Crypto Spotlight: UMA
We recently added UMA (Universal Market Access) to the Wirex app. It comes all the way from Wall Street, but don’t worry! It’s just as accessible as the rest of our crypto.
What is UMA?
UMA is an Ethereum-based protocol that allows users to create synthetic tokens and derivatives that can track the price of assets.
Who created UMA?
UMA was created by Hart Lambur in 2018. Lambur previously worked as a professional trader at Goldman Sachs.
What does it do?
With UMA, users can trade any assets using ERC20 tokens without exposure to the asset itself. It uses two main factors in its protocol – Priceless Financial Contracts and UMA’s Oracle.
- Priceless Financial Contracts – These are smart contracts that only require a price on-chain in the event of a dispute.
- UMA’s oracle – Works to allow contracts to request and receive price information. This itself uses a Data Verification Mechanism (DVM) as a core component which acts as a resolution system for raised disputes.
Overall, all these components work together on UMA’s protocol to build an open-source infrastructure for creating derivatives on the Ethereum blockchain. They also bring security and enhanced collateralisation for counterparties.
What makes it unique?
UMA is unique in how it opens possibilities for accessing DeFi. Specifically, how it helps anyone to gain access to specific assets that would otherwise be unavailable.