Popular Science UMA: Building a Synthetic Derivatives Platform
Editor's Note: This article comes fromEthereum enthusiasts (ID: ethfans)Editor's Note: This article comes from
Ethereum enthusiasts (ID: ethfans)
Project Description
, Author: UMA team, reprinted with authorization by Odaily.
Editor's Note: This article contains slides from a presentation by the UMA team at Devcon5. The chapters are divided into slides, and the explanatory content is added by the editor.
Project Description
UMA's mission is to support universal market channels, and its vision is to allow financial sharing to flow freely in the Internet without centralized authority.
UMA consists of two core concepts: a contract design pattern that is automatically enforced, and an oracle mechanism with economic guarantees.
Introducing Synthetic Derivatives to Ethereum
This part introduces the core of the concept of derivatives: a contract that uses some external reference data to determine the payment amount, which can be simplified as a series of "If this, then that" (if A situation occurs, then Paying B) to A is no different from betting.
The difficulty of introducing derivatives on Ethereum is that external reference data needs to be transmitted to Ethereum through a certain mechanism, and bribery, the information input mechanism, does not have to bear legal responsibility. Therefore, what UMA wants to introduce is an economically guaranteed information input mechanism: to ensure that the cost of bribery is always greater than the benefits of bribery.
UMA's synthetic asset Token and the mechanism behind it
This part introduces UMA's synthetic asset token: a token produced with certain assets as a guarantee (it can be tried on the Rinkeby test network).
Usage Scenarios of Synthetic Asset Token
This section introduces the sequence of application scenarios generated by UMA: UMA is a decentralized information input mechanism + contract template; the template can use the price index outside the Ethereum blockchain; opening a financial contract requires depositing collateral, or " Margin”; then financial risk can be used on exchanges, wallets, financing and insurance platforms, etc. It also contains several examples of applications built on UMA.
Starting from this part, the slides also specifically mentioned the particularity of "interest rate" transactions: the current interest rates on DeFi lending platforms are all changing in real time, so the common dimension "time" of interest rate contracts is not taken into account. The interest rate market is huge and can only be traded in the form of derivatives. There are also examples of how to use UMA to create interest rate contracts. The latter two examples revolve around the Dai stable rate for a fixed period of time.
