Summary

As an optimistic oracle, UMA will record all known truths on the blockchain. The oracle is the entity that connects the blockchain to the outside world. Optimistic oracles transfer real-world data to decentralized systems. If no dispute arises, the information is assumed to be accurate. The optimistic oracle machine is called a "human-driven truth machine" and aims to improve flexibility and unleash the unlimited potential of Web3 to build a fair, convenient, secure and decentralized global market.

Introduction

UMA was founded in 2017. 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, becoming the first decentralized trading platform to conduct its first issuance on Uniswap.

UMA is the abbreviation of Universal Market Access (Univeral Market Access), an optimistic approach that supports all markets and smart contracts in Web3 Oracle. Off-chain data is often incomplete or inaccurate and cannot meet the needs of smart contracts. The current oracle mechanism is rigid and can only transmit a single type of value and cannot handle other forms of data. In order to deal with imperfect information, optimistic predictions will encourage users to participate in verification and improve data accuracy.

How does UMA work?

UMA optimistic oracle system has three parties involved in the operation: data requester (smart contract), data provider, and possibly data The party raising the objection.

Request

UMA’s optimistic prediction Token holders are automatically incentivized to verify data to ensure the accuracy of data on the chain. The data transmitted by the optimistic oracle to the chain can be verified by token holders, which means a manual verification process is added.

Proposal

Usually In this case, the smart contract will make a data request and specify a dispute period (which can be as short as a few minutes or as long as a few days). The proposer submits a deposit and provides a data point that others can dispute. After the dispute period, the system assumes that the data is correct and transmits it to the chain. The proposer gets the deposit back. During the dispute period, someone may argue that the data is inaccurate and raise an objection.

Controversy

Some In some cases, there may be objections to the data provided by the proposer. This person also needs to pay a security deposit. Next, UMA token holders will vote on the content of the dispute and resolve the dispute within 48 hours. If the dissenting party is correct, he is rewarded with a portion of the proposer's deposit. Otherwise, the deposit paid will be fined, and part of it will belong to the proposer. Voting in the oracle system is divided into three stages:

• Public voting:The duration is 24 hours, during which all votes will be recorded one by one.

• Vote confirmation: Vote count.

• Receive rewards: Users who vote for the correct party can receive UMA tokens generated by the protocol as rewards.

After receiving, the tokens will enter the user's wallet and generate interest. These tokens are all valid voting tokens. The more times a user successfully votes, the greater their voting power.

UMA’s smart contracts are primarily designed for developers building decentralized applications, however, all UMA token holders can Participate in the operation of UMA optimistic oracle. UMA is an ERC-20 token built on Ethereum and can be held by wallets such as Metamask, Trezor or Ledger. The wallet must be connected to the UMA DApp to vote.

What is unique about UMA?

UMA’s optimistic oracle can resolve data disputes between smart contracts through artificial channels. Standard price feed oracles are rigid and can only transmit a single type of repeatable value to the blockchain, while optimistic oracles can coordinate data that needs to be complete or obscured between different smart contracts. Optimistic oracles are more flexible than other oracles and can provide any knowable truth from outside the chain, such as sports scores, weather conditions, or election results, so they have unlimited potential on Web3.

What is UMA token?

UMA is an ERC-20 token and is the basis of the UMA security model. As mentioned earlier, holders of the token can participate in community votes to resolve data disputes. Holders can obtain rewards by voting. Each time you vote, the system will issue inflation rewards to the users who participated in the vote, with the total amount issued equal to 0.05% of the current UMA supply.

Token holders can also participate in governance, protocol upgrades and system changes.

The initial supply of this token is 100 million. In April 2021, UMA conducted its first decentralized exchange offering on Uniswap, with an initial price of $0.26. Of the remaining 98 million tokens, 48.5 million belong to the project’s founders, 35 million are distributed to the network’s developers, and 14.5 million tokens are reserved for future sales.

In 2021, Risk Labs, the foundation that created UMA, transferred 35 million tokens to the UMA DAO, allowing UMA token holders to vote on the decision When to deploy, and where the money goes. These funds will be used to promote the development of the ecosystem.

What is the development direction of UMA?

Currently, UMA’s business development team is focusing on expanding the two industry areas of market forecasting and insurance.

Risk management platform Sherlock uses UMA’s oracle as the backing of its insurance policy dispute system. The information market platform Polymarket is also about to use UMA’s optimistic oracle, because other oracles cannot handle certain problems in a trustless manner.

In the future, more DAO tools will use UMA to improve governance and incentive mechanisms. Outcome.Finance, supported by UMA, has been providing DAO with multiple operational methods for trustless incentive projects. UMA and its partner organizations Across Protocol and Outcome.Finance are all created and operated by the Risk Labs team. Currently, UMA and its optimistic oracle are providing support for Across’s cross-chain bridge.

How to buy UMA on Binance?

You can buy UMA on cryptocurrency exchanges such as Binance.

1. Log in to your personal Binance account and enter [Trading] - [Spot].

2. Enter "UMA" in the search bar to view the available trading pairs. Let's take UMA/BUSD as an example.

3. Enter the quantity of UMA you wish to buy in the [Spot] column. Here we take market order as an example. Click [Buy UMA] to confirm the order, and the purchased UMA will be deposited into your spot wallet.

Summary

Since its launch in 2018, UMA’s optimistic oracle has gained raised hundreds of millions of dollars in financing. Builders are gradually understanding the mechanism of optimistic oracles and applying them to development and construction. Optimistic oracles may one day be at the core of various protocols, DAOs, integrations, and products.