Consider investing in UMA, one of the hottest cryptocurrencies in the market.
Critics of cryptocurrency often point to its adoption as a revolution merely driven by monetary incentives. However, that is quite far from the truth. Instead, multifaceted goals and objectives are propelling the industry forward. One of these goals is to create an accessible global financial market that empowers individuals who have previously been disenfranchised by traditional financial institutions.
2021 saw a wave of new DeFi projects develop in hopes of making this goal a reality. One project that has grown out of this mission is Universal Market Access (UMA). This DeFi platform aims to democratize finance by making financial derivatives accessible and secure for everyone. UMA consists of products that work together to achieve its goal of increasing accessibility within the financial markets.
So is UMA a good buy? Find out more about the network fundamentals, unique offerings, and future roadmap before making an informed investment decision.
Universal Market Access (UMI): An Overview
UMA is a Defi protocol that cuts out the centralized brokerage firm and allows users to trade contracts similar to futures and options by using smart contracts. The platform was created in 2018 by two former Goldman Sachs employees that wanted to use decentralization to bring derivative contracts to an open market without high brokerage fees and regulations.
The UMA protocol has five main structural components in its contracts to ensure all sides are adequately protected and well informed: margin accounts for each counterparty, public addresses of all the counterparties, agreed-upon economic terms to calculate the value, smart contract functions that maintain the margin balances and an oracle that provides secure and verified off-chain record in case of a dispute.
Investors looking to leverage funds can freely do so through its open and automated structure without the hassle and legal risks of using a brokerage firm. It uses its own off-chain oracle to allow variability that other oracle platforms like chainlink do not handle. This off-chain oracle allows commodities, stocks, and altcoins to be used within its smart contracts. The variety of its market connects traditional finance to this automated transaction service that ensures all users are informed about their positions and protected against fraud, making UMA a good buy.
Notably, UMA leverages oracles for a variety of functions. Oracles are off-chain sensors that can communicate data to and from a blockchain. The network introduces a truthful oracle for real-time valuation, settlement, and dispute resolution. Additionally, there are price feed oracles that rely on economic incentives via the Data Verification Mechanism (DVM) to guarantee validity. Part of this strategy is making sure the cost of corruption is higher than the profit that could be earned through malicious activities.
Various such use cases and technical capabilities make UMA a growing crypto project and a good buy.
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Universal Market Access (UMI): Pros
Billions of people worldwide lack access to basic financial services due to a lack of infrastructure. Universal Market Access brings these populations a viable alternative, which is the core reason why UMA is a good buy in 2022. Users only need the internet and a smart device to participate in the Universal Market Access ecosystem.
The UMA platform enables anyone to build decentralized financial products that operate in a permissionless manner. Uniquely, these systems allow for programmable risk. Smart contracts allow users to create collateralized synthetic tokens to trade with real-world assets without direct exposure. Users can hedge, trade, or invest in financial markets of all types in a more streamlined manner using the protocol.
Universal Market Access removes all the technical and financial barriers to derivatives trading. These high-return investments used to be exclusive to accredited investors who could show at least one million in assets. As such, the average investor missed out. Keenly, Universal Market Access empowers anyone to design and build universally accessible financial products. In this way, it lowers the entry bar into the world of financial derivatives and enables new investors to gain exposure to assets that would otherwise be out of reach.
Derivatives trading can be expensive in the traditional markets. However, what makes UMA a good buy and highly profitable for investors is lowering costs by eliminating all intermediaries. Additionally, transaction costs are minimized through a margin system. Finally, this protocol allows counterparties to monitor and value their trades off-chain.
Universal Market Access (UMA): Cons
The UMA protocol finds itself in a highly competitive space alongside numerous other projects. They need to be on top of their game to establish themselves as a market leader among protocols that enable the creation of synthetic assets.
UMA could prove to be a profitable investment shortly, which is likely to provide you with higher returns, and it is a possibility that your current investment may increase in value. But again, these are simply speculations in a highly-volatile market.
UMA: Buy? Sell? Hold?
UMA is the native token of the Universal Market Access ecosystem. Holders of the UMA token can participate in the network’s governance. They vote on various project proposals and contribute to the protocol’s security. As a UMA token holder, you have the right to vote on various improvement proposals for the protocol, such as new project features and types of contracts that could be included on the platform.
Holders can also help resolve asset pricing disputes that occur during liquidation. By participating in the UMA governance process honestly and accurately, token holders are entitled to UMA tokens as rewards.
Given the pace at which the protocol is growing, it is safe to conclude that UMA is a good buy in 2022.
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