As the crypto sphere continues to wax stronger, the number of crypto assets keeps increasing. Notably, the sphere has, since its 2013 boom, witnessed thousands of crypto innovations and projects. Despite the volatility of these assets, their level of adoption still grows every day. Today, crypto activities unfold in all the countries across the globe, relegating the traditional method of paying, storing, and trading value. As the industry continues to enjoy massive expansion, more crypto assets are manifesting to avail investors with numerous options. The implication of this is that investors are able to decide which asset to invest or subscribe to in line with their respective objectives. Undoubtedly, one of those crypto assets is the UMA crypto.
Just like other forms of cryptocurrencies, the UMA crypto remains one of the available crypto assets available for investors to explore within the sphere. Since its creation, it has continued to compete for relevance with its other contemporaries. With this article, new and existing investors will learn more about the rudiments of the UMA virtual currency, its background, and how they can seamlessly acquire it.
UMA crypto and its protocol
Since the UMA crypto manifested as the native token of the UMA protocol, it is grossly impossible to examine the former without proper reference to the latter. Worth noting that UMA stands for Universal Market Access. As designed, the UMA protocol runs as a network that allows subscribers to devise their synthetic virtual assets. These assets, as reported, usually represents the value of any real-world asset. As an open-source DeFi protocol, UMA runs on the Ethereum blockchain. Notably, the assets devised on this protocol are termed “priceless financial contracts.”
According to the protocol’s website, the assets function as smart contracts, and their eventual values become determined by an on-chain value. As reported, the protocol uses incentives to stabilize the values of the assets. Worth noting that the UMA protocol possesses a mechanism identified as Data Verification Mechanism (DVM). According to UMA, the DVM establishes a “profit from corruption” mechanism and thus guarantees consistent blockchain oracle data.
Since its establishment in 2018, UMA has undergone numerous upgrades on its network. In mid-2021, the protocol unveiled a product, named “range tokens.” This innovation paves the way for DAOs to gather more funds by borrowing. More so, the protocol unveiled another project in late 2021. The project, Across protocol, manifested to insure prevailing transactions between layer 1 blockchains and layer 2 scaling offerings.
Players in the UMA protocol
As observed, the UMA protocol possesses four players that make the ecosystem effective. Notably, liquidators remain one of the existing players in the UMA protocol. The liquidators function by tracking the value of the “priceless financial contracts.” More so, liquidators help to make sure that sponsors of tokens possess enough collateral.
More so, token sponsors also represent another player in the ecosystem. Token sponsors work by minting those tokens by locking UMA as collateral in a contract. Disputers also run as a player in the UMA protocol. They work by using off-chain data to track priceless financial contracts initiated by sponsors.
UMA token holders, too, function in the protocol by exercising governance rights, particularly when DVM intends to resolve a crisis. As designed, the protocol uses the DVM mechanism to streamline votes and reports by UMA token holders. Worth noting that the token holders also engage in other activities like protocol advancement, governance, and system changes.
Without a doubt, the UMA protocol stands distinctive from its contemporaries. Its uniqueness dwells in its ability to avail human-powered data dispute resolution between smart contracts. With this, it is able to activates the potentials of the web3, thereby enhancing flexibility, accessibility, reliability and fairness of the global market.
Roles of UMA crypto
The UMA crypto runs as an ERC-20 utility token. Notably, it serves as an instrument for governance and resolution of disputes. Holders of UMA crypto usually vote on proposals pushed forward by the team. According to findings, these holders get UMA crypto as rewards for participating in governance. Additionally, holders vote on the prices of synthetic assets.
Developers of UMA
Notably, both Lambur Hart and Allison Lu co-founded UMA. The two co-founders were previously working together at Goldman Sachs before resolving to initiate the UMA project. Worth noting that Hart served as a bond trader with the firm, and Lu worked as a vice president. After leaving Goldman, they decided to release a whitepaper of the UMA project. Shortly after, Lu and Hart kickstarted the project after unveiling the USStocks as the first product to run on the protocol. With the USStocks, investors are able to overtly track and invest in the U.S stock market.
The UMA team of developers was named Risk Labs. Last year, the Risk Labs issued over 30 million tokens to the UMA DAO. Afterward, existing holders of the token were made to decide on the best way to deploy the tokens in a bid to the expansion of the protocol.
Later on, UMA unveiled its yield token, identified as yUSD. Today, UMA has grown to become one of the notable projects in the crypto space, boasting of numerous community members. More so, in 2021, the developers of the protocol launched its first initial offering, a development which marked another feat in its quest for expansion.
Occasioned by its prospects, UMA has now earned the patronage of Sherlock. The risk management firm employs UMA:s oracle as a major enabler for its insurance policy dispute mechanism.
Market performance of UMA token
The Universal Market Access, or UMA crypto depending on how you know it, is one of the emerging Altcoin in the cryptocurrency space. UMA crypto maybe not have enjoyed some media attention since its creation in 2018. However, UMA crypto has some fancy market stats worthy of investors’ attention. Though, it’s fair to admit that UMA crypto is not immune to the general volatility of cryptocurrency. Yet, its past market performance clearly reflects how far it has come and how well it’s forging ahead.
Firstly, recall that UMA crypto enjoyed an all-time high of $43.37 around February 2021 during the general cryptocurrency boom. This figure illustrates over 403% increments compared to its all-time low of $1.16 it recorded around May 2020. Worth noting that UMA crypto has a strong reactive pattern to the market situation. The difference in its all-time high and low strongly denotes its flexibility to the market situation.
Exactly this hour last year, the value of UMA crypto lingered around $14 while recording $6.24 the year before. For long-term investors, this could be a worrying sign and will likely force a rethink. Still, investors with good data and analytical minds will picture the blessing of acquiring UMA crypto during the dip. For them, buying the dip and selling at a lucrative price might bring in good returns.
Side Notes On the Future Of UMA crypto
Despite the tribulations, the future still remain bright for UMA crypto. Indications show that the future of the token is bright. Generally, it’s widely accepted that the future of cryptocurrency is bright, and UMA crypto is quite reactive to market situations. Therefore, one can take solace in this to further keep faith in the future of UMA crypto.
Meanwhile, there are other factors to consider while analyzing the future of UMA crypto. The UMA protocol is another factor capable of contributing heavily to this course. UMA aid counterparties in digitizing physical financial derivatives, which include contracts for differences (CFDs) or total return swaps. The UMA protocol also aids the initiation of independent derivative contracts based on other virtual assets. UMA is gaining prominence as a medium for creating synthetic assets rooted in Ethereum Blockchain.
However, investors much change their “panic sell” approach towards UMA to aid the future of the token. This approach by investors have and will continue to spell doom for UMA crypto, its future, and its relevance. It could have been one of the notable factors that contributed to its current state.
Conclusions
Lastly, the tendency of allowing users to design, manage and establish digitized derivatives without geographical barriers is another exciting part of UMA. This openness and flexibility are essential for growing economies across the globe, most especially in a region where financial institutions are still struggling, thus, establishing barriers for local market participants. While developers continue to utilize the contracts of UMA, there should be high hopes on the popularity and development of UMA.
Notably, the token is giving them hope now as it is gradually recovering from its losses. Though, UMA crypto current price is way behind what it used to enjoy. Buying the dip and submitting fate to the general recovery of the cryptocurrency market might be a risk worth taking.
Worth noting that Risk Labs as the team behind UMA has also enjoyed numerous collaborations from numerous institutional actors in the sphere. As of today, some of the partners include Across Protocol, Outcome Finance and many others. Both Across and Outcome bridges are currently being powered and supported by UMA.
Read More