UMA - Going 10000x? But are you willing to get involved?

UMA - Going 10000x? But are you willing to get involved?

By Crypto Eric | Blockchain Auditor | 26 Mar 2021

The latest Coinbase Earn

Coinbase is helping get the word about UMA out to everyone with a Coinbase account and a few minutes to watch a few videos. Reddit's r/Cryptocurrency, Publish0X and all of the similar communities are buzzing with this latest giveaway. A free $6 of crypto that could moon or lambo! Why not add it to the arsenal ... or immediately turn it into something else you feel will go many x?

The truth about cats and dogs

I preferred Janeane to Uma. That's ok. There's a reason there's 31 flavors at Baskin Robbins. So I want to take a different direction on the discussion. Not whether UMA will x, but does the UMA project's plan make sense in the first place?

There's a lot of free promotion, and I see many people talking about the potential to 10x, 100x, 1000x. But no one is talking about whether UMA as an ecosystem makes sense. I understand that in the land of DOGE, actual function may be irrelevant. But what did those videos say?

Synthetic assets

People (token sponsors) can collateralize anything they want to a smart contract, and then sell an Ethereum token version of it. That's not completely off-base. Sure there are lots of question. How do you make sure the collateralized assets doesn't disappear? Does collateralizing something compromise that something in any way?

It's Turtles (or people?) all the way down

Once you get beyond that, there are all the different roles people have to play. There are 

  • Token sponsors, as discussed above
  • Liquidators - PEOPLE (or their "bots") who monitor the value, in the place of some automated oracle service
  • Disputers - also PEOPLE (or their "bots")
  • UMA Tokenholders - PEOPLE who will vote on issues, such as disputes

Excuse me, Sir or Madam. Do you have time to talk about UMA?

So this whole thing centers on people (or bots they develop) that are willing to involve themselves in monitoring the system, looking for problems, and voting on issues. Do you have any time to devote to this to get more UMA? If people are concerned about 51% attacks on BTC, what about someone setting up a derivative with UMA and only their friends and family will want to serve as the turtles?

UMA makes it sound like derivatives are something simple. Does anyone remember the US financial crisis of 2008? The Dodd Frank Act? The beginning of the Legal Entity Identifier requirement? Do you know what a tranche is? 

Maybe UMA will be Derivatives for the Rest of Us. Maybe UMA will HODL. But I ask - does this business model make sense?

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Blockchain Auditor
Blockchain Auditor

The Blockchain Auditor blog is focused on accounting and audit issues related to blockchain and crypto-assets. There will be content of interest to those with an interest in topics such as accounting for cryptoassets, audit procedures related to blockchain and distributed ledger technologies, blockchain for improving audit processes, taxation of cryptoassets, and trust.

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