UMA: What is it and How it Works

[Adams-Richard]

Image from CyptoSlate

From a technical perspective, UMA which stands for Universal Market Access is an optimistic oracle (OO) created with the purpose of recording any knowable truth onto a blockchain. But in the simplest way possible, anyone can push an answer on a chain, and there will only be a dispute if the information is inaccurate. Plugging into the optimistic oracle does not require using a contract launched on UMA

It was on 2017 when UMA was co-created by Hart Lambur. Not long after the UMA project whitepaper was revealed in December 2018, the developers made an official announcement about the formal launch UMA project made an introduction about the USStocks token, the first product on the core network.

UMA’s Concept of Action

Uma defines a decentralized protocol to enable the creation, purchase, and settlement of financial contracts for any underlying asset and introduces novel systems for maintaining margin collateral to enable market participants to trade without counterparty or settlement risk.

UMA does this by defining a generalized framework upon which financial contracts can be defined with mutually agreed economic terms, termination terms, and margin requirements. The UMA protocol uses smart contracts on the decentralized Ethereum VM to implement self-policing margin accounts: this allows the UMA protocol to be fully trustless and decentralized.

According to an online article written by Binance, there are three actors in UMA’s Optimistic Oracle system: the requester, the contract requesting the data; the proposer; an off-chain actor, offering the data; and the disputer, an off-chain actor that is able to dispute prices they disagree with.

UMA is not just a Standard Price Feed Oracle

Optimistic Oracle of UMA came up with human-powered data dispute resolution between contracts through the Data Verification Mechanism (DVM).

Compared to standard price-feed oracles that are unyielding, and tight, UMA prepared a method to reconcile inaccurate or incorrect data between smart contracts. OOs are much more versatile than other oracles because they can produce different and any kind of comprehensible correctness and authenticity from off-chain, like a sports score, weather conditions, or election results.

Closing Thoughts

Since the UMA’s Optimistic Oracle launch in 2018, it has grown rapidly and received a lot of praise. It has even secured hundreds of millions of dollars and the results even exceeded our expectations.
 
Anyone can be recompensed by proposing answers to price requests, and that is the lifeblood of the protocol. Proposed data will not be scrutinized unless it is disputed, and disputes are infrequent. And I can say that what makes the oracle optimistic.
 

[Mark bounty]

Solar Blox project is very strong and powerful. It will go very far and will achieve a lot in crypto finance.

[Mark bounty]

UMA is the native cryptocurrency of the UMA protocol (Universal Market Access protocol), a protocol that allows users to create their own synthetic assets – digital tokens that represent and track the price of any real-life asset.