Tl;dr — A team that has been working in pseudo stealth alongside UMA for the last 3 months launches their inaugural products today: BTCDOM and ALTDOM. Tradable now, these derivatives give traders access to these oft-referenced indexes. The team, Domination Finance, will be launching a suite of related products over 2021.
What are Domination Pairs?
Domination Pairs are products that reflect the relative market cap of a specific asset compared to the rest of the industry. In the case of a crypto domination index, such as BTCDOM, this reflects the ratio of the marketcap of Bitcoin to the entire crypto market cap.
This ratio has been used for years to talk about the total attention and money going towards Bitcoin compared to the wider crypto industry. Bitcoin and ethereum maximalists often debate it. Now there is a clean way to trade it.
Domination Finance offers both sides of the same coin: BTCDOM and ALTDOM are inverses of each other. This means that if you want to express a view about the movement of Bitcoin Dominance, you can do so either by purchasing a token or by minting and selling a token. This choice means you can either swap one asset for another, or, use DAI collateral to mint and sell.
If you think…
Bitcoin Dominance will go down → You can mint and sell BTCDOM or buy ALTDOM
Bitcoin Dominance will go up → You can mint and sell ALTDOM or buy BTCDOM
This flexibility allows you to evaluate how taking a position fits into your overall portfolio goals.
The user interface allows you to long (green button) or short (red button) Bitcoin dominance as well as manage (silver button) your positions. You can do the same.
This interface is even designed for mobile devices, which is notably missing from other DeFi applications. This means you can check your position as easily and effortlessly as you check your tweets. Their dapp is easily accessible via MetaMask or supported WalletConnect apps.
How does Domination Finance fit in with UMA?
The Domination Finance team explains that they chose UMA because of the novel oracle solution and the flexibility of the protocol. They leaned into this flexibility when designing their price feed in their UMA Improvement Proposal, which was passed in DEC 2020.
The price feed uses CoinGecko’s data and the Domination team worked directly with CoinGecko to create an API. This does not mean that CoinGecko is a point of failure: as with all products on UMA, any irregularities could be reviewed by tokenholders in the event of a price dispute.
The Domination products are exemplary examples of what can be accomplished with UMA. It is a derivative product that uses a customized price calculation to allow traders to speculate and hedge in a way that is not possible with primary assets.
The team started progress before the announcement of developer mining, is self funded, and has no platform token. They are outspoken purists on this matter, to the point of aggravation.
How to Participate
The fastest way to participate is to open a position or become a liquidity provider. The Domination team has hidden most things under the hood and made the UX as easy as possible. Visit domination.finance to get started.
If you’re keen to understand the product better, share your feedback, or make domination product requests, join discord.umaproject.org and visit the #domination-finance channel.