UMA (UMA): overview of the cryptocurrency token and the project, characteristics, course schedule, advantages, prospects
UMA is a protocol for building synthetic assets that allows counterparties to design and create their own financial contracts. While these contracts are similar to conventional cryptocurrency derivatives, they have a significant difference: they are self-sustaining economic incentives, so that they are self-sustaining and publicly available.
The UMA token is used to manage the network and allows its holders to vote on certain protocol changes.
On September 9, 2020, the UMA token was added to the Binance exchange. Pairs available for trading: UMA / BTC and UMA / USDT.
We offer an overview of the project and the UMA token from the editorial staff of Btcnewsweb.com.
UMA chart and rate (UMA)
Binance UMA / USTD price chart:
|Name||UMA (Universal Market Access)|
|Total emission||100 720 113 UMA|
|Current issue as of 08.09.20||54 755 954 UMA|
|Course on 09/08/20||15,91 $|
|Market Capitalization as of 09/08/2020||838 049 851 $|
|Exchanges||Binance, Balancer, Gate.io, Uniswap, BKEX, AEX|
UMA project architecture overview
The UMA infrastructure is open source and is based on two main concepts:
✅ “Priceless” financial contracts used to create synthetic assets.
✅ Decentralized Oracle – Data Verification Mechanism (DVM).
Ethereum’s invaluable derivatives ensure the proper number of counterparties on the network by rewarding them, or rewarding third parties that identify improperly collateralized positions. The Data Verification Mechanism (DVM) is used to confirm the fact of inadequate provision.
“Priceless” financial contracts are so named because they do not require a price channel to use, which minimizes the use of oracles. The advantage of this approach is to reduce the potential chances of outside attacks on oracles. The contracts are developed on the basis of mechanisms that include the procedure for liquidation and settlement of disputes. If the position is not liquidated, then it is solvent (properly secured). Oracles are used only when liquidation is contested, that is, very rarely.
DVM is a decentralized oracle service for providing currency prices in response to requests made by contracts. In response to these requests, UMA token holders record their votes and then disclose them down the chain. The process takes 2-4 days, so it is not suitable for use as an online price determiner. This is a kind of addition to the “priceless” financial contracts. DVM is designed to provide an economic guarantee.
How UMA tokens are created
Synthetic tokens in the UMA system creates a decentralized application by launching a smart contract. When a user deposits a DAI, they can issue synthetic assets fully backed by the deposited DAI. The oversupply of tokens guarantees full support of the “synths” at any given time, which means that anyone who buys them will be sure of their security.
At the same time, anyone can use a smart contract to check whether their tokens are sufficiently secured. In the process, the smart contract checks what was the last price from the price history and whether the DAI amount, which is supported in the contract, corresponds to the specified amount. Everything must fit properly. Otherwise, the smart contract freezes all collateral (the participant cannot deposit or withdraw assets) and charges a penalty.
Opportunities for UMA token holders
UMA token holders have two main categories of privileges:
✅ Management of the UMA infrastructure in the process of voting for one or another change in the parameters of protocol updates.
✅ Voting on RFQs originating from financial contracts using DVM.
Participants who vote responsibly receive a reward (currently 0.05% of the network’s total token supply), distributed in proportion to the number of UMA tokens held.
Participants are sometimes asked to vote on price requests. Voting includes two stages (commit and reveal), each for 24 hours. As far as ecosystem management is concerned, it takes place in two dimensions: DVM (system of oracles) and financial contracts.
Holders of UMA tokens wishing to receive a reward are required, if necessary:
✅ Register contract templates and deregister them.
✅ Approve new price identifiers.
✅ On rare occasions, close contracts if it is proven that they are not secured.
Also, holders of UMA tokens take part in DVM management, periodically updating the main DVM protocol and changing its parameters.
Where to store UMA
Work with the protocol is carried out by connecting the Metamask decentralized wallet. It is also convenient to store the UMA token in it, like any other ERC-20 tokens. The advantages of this method:
✅ The ability to quickly use the asset in any dApps that interact with Metamask.
✅ Convenient format in the form of a browser extension.
✅ Assets are protected from external attacks due to the fact that the keys are stored on the device.
The open source code of the wallet leaves no doubt about its reliability. Only at the beginning of work will you need to add a UMA token (all supported tokens can be added or hidden at any time in a few clicks).
Where to buy, sell, trade UMA token
The token is traded on decentralized exchanges Balancer, Uniswap, as well as centralized exchanges Binance, BKEX, AEX, Gate.io. As an example, let’s analyze the process of buying it on Gate.io – this is one of the old proven trading platforms with a good level of liquidity.
- Create an account and set a billing password.
- Sign in to your account. Get tested
- Fund the exchange account (UMA token is traded in tandem with USDT).
- Go to the trade page, select a trading pair using the panel on the left. And create a buy order by selecting its type and specifying the required parameters (price and quantity).
Advantages and disadvantages
✅ A variation on the current topic of synthetic assets.
✅ Management opportunities for token holders and rewards for it.
✅ Reduced dependence on oracles, which reduces the risk of external attacks.
✅ Investors include Coinbase and a number of other large companies.
❌ The token is not listed on many major exchanges.
❌ Not for beginners.
UMA has already entered into partnerships with many well-known companies in the cryptosphere. In addition, institutional investors are interested in the project, which opens up vast prospects for further development. The token rate is characterized by a fairly stable growth, although not without falls, which are characteristic of any cryptocurrency.