What is UMA?
The UMA token is a governance token native to the Universal Market Access (UMA) platform. The latter is a completely decentralized financial contracts platform.
UMA is based on the ERC-20 token standard and it’s deployed on the Ethereum blockchain.
This governance token allows holders to cast their vote on proposals related to price requests or system upgrades.
The UMA token incentivizes holders to vote by providing an inflationary bonus. This bonus is distributed among active UMA voters. It’s equal to 0.05% of the current token supply.
There is a total supply of 105,000,000 UMA tokens. During an ICO, 2,000,000 tokens were distributed as follows:
- 48,500,000 - Co-founders;
- 35,000,000 - Developers;
- 14,500,000 - Future Sales.
Since UMA is a cryptocurrency, its price tends to fluctuate. In order to make an informed purchase decision, you can have a more in-depth look at the UMA price history, or the current UMA price, on the graph above.
Besides the governance token, the UMA crypto project has also launched a synthetic token ETHBTC, and a yield token.
What are the Main Features of UMA?
As mentioned in the What is UMA section, UMA stands for Universal Market Success. In essence, it enables the creation of collateral-backed synthetic assets based on the Ethereum network.
A quick refresher - synthetic assets, or synths, are tokenized derivatives that echo the value of another asset based on the tokens reference index.
This is where UMA comes in - it allows users to create tokenized derivatives based on self-executing financial contracts. These contracts come in the form of financial smart contract templates a.k.a. Expiring Multi-Party-EMP.
Moreover, traditional financial derivatives can be easily digitized on UMA. Synthetic assets issued by UMA have an expiry date and run on the Ethereum blockchain.
In order to create a new synthetic asset, users must comply with specific requirements and confirm that these steps have been completed:
- Identify the price of the asset;
- Create smart contract terms;
- Set an expiration date;
- Deposit the required amount of collateral.
Once the synth is created, its positions will be secured via financial incentives.
The UMA crypto project also comes with an integrated optimistic oracle called the Data Verification Mechanism, or DVM. This means that UMA’s smart contracts can quickly receive price information. However, its oracle is not used on a day-to-day basis for collateralization. The reasoning for this is that oracles can be easily disabled, manipulated, or hacked. Instead, DVM assists in resolving liquidation disputes, as well as settling synth contracts.
Besides, a decreased usage of oracles translates to lower fees.
There are 3 participants within the UMA ecosystem: sponsors, liquidators, and disputers.
One of the main goals of the project is to democratize the financial derivatives market without sacrificing decentralization. It can be seen reflected in the name of the project - Universal Market Success.
To reach this goal, the co-founders of the project have chosen the Ethereum network due to its accessibility. In other words, it provides the opportunity to create tokenized derivatives on a global scale. It’s secured through a Proof-of-Work (PoW) consensus mechanism.
UMA has gone through an in-depth audit by OpenZeppelin.
Some of the projects powered by UMA include Polymarket, ShapeShift, Boba Network, and Bankless DAO, among many others.
Before making any purchase decisions, make sure to do proper research. You can do so by checking out the UMA price history and other statistics in the section above.
Who Developed UMA?
The UMA crypto project was launched in late 2018 by co-founders Allison Lu and Hart Lambur.
Allison Lu successfully completed her studies at the Massachusetts Institute of Technology and earned her B.Sc. in Economics and Management. Prior to co-founding UMA, Allison worked in the finance industry as a consultant, and later took the role of vice president at Goldman Sachs, where she met Hart Lambur. Later, she worked as a VP of credit and risk analytics at Tala. Besides UMA, Allison Lu was also a member of a co-founding team of Pledger.
Hart Lambur earned his B.Sc. in computer science at Columbia University in the City of New York. During his studies, he also worked as a teaching assistant and research assistant at the same university. After graduating, Hart started working at Goldman Sachs. Besides the UMA crypto project, he played a role in founding Openfolio and Pledger.
Chriss Burniske, Christopher Tonetti, Jill Carlson, and Noah Jessop take on the roles of advisors and mentors.
Some of the UMA investors include Fintech Collective, Coinbase Ventures, and Blockchain Capital, among many others.