reaches predetermined targets before a given expiry date. Every KPI option holder has an incentive to improve that KPI because its option will be worth more. This is intended to align individual token holder interests with the collective interests of the protocol. Using UMA’s Long Short Pair (LSP) contract template and Optimistic Oracle, any projects can create their own KPI Option tokens. These can be backed by any approved ERC-20 token and can be valued against any KPI that a project wants to improve

Risks:

  • The greatest advantage of Ethereum’s smart contract system (publicly verifiable, and open-source) can also be its greatest weakness in certain cases. If a bad actor finds a way to exploit a smart contract, it can put all the funds involved at risk.
  • DeFi markets move fast. If you don’t keep up with the market (and even if you do), price volatility can put your investments at risk. This can be compounded by over-collateralisation.

News and Updates:

  • UMA launched its range token product in June, as a solution to the issue of treasury management. The range token is a new financial primitive which allows DAOs to raise funds by borrowing against their treasury without risk of liquidation while giving investors both a guaranteed yield and the opportunity of upside.
  • To allow more visibility of the range of products built on UMA,  the team has created UMAverse, which lists products built on the UMA protocol financial contract infrastructure together with their key metrics. Each product has its own page with detailed information and allows users to mint tokens, manage their positions and trade the tokens directly from the interface.

Community & Whitepaper Links:

Disclaimer: 
All investment is speculative and involves substantial risk and uncertainty. Investors should understand the nature of digital assets including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.  

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