A couple of sturdy ideas to build with UMA at HackMoney2022 and beyond
By John Shutt
Tl;dr: We’re midway through HackMoney2022 with hackathon submissions due next week. The team at UMA shares here a couple of sturdy ideas for hackers to use to build on UMA at the event or beyond, including a zero-slippage, gas-less optimistic DEX and token floor price guarantees using KPI options.
HackMoney 2022 hackathon submissions are due Tuesday and judging taking place on Wednesday.
The all-virtual event, involving 800 hackers competing for more than $300,000 in prizes, provides builders the chance to make their mark on the DeFi ecosystem alongside developers and creatives from around the world.
We thought this would be a good time to share a couple of strong ideas to inspire and guide hackers to build a novel product with UMA’s optimistic oracle (OO).
But first, let’s explore UMA and its OO
UMA is an optimistic oracle (OO) that can provide and verify any arbitrary data on-chain.
UMA’s optimistic oracle has been called “a human-powered truth machine.” Data from UMA secures markets and smart contracts across Web3, expanding the developer design space. The OO tells smart contracts “things about the world” so they can enforce real-world payout conditions. UMA’s OO provides human-powered data dispute resolution between smart contracts.
Proposed data will not be scrutinized unless it is disputed, and disputes are rare. That’s what makes our oracle optimistic.
Across and Polymarket represent two popular use cases for the OO.
Join the hackathon and earn prizes
As part of the hackathon at HackMoney2022, UMA will be awarding $8,000 in total prizes to teams that build the most interesting use cases with UMA’s OO.
The best use case for the optimistic oracle will win $5000, and $3000 will be awarded to the runner up. The winners could also be eligible to receive a further grant if you continue building using UMA.
The hackathon project submission deadline is Tuesday, May 24 at 3pm PDT, and judging takes place Wednesday, May 25 with winners announced on Friday, May 27.
The opportunities for the OO are limitless, but here are a couple of well shaped ideas to get the creative juices flowing. These ideas represent products that could be built at this hackathon or at any point, by anybody, thereafter.
Build a zero-slippage, gas-less optimistic DEX
You could use UMA to build a zero-slippage gas-less optimistic DEX, where assets are swapped within a smart contract based on orders published by users, but bundled and executed on-chain by relayers. Like with Across Protocol, the other side of the trade can be provided out of the relayer’s pocket and the relayer can get paid back (plus fees) after a challenge window. This is basically adapting the Across relayer pattern for swaps.
Unlike other DEXes, it doesn’t matter if you have liquidity in the swap contract because the price is provided optimistically by the relayer or specified in the order. You can get the price from any good source, even an aggregated price from multiple centralized or decentralized exchanges, or let the user specify what they’ll accept.
The user could also specify limits, stops, expiration times for execution, if -> then conditional flows, and any other requirements, all in the order that gets published off-chain somewhere and then executed by the relayer.
For extra points you could integrate this with Across Protocol for zero-slippage cross-chain swaps. The simpler version, for a hackathon proof-of-concept, could simply allow optimistic relayer execution against a pool contract where traders deposit their funds and then post orders later.
Establish token floor price guarantees with KPI options
You could use UMA’s KPI options to provide a floor price guarantee for buyers of a new token during a token generation event. The initial version of this idea was originally tweeted by @EthAsp0rts.
Token prices can be very spiky, especially in the weeks and months after a token generation event, so a “floor price” KPI option can reassure early buyers and smooth out trading on the lower end.
In this scenario, the buyers receive both the token and an additional LSP token that represents a claim on some ETH, BTC, or stablecoin that the project team raised during initial funding. If the regular token price drops below a certain level, they get a bigger payout from the LSP token. This gives buyers confidence that they retain some minimum value if the token price trends downward.
This is a powerful use case that can easily be implemented using UMA’s existing contracts, which makes it a great hackathon project. It would be even more interesting if it was incorporated into a comprehensive fundraising strategy for a new DAO or protocol issuing a token, which could include success tokens, outcome-based KPI options issued to specific teams, or other clever applications of UMA’s contract systems.
Tell us more about what you want to build via Twitter or join us on Discord and keep an eye on UMA’s Twitter for more details during the hackathon, and we’ll see you there, virtually.
