Today, as blockchain technology continues to develop, oracles play an increasingly important role as an important bridge between the blockchain and the outside world. UMA (Universal Market Access), as an optimistic oracle, enhances the flexibility and potential of Web3 by transferring real-world data to decentralized systems. This article will deeply explore the operating mechanism, token characteristics and future development direction of UMA.
UMA’s background
The UMA project was established in 2017 and was co-founded by Hart Lambur and others. In December 2018, the plan white paper was officially released, marking the official launch of UMA. As the first product of the core network, USSTOCK tokens have attracted widespread attention in the market. In April 2021, UMA conducted its first liquidity issuance on Uniswap, becoming the first project to conduct its first issuance on a decentralized trading platform.
The core concept of UMA is to improve the fairness, convenience and security of the market through optimistic oracles. The design of optimistic oracles aims to solve the imperfection of off-chain data and ensure the accuracy of on-chain data by motivating users to participate in verification.
How does UMA work?
UMA's optimistic oracle system involves three parties: the data requester (smart contract), the data provider, and the party who may object to the data. Its operation process is as follows:
Request: The smart contract sends a data request to the UMA oracle, and token holders are encouraged to participate in data verification to ensure the accuracy of the data.
Proposal: The proposer submits a deposit and provides a data point that other users can dispute. After the dispute period, the system presets the data correctly and transmits it to the chain, and the proposer can recover the deposit.
dispute
If any user objects to the data provided by the proposer, a deposit is required. Next, UMA token holders will vote on the disputed content and resolve the dispute within 48 hours. The correct party will be rewarded, while the wrong party will lose their deposit.
The voting process includes three stages: Public voting: lasts for 24 hours, and all voting records are recorded one by one.
Confirmation of votes: Carry out vote counting.
Receive rewards: Users who vote for the correct party can receive UMA tokens as rewards.
What makes UMA unique
Compared with traditional price feed oracles, UMA's optimistic oracles have significant advantages in flexibility. Traditional oracles can only transmit a single type of repeatable value, while UMA can handle complex data requirements between different smart contracts. This flexibility enables UMA to provide a variety of knowable truths from off-chain, including sports scores, weather conditions, or election results.
What are UMA tokens? The UMA token is an ERC-20 token and is the basis of the UMA security model. Token holders can not only participate in community voting and resolve data disputes, but also obtain rewards through voting. Every time you vote, the system will issue inflation rewards to users who participate in the vote, with the total amount issued equivalent to 0.05% of the current UMA supply.
The initial supply is 100 million coins, which will be first issued on Uniswap in April 2021 with an initial price of $0.26. Of the remaining 98 million tokens, 48.5 million belong to the project founder, 35 million are distributed to network developers, and 14.5 million tokens are reserved for future sales. In 2021, Risk Labs transferred 35 million tokens to UMA DAO, allowing token holders to participate in governance and fund distribution.
The development direction of UMA
UMA's business development team currently focuses on market forecasting and insurance. The risk management platform Sherlock uses UMA’s oracle as the backing of its insurance policy dispute system, and the information market platform Polymarket will soon use UMA’s optimistic oracle to solve problems that other oracles cannot handle.
In the future, more DAO tools will use UMA to improve governance and incentive mechanisms. Outcome.Finance, powered by UMA, is providing DAO with multiple ways to operate trustless incentive programs. UMA and its partner organizations Across Protocol and Outcome.Finance are both created and operated by the Risk Labs team and are providing support for Across's cross-chain bridge.
in conclusion
As an optimistic oracle, UMA provides new possibilities for the development of blockchain technology with its flexibility and innovation. Through incentive mechanisms and community participation, UMA not only improves the accuracy of data, but also lays the foundation for the future development of Web3. As the market continues to expand, UMA is expected to exert its unique value in more fields and promote the further development of the decentralized ecosystem.