Currently, the price of UMA has experienced a remarkable increase. In 2 days, it has rapidly climbed from 2.6 to 4.3, an increase of 80%. The current price is 3.92

What is UMA?

UMA includes 2 products

UMA was founded in 2017, and Hart Lambur is one of the co-founders of UMA. In December 2018, the UMA project white paper was released. Soon after, the developers announced the official launch of the UMA project and launched the USSTOCK token as the first product of the core network. In April 2021, UMA conducted its first liquidity issuance and became the first decentralized trading platform to conduct its first issuance on Uniswap.

UMA is a decentralized financial contract platform: ----See the simplicity

The contract design model it adopts can create unique and standardized financial products. The platform promotes various financial innovations by defining open source protocols that enable both parties to design and create their unique financial contracts.

UMA's contracts and price-feed-free model enable people to create personalized financial products using standards such as ERC20. In summary, UMA supports the creation of permissionless financial products. For example, UMA allows any counterparty to design and create its unique financial contract. The main difference between UMA and traditional financial derivatives is the automatic execution of smart contracts, which can be widely applied to various financial assets.

Unlike another synthetic token issuance protocol, Synthetix, the biggest difference of UMA is that Synthetix uses its SNX token as collateral to create synthetic assets, while UMA can theoretically use almost any cryptocurrency as collateral.

UMA coin is a governance token whose main function is to serve as part of system governance and resolve oracle disputes. In terms of governance, UMA coin holders are able to vote on financial contracts, asset types, key system parameters and access rights for upgrades, as well as how UMA coins are distributed. In addition, UMA coin holders can also vote to resolve disputes that do not require price feed contracts through the data verification mechanism DVM.

UMA introduces a data verification mechanism (DVM):

This is a decentralized oracle system with economic guarantees. This mechanism allows UMA to operate without continuous price feedback. Through the DVM system, UMA can effectively verify and determine the data related to financial contracts, thereby maintaining the normal operation of the protocol. This innovative design allows UMA to adapt to market fluctuations more flexibly without relying on continuous price information.

What makes UMA unique from other DeFi protocols is that it does not require continuous price feeds, but only the protocol itself to function properly.

UMA Key Points:

  • Design a system to measure the cost of corruption (CoC)

  • Create a system to measure Profits for Bribes (PfC)

  • Design a mechanism to ensure CoC > PfC and prove that it is feasible.

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Token Allocation

UMA is considered a super "priceless financial contract" and a type of financial synthetic asset. Similar to the previously mentioned SNX, its current market value has reached $300 million. Although there is still a certain gap compared to SNX's $1 billion, considering that UMA's market value is relatively low, its potential is even greater. Looking back at our previous discussion on SNX, we have said that it has a hundredfold potential, and UMA's market value is relatively low, so its potential is even greater.

This mechanism has recently played out in UMA. With short-term futures premiums exceeding 3%, the UMA token price has experienced a shocking increase, climbing sharply from 2.6 to 4.3, an increase of 80%. As the funding rate is still at an extreme negative value, the UMA token price may continue to suffer from short squeezes and peaks in the next few days.

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In addition, UMA's team is more recognized, while SNX is more significant in terms of market value and popularity. Considering that UMA has a relatively low market capitalization and is supported by Coinbase, some people believe that although SNX is expected to have a hundredfold potential, UMA, which currently has a lower market capitalization, also has considerable potential, especially if it gets the attention of Coinbase. This shows that UMA is expected to continue to develop in the future and show considerable growth potential.


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