DeFi platform UMA crosses $1B in market capitalization

According to the latest data from Coinmarketcap, UMA token is ranked second after Chainlink's LINK token with $1.07B in capitalization.

By · Sep 4, 2020 . 5min read

UMA Defi

The UMA project, a DeFi platform barely launched in April after its DEX offering on Uniswap has crossed $1B market capitalization. This makes it the second core DeFi project to reach this milestone barely days after Aave set the record.

According to the latest data from Coinmarketcap, UMA token is ranked second after Chainlink’s LINK token with $1.07B in capitalization.

DeFi platform UMA cross $1B in market capitalization
Source: DeFi on Coinmarketcap

Aave’s LEND was the first DeFi token to reach $1B valuation doubling in market capitalization within one month from barely $400 million at the beginning of August. LEND has since fallen to 4th position as it market caps corrected to $855M

UMA, on the other hand, builds infrastructure for “priceless” financial contracts such as DeFi contracts that minimize oracle usage. This helps in avoiding many of the security and scalability issues in DeFi.

UMA’s infrastructure comprises two main parts: priceless financial contract designs and Data Verification Mechanism (DVM). While the former allows users on the platform to create synthetic tokens, DVM acts as a decentralized oracle service like Chainlink.

Evidently, Chainlink’s rally continued for a while securing it a top spot as one of the most capitalized ERC20 tokens. UMA is one of the surprising DeFi projects to reach this vast market capitalization.

UMA launched through Uniswap listing pointing towards the DeFi boom we see today

Additionally, UMA is an acronym for Universal Market Access. It removes barriers to access for every financial market, creating a global marketplace to buy and sell financial risks. Risk Labs is the team managing UMA with Coinbase, Blockchain Capital, Dragonfly Capital etc. as backers. UMA released 2% of its tokens through decentralized exchange Uniswap at the same price offered to seed investors. However, since there were no UMA tokens in the market, the price could only increase after listing, which caused it to 10x almost immediately. Consequently, it was one of the earliest signals of the present DeFi boom.

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