Week Ending 18th June
Long Short Pair (LSP) Factory Contract Launched.
UMA has built a new simple but powerful contract template called the Long Short Pair (LSP) which enables a suite of new products. This innovative template allows token sponsors to deposit collateral and mint a pair of tokens — one short, one long, where the sum of their value is always worth the same as the collateral deposited, allowing the minter to close their position at any time by redeeming the pair. At expiration, UMA’s Optimistic Oracle will propose a settlement price to determine how much collateral each long and short token is worth. The financial technicalities behind the token are explained in a recent Internal Learning Session.
As tokens are minted in pairs the tokens sponsor does not need to worry about liquidation because of sudden price moves nor is there any need to integrate a complex or expensive real-time on-chain price feed. This template supports a wide variety of product types including predictions and insurance markets; linear payout contracts, covered call options as well as Range tokens that are detailed more fully below.
Range tokens as a DAO treasury management strategy
A specific implementation of the LSP in practice is Range Tokens. These are of particular interest as they solve a known pain point within Defi protocols who have large amounts of value stored in their own token. They anticipate this value increasing as their protocol matures, but in order to grow the protocol, upfront cash is required. Range tokens offer a low risk means by which protocols can raise cash against their protocol tokens without the need to sell providing them with a decentralised treasury management strategy .
This new financial primitive has generated a great deal of interest in the wider crypto community, including an interesting Armada podcast from that explores the range token in the context of broader DAO governance.
UMA launches on Layer 2
The UMA ecosystem comprises a dispute resolution layer — the Data Verification Mechanism (DVM), and the financial contracts it secures. UMA’s architecture has from conception been decoupled, meaning the dispute layer and the contract layer do not need to live on the same chain. Having a decoupled architecture gives UMA the advantage of being able to deploy to any EVM chain efficiently.
Polygon is the first layer 2 chain where financial contracts can be deployed with a bridge to the DVM on the Ethereum network. A detailed look at the architecture which enables this scaling can be viewed in this medium article. Polygon is only the first scaling solution on the list, and UMA will be extending support to the other solutions. Priority is placed on chains that show the most substantial developer interest for UMA.
The SuperUMAns came together from the UMA community to build the Total Value Locked (TVL) in the UMA protocol, to maximise the output of the KPI Options tokens which were launched back in February, by raising awareness of the uses of KPI options and assisting protocols who would like to offer KPI options to their communities to help them achieve their collective goals.
Over 150 community members stepped up to volunteer their services and over 60 have been consistently engaged in presenting and promoting KPI options to other crypto communities and DAOs they are involved with, taking on a variety of roles. A recent Internal Learning Session highlights the thinking behind UMA’s community incentivisation strategies. New SuperUMAns are always welcomed — come join us on Discord and raise your hand in the SuperUMAN circle to join the lair.
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UMA is always seeking uniquely qualified candidates. Come join us on our journey to making financial markets universally fair and accessible.
Below are our currently open roles with UMA:
Senior Software Engineer: An engineer to work on our entire Ethereum-based web 3 stack
Smart Contract Engineer: An engineer who’s expert in solidity and smart contracts
Launch Engineer: An engineer who can take internal and external products from ideation to mainnet (supporting external engineering teams to interact with our contracts and technology).