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Allison Lu: UMA – The Open Financial Platform for Building Synthetic Assets
Manage episode 267790607 series 1652309
UMA, or Universal Market Access, is an open source financial contracts protocol for building synthetic assets. It allows any two counterparties to design and create their own financial contracts for derivatives. An example of these assets in the traditional finance world, are interest rate derivatives. These are used to hedge against fluctuations in currency exchange rates. Today, interest rate derivatives are commonly used and the contracts to create these are standardized. Similarly, UMA allows anyone to create a derivative on a blockchain. Enforcement of agreement will be enforced by the network and so will settlement.
What’s unique about UMA is how it ensures proper collateralization of derivatives. Maker and other platforms based on collateralized positions use a price oracle and will automatically liquidate positions if they go below a certain threshold. UMA is ‘priceless’ and does not use an on-chain price feed as the primary means to determine proper collateralization. Rather, it incentivizes participants to identify improperly collateralized positions. UMA token holders essentially vote on the price.
Allison Lu, co-founder of UMA, chats in-depth about the platform and provides a great introduction to the world of financial derivatives.
Topics covered in this episode:
- Allison’s background and how she got into blockchain
- What derivatives are and how they work in the legacy financial system
- How the UMA protocol works
- How synthetic tokens are traded and fungibility
- Creating put options on the framework
- How does this compare to prediction markets
- UMA’s liquid mechanism
- Priceless synthetics
- What are the incentives on the protocol
- The importance of delayed reaction times
- How liquidation work and minting works
- How to prevent scamming
- The dispute process and corruption
- What makes the UMA protocol unique
- The UMA roadmap
Episode links:
This episode is hosted by Sunny Aggarwal & Friederike Ernst. Show notes and listening options: epicenter.tv/349
611 قسمت
Allison Lu: UMA – The Open Financial Platform for Building Synthetic Assets
Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies
Manage episode 267790607 series 1652309
UMA, or Universal Market Access, is an open source financial contracts protocol for building synthetic assets. It allows any two counterparties to design and create their own financial contracts for derivatives. An example of these assets in the traditional finance world, are interest rate derivatives. These are used to hedge against fluctuations in currency exchange rates. Today, interest rate derivatives are commonly used and the contracts to create these are standardized. Similarly, UMA allows anyone to create a derivative on a blockchain. Enforcement of agreement will be enforced by the network and so will settlement.
What’s unique about UMA is how it ensures proper collateralization of derivatives. Maker and other platforms based on collateralized positions use a price oracle and will automatically liquidate positions if they go below a certain threshold. UMA is ‘priceless’ and does not use an on-chain price feed as the primary means to determine proper collateralization. Rather, it incentivizes participants to identify improperly collateralized positions. UMA token holders essentially vote on the price.
Allison Lu, co-founder of UMA, chats in-depth about the platform and provides a great introduction to the world of financial derivatives.
Topics covered in this episode:
- Allison’s background and how she got into blockchain
- What derivatives are and how they work in the legacy financial system
- How the UMA protocol works
- How synthetic tokens are traded and fungibility
- Creating put options on the framework
- How does this compare to prediction markets
- UMA’s liquid mechanism
- Priceless synthetics
- What are the incentives on the protocol
- The importance of delayed reaction times
- How liquidation work and minting works
- How to prevent scamming
- The dispute process and corruption
- What makes the UMA protocol unique
- The UMA roadmap
Episode links:
This episode is hosted by Sunny Aggarwal & Friederike Ernst. Show notes and listening options: epicenter.tv/349
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