SuperUMAns #82 - UMA Brought Truth To Web3
Truth is the cornerstone of trust, and in 2024, UMA Protocol took bold strides in its mission to bring reliable data to blockchains. From securing cross-chain bridges to powering prediction markets and revolutionizing DAO governance, our Optimistic Oracle has emerged as the very backbone of Web3's most groundbreaking projects.
Last year, UMA's oracle processed over 34,000 assertions, boasting an impressive 98.6% resolution rate without a single dispute! Yet numbers only tell a fraction of the tale. Oval blazed new trails in MEV capture, and oSnap redefined the landscape of DAO governance. This set the standard for bringing truth on-chain.
UMA's Optimistic Oracle (OO) addresses a key blockchain challenge: bringing real-world data on-chain in a decentralized, secure, and scalable way. Unlike other oracles focused on price feeds, the OO specializes in verifying inter-subjective truths, such as geopolitical outcomes and complex financial data, using a unique "truth by consensus" method.
The OO is the first successful use of the Schelling Coin mechanism from Ethereum's whitepaper. This innovation has made the OO a core part of InfoFi, especially in prediction markets, where it has set the industry standard. In 2024, Polymarket trusted UMA’s OO to secure over $3.6 billion in market volume during the U.S. presidential election.
The Optimistic Oracle elevated Polymarket by providing a sophisticated framework for verifying the outcomes of real-world events. This synergy fortifies Polymarket’s capacity to deliver precise and trustworthy predictions in a decentralized ecosystem.
UMA’s oracle empowers users to challenge inaccurate data, establishing a trustless and transparent system for resolving disputes surrounding event results. This guarantees the integrity of predictions, particularly for high-stakes or controversial subjects such as elections or sports.
Let's see the numbers! A growth to nearly 2,000 unique validator addresses, strengthening the decentralization. Over 34,000 assertions processed with an impressively low 1.4% dispute rate, and a reveal-to-commit ratio to 91%! These metrics show that the economic incentives are working as intended, making truth-telling not just the right choice, but a profitable one.
UMA’s Optimistic Oracle (OO) successfully resolved the largest prediction market of the year, the U.S. presidential election, with over $3.6 billion in market volume on Polymarket, without any issues. It also secured more than 500 other high-stakes election markets during the peak of the election period and protected nearly $2 billion in value on-chain.
The OO now secures Vega Protocol’s Points Markets, showing its versatility in supporting new DeFi projects. It also expanded to Base, providing builders on this growing network with a flexible oracle system, and solidifying UMA’s presence in the Layer 2 ecosystem.
Last year was a pivotal year for oSnap, as it evolved from an experiment to a standard feature in the Snapshot ecosystem. By connecting offchain voting with onchain execution, oSnap has changed how DAOs operate, automating governance to make it more accessible, efficient, and secure.
Beyond the metrics, oSnap's real impact is in its smooth integration with Snapshot and Safe. What was once hidden in settings is now a default feature, available when opening a new Snapshot space. This shift reflects our vision of governance tools as a public service, offering powerful capabilities with minimal friction or cost.
UMA's optimistic oracle brings reliable data onchain, and the status quo changed with the Oval launch! The first oracle value aggregation layer aimed at helping lending protocols capture up to 90% of their Oracle Extractable Value. While facing resistance from established oracle providers who later launched similar solutions, Oval sparked an important industry conversation about OEV capture and its role in protocol sustainability.
Oval deployed on Morpho and supported Redstone price feeds, and proved the concept with 28 live liquidations. It captured $8,502 in test liquidations, proving its viability. The impact goes beyond its technical achievements.
It raised awareness about OEV leakage in DeFi and pushed the industry to address it, validating our vision that OEV capture is essential for sustainable DeFi. Oval's legacy is transforming how the industry views value capture in liquidations.
But how was 2024 for PVM as a voter? I embraced the decentralized mechanism where $UMA token holders resolve disputes by voting on data validity in the Optimistic Oracle since day one! This process ensures accurate data for DeFi applications while rewarding participants with $UMA tokens.
Slashing is part of the game, but my target is to keep my ratio as high as possible. Even if those 9 votes that didn't go for the correct outcome... my ratio is still at 98.20%, and the earnings based on participation is already at 462 $UMA tokens!
In UMA’s voting system, participants who cast votes that align with the majority on disputes are rewarded with $UMA tokens. This system is designed to motivate voters to carefully research the dispute and make informed decisions. When you vote, you stake your $UMA tokens as collateral to back your choice.
Voting involves the entire community of $UMA holders, making it an open, transparent, and democratic process. This ensures that decisions are fair and based on collective agreement rather than individual interests.
Whether you’re a seasoned crypto user or new to UMA, voting offers a way to earn rewards while playing a crucial role in decentralized governance and the growth of the UMA ecosystem. Just keep in mind slashing is part of the game!
I've got slashed 9 times in 500 votes, and two of those came recently. It's not an issue as the staking rewards are making it not a big deal. With an APR between 25% and 30% it takes few days to get that $UMA back!
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