What is UMA
UMA stands for universal market access and is a decentralized protocol for creating synthetic markets and assets that are globally accessible. It provides a framework for users to create synthetic derivatives on the Ethereum protocol. It allows any 2 users into a financial contract one that does not rely on a centralized entity to enforce. One that is secure with economic incentives alone and is, therefore, self-enforcing and universally accessible. UMA allows for a bespoke financial contract that is typically only accessible by institutions or regulated entities, to be created and be accessible by anyone in the world. This also bypasses all of the considerable amounts of paperwork and legal ramifications that are required to structure these types of deals. UMA allows for simple and complex agreements to be P2P, without the need for a broker or clearinghouse, no need for layers or laws for that matter. A contract purely governed by code. UMA defines an open-source protocol that allows for any two counterparties to design and create their own financial contracts. This is all through the use of completely trustless and decentralized Ethereum smart contracts. Each UMA contract comprises of 5 separate components: Public addresses of all the counterparties, margin accounts for each of the counterparties, economic terms to calcuate the value, smart contract functions to maintain the margin balances, an oracle that will provide secure and verified off-chain data.