UMA token staking is live — Here is how you participate
Tl;dr–UMA’s DVM (Data Verification Mechanism) 2.0 upgrade vote has passed governance. A package up upgrades have taken effect, and notably UMA token-staking is now live. If you’re ready to stake, go to vote.uma.xyz and get started. You will stake your tokens in order to earn protocol emissions and to help secure the UMA oracle by participating in votes.
What is UMA?
UMA is the first optimistic oracle connecting smart contracts to any data, anywhere. UMA is the market leader in optimistic oracles, specifically with its emphasis on validating data and serving it on-chain to resolve markets. Unlike price-feed oracles such as Chainlink that require a permissioned and pre-validated data feed to operate, UMA’s optimistic oracle can validate any data.
This upgrade to the DVM 2.0 is a historic event in UMA’s history, and will make the oracle more robust and user-friendly.
Introduction to UMA Staking
Until now, UMA voting has been based on a snapshot of token balances held in your wallet. Today that changes to a staking model, where tokens are staked in order to earn or vote. Staked tokens will earn a portion of protocol emissions, but also have some exposure: incorrect or idle voters will have small penalties, and there is a 7-day cooldown for withdrawals. More skin-in-the-game ensures deeper protocol-tokenholder alignment.
This update follows the approval of UMIP-173 — A proposal put forward by the Risk Labs foundation to update the UMA protocol.
We have a series of events coming up around token staking:
Staking Calendar
March 2, 2023 — New voter dapp, product website, and token staking live
March 6, 2023 — Educational event in the UMA Discord 16.00 UTC
March 6, 2023 — Stakening event in the UMA Discord 18.00 UTC
March 8, 2023 — Governance proposal to turn on protocol emissions
March 11, 2023 — Approximate date emissions begin
As you’ll notice, there is a separate event for when protocol emissions will be turned on. This means that for the first week of UMA staking, there will not be any rewards. This is being done to make rewards distribution as fair as possible, by giving all participants ample opportunity to participate in staking before rewards are distributed.
Staking and Voting Instructions
The voting system will work similarly as in the past, with 24-hour commit-and-reveal periods. If you’re unfamiliar with the commit/reveal pattern, read this first. Here are the instructions for how to both stake your tokens and vote on a dispute.
Stake
- Go to vote.uma.xyz and click “Stake/Unstake”
2. Enter the number of $UMA tokens you’d like to stake.
3. Click “Approve.” After the UMA spend approval has been mined, click again to stake your tokens. Keep in mind that withdrawing those tokens triggers a 7-day cooldown, where your tokens are exiting the system and are not earning rewards during that time.
4. Normally staked tokens will immediately start accruing UMA rewards. During the first week of staking however, there are no rewards to ensure fairness of participation.
5. At the same time, your responsibility to respond to votes begins. If there is a dispute sent to the Data Verification Mechanism (DVM), you need to vote accurately. Each vote triggers a small penalty on incorrect (or idle) voters and transfers it to correct voters. This mechanism is separate from the streamed emissions, which are continuous regardless of voting cadence or performance.
Vote
1. When there is a dispute, you will be able to see the new vote under “Upcoming votes” next to a countdown timer indicating when the next commit round begin
2. To learn more about an upcoming or current vote, you can clicking “more details” which opens up a panel with additional vote information.
3. To commit your vote, enter a value in the “Your vote” box and click commit. Note that the first time you use a new wallet/browser combination you will need to sign a message before proceeding. Once committed, you will see your vote status change to “Committed.”
4. To reveal, simply click “Reveal”
5. That’s all. Once the reveal period is complete, you may return to check the outcome of the vote as well as, under “Vote history”, your APY based on your voting performance.
UMA Token Staking is just the start of UMA 2.0
The staking upgrade is just one part of a larger upgrade of UMA’s Data Verification Mechanism (DVM). These upgrades include:
- Minority voters are no longer penalized in governance votes
- Improved voter delegation
- Gas optimizations and spam proofing
— To learn more, check the FAQ and summary.
UMA secures protocols that require data that does not fit comfortably into an automated data-feed, such as natural language questions (e.g., “Did Jennifer Coolidge in White Lotus win an Emmy for her performance?”)
UMA is the largest oracle in Web3 + DeFi that does not resolve to a multi-sig. This was core to the design philosophy of UMA from the beginning, and in fact it was built in 2020 specifically because there was no robust and decentralized oracle choice on the market.
As UMA 2.0 continues to unfold over the year, UMA’s optimistic oracle will grow even stronger and easier to use. Token staking is just a part of the series of upgrades coming with UMA 2.0. Next you will see oracle interface imrpovements, followed by a reworking of the game theory and security principals underlying the protocol. Stay tuned by following UMA on Twitter.
New to UMA?
Optimistic oracles like UMA are very much a nascent technology in Web3, with most use cases not yet discovered let alone deployed. If you want to be a part of this innovative technology as a voter, you can obtain tokens on any of these markets.
