UMA is a platform dedicated to the ability to create, maintain, and pay for “affordable” financial contracts on Ethereum. UMA, or Universal Market Access is a protocol that allows users to create their own artificial products - digital tokens represent and track the price of any real asset.
The protocol uses a model known as Total Return Swap, which is a two-state contract in which one company pays a lump sum return on a particular underlying asset, including interest payments or dividends and any capital or deficit calculations. In contrast, the other party pays a regular fixed fee. The underlying asset is usually called a reference asset, and the exchange is settled and ends on a fixed date in the future.
UMA was founded in 2018 by Allison Lu and Hart Lambur, two former Goldman Sachs traders, with the aim of allowing users to transfer risks across the Internet without the need for central authorities. The team has been inspired by traditional financial transactions to define an open-source protocol to allow anyone, anywhere, to design and build unreliable financial contracts.
The main idea behind the reach of Universal Market Access is reflected in its name: by building a protocol for the manufacture of commodities and financial contracts in the blockchain, seeking to democratize and expand the market for the financial exit.
Traditional financial markets have high barriers to entry through regulatory requirements, which often prevent people from participating in them. It is often very difficult for potential traders and investors to participate in markets outside their local financial system. This prevents the emergence of an inclusive global financial market and limits participation in a few institutions that can afford the right diligence and legal processes.
UMA contracts, on the other hand, are based on the Ethereum blockchain, its unlicensed environment allowing any user to build, operate, and trade digital output from anywhere in the world. This access is especially important in developing economies around the world, where financial institutions are often far forcing local market participants to isolate themselves.
The UMA Protocol creates artificial assets known as low-value financial contracts, which are smart contracts that require only on-the-supply price supply to determine the base price. To ensure that the core economic values are aligned, the UMA uses network incentives to ensure ethical conduct. In the case of data differences, the UMA protocol solves the problem using the Data Verification Mechanism (DVM).
In addition, to DVM, there are four other key players in the UMA ecosystem: Token Sponsors, Liquidators, Disputers, and UMA Token holders.
The use cases of UMA are:
· Price Requests: If the contract transaction is controversial, the owners of UMA tokens are obliged to vote on price requests through the Data Verification Mechanism (DVM).
· Governance: Token owners have a say in what types of contracts access the system, what types of assets are supported, and key system and development parameters. All administrative matters are resolved through the “UMA Improvement Proposal” (UMIP) process.
The total supply of UMA tokens is more than 100 million tokens, and the token distribution is as follows:
· 35% tokens to developers and UMA users.
· 15% tokens to investors.
· 33.5% of tokens will be held by founders and early contributors.
· 2% tokens into an Uniswap liquidity tool.
· 14.5% of tokens are reserved for future token sales.
| DATE | NEWS/EVENTS | IMPACT |
| 09/11/2021 | UMA launches Across protocol to speed up transactions. | +37% Increase |
| 04/02/2021 | DeFi boom pushes Universal Market Access (UMA), SwissBorg, and Siacoin (SC) up. | +58% Increase |
| 01/09/2020 | UMA becomes the biggest DeFi protocol on Ethereum overtaking Yearn. Finance | +99% Increase |
UMA is one of the top projects on the Ethereum blockchain with fair use and solid service. As synthetic goods become increasingly popular, UMA may be the most popular asset, which could affect the price of UMA in the market as well. With the goal of creating a separate financial market for free access to everything due to low entry barriers, UMA works to create global tokens and access to distributed international currencies.
As DeFi is so popular, UMA can become an important asset over time, thanks to its technology and its use.
UMA