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SuperUMAns #11 - How UMA brings value to partnerships and integrations

By PVM | SuperUMAns | 16 Aug 2021


How UMA brings value to partnerships and integrations without charges or fees?

UMA vision is to create an universally accessible financial system where everyone can attain or transfer any form of asset seamlessly and securely through the UMA protocol. This vision is powered by Priceless Contract Templates, Optimistic Oracle Service and flexible financial products - KPI options, Success Token, Range Token, etc. The current oracle solution are missing an economic guarantee around to cost of corrupting the oracle (CoC), which is a vital aspect for DeFi evolution. The oracle integrated in UMA protocol guarantees the security of the smart contract with the decentralized and permissionless setting within the blockchain.

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UMA brings value to partnerships and integrations with innovative synthetic products such as KPI options, Range Token and Success Token. There are no charge or fees required to use the protocol - no strings attached! Yes that's 100% accurate - only gas is required to use UMA Protocol.

The partnerships and  integrations are part of UMA's cryptoeconomics, as the market cap of $UMA will be twice the total value locked into the protocol, due to the CoC > PfC inequality. The price of $UMA token will raise if UMA's usage is increased, therefore fees are charged only if the inequality is breached.

The lack of "rule of law" on blockchains makes any on-chain oracle corruptible for a price. UMA's oracle and the blockchain settings ensures that this corruption is not affordable or profitable. The current system will measure the Cost of Corruption (CoC) and the Profit from Corruption (PfC) and the mechanism will  keep the cost higher then the potential profit (CoC > PfC ). The mechanism will maintain the cost of corruption higher then any possible profit obtained from corrupting the DVM, reducing to zero the economic incentives.

KPI options

The Key Performance Indicators (KPI options) are synthetic tokens that will pay out the holder a different amount of locked value, at a set deadline. The amount that can be redeemed for each KPI option is defined by set metrics if the desired indicator is achieved. The indicator can be number of users, TVL, trading volume, number of token holders, participation in governance, etc.

The KPI is created by setting the collateral type and the asset that will be distributed to KPI holders after the deadline. The minting process will lock the collateral into the smart contract and will create the KPI tokens. At the end of the period, the reward will be unlocked at a value related to the success indicators.

Range Token

The Range Token was compared to a convertible debt, similar to when companies are receiving funds without issuing equity upfront. This synthetic asset will enables DAOs to use the native token as collateral to borrow funds and at maturity it is paid back or if not, the range token holder is compensated with the equivalent amount of the collateral. The formula used is Range Token = Yield Dollar - Put Option + Call Option, which will use the settlement price of the native token to determine the number of tokens.  The numbers of DAO native tokens given to the Range Token holder is capped because the collateral cannot be liquidated. To compensate the exposure and the risk given by price volatility, the Range Token holder will receive a minimum number of DAO native tokens regardless of how much the price will raise.

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Success Tokens

The Success Token is created from the exposure to 1 token of collateral plus an imbedded call option. Typically Success Tokens are sold for the current price of the collateralized token and the call option comes as a replacement for the discount. The investor will obtain extra profit if the project performs well which brings benefits to the whole ecosystem. Neither Range Tokens or Success Tokens require the immediate sale of native tokens, as both will require collateral. The Success Token is the right tool for new and innovative projects to attract investors and to create the premises for success.

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The UMA protocol ecosystem unique strategy is based on Priceless Contract Templates, Optimistic Oracle Service, KPI options, Success Token, Range Token and incorruptible oracle system based on CoC > PfC algorithms.  All the above tools are available for DAOs and created for DAOs, filling the demand for financial assets required to run efficiently a decentralized autonomous organization. The unique selling points are enhanced by the absence of charges or hidden fees. 

Check the UMA Library: SuperUMAns by PVM

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How to join UMA and the superUMAns?

The SuperUMAns are the community’s ninja troops. SuperUMAns are the people who bring the community to life. All you have to do to become a superUMAn is show up on Discord in the superUMAn lair. Whatever your talents are, we can put them to good use! 

The superUMAns are an indispensable component of the machine that helps UMA reach the greater DeFi community. SuperUMAns are writing articles, making videos, funny content, design swag, hold community calls, are looking for collaboration opportunities, help teaching people about UMA, support other communities, etc!

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PVM
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The superUMAns are crypto enthusiasts that recognized the colossal potential of UMA and a group of people that are ready to share their knowledge so the Cryptoverse will understand UMA's amazing features! ** Not an UMA official blog **

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