Coins: 14,581
Exchanges: 1,107
Market Cap: $2.715T 1.8%
24h Vol: $88.015B
Gas: 12 GWEI
Go Ad-free
Podcast
TABLE OF CONTENTS

How Oracles can be Optimistic with Hart Lambur, Co-Founder of UMA - Ep. 67 Podcast Notes

4.5
| by
Lau Jun Sheng
-

UMA

UMA is an optimistic oracle that can get any type of verifiable data onto any blockchain. Anyone can ask the optimistic oracle any question and is guaranteed a truthful answer through game theory and incentive mechanism design. UMA is similar to the decentralised prediction market, Augur. The main difference between UMA and Augur is that it is not just integrated with prediction markets so any developer can use it. 

Hart Lambur 

Hart Lambur co-founded UMA in 2018. Lambur studied computer science at university and was a bond trader at Goldman Sachs during the financial crisis. He learnt about Bitcoin through Coinbase co-founder Fred Ehrsam. 

 

Ep.67 Podcast Summary / Notes

How to ensure the information provided is accurate and not malicious 

  • Optimistic concept - Any contract can ask any question 

    • i.e. Who won the soccer game/ election/ price of X

  • Anyone on the blockchain can answer the question 

    • Once the responder provides information, a challenge period starts 

    • If nobody says the information is wrong, it gets taken as true

  • If someone raises a dispute, a Schelling point voting system is conducted by UMA token holders 

    • The vast majority of oracle requests are resolved at the optimistic level 

    • Very few disputes to do extra work on 

  • Similar concept as lazy evaluation in computer science 

    • If I don’t need to do extra work to prove what the outcome is, I won’t 

    • A cheap and easy solution to the oracle problem

 

What happens when people raise a dispute 

  • Disputes occur infrequently but not never 

    • 1-4 disputes per month 

  • Examples revolve around technical details or situations when there is more than one reasonable outcome 

    • The goal of the system is to figure out what the most reasonable outcome is 

    • Similar to dispute resolution in the legal court system 

 

Is it possible for market participants to be irrational and is UMA able to resolve it? 

  • Layers of dispute resolution

    • 1st layer requires 1 honest participant 

    • Don’t need everyone to be economically rational 

    • 2nd layer Requires UMA token holders to vote 

    • Schelling point voting system - everyone votes in secret - the system is designed such that  people vote for the truth 

  • Requires half of the voters to act irrationally for the system to fail

    • Similar to the 51% attack concept; Not impossible but highly improbable 

    • Voters are incentivised to vote as they are rewarded when they participate in the voting process
       

Non-Optimistic Oracles vs Optimistic Oracles

  • Non-optimistic oracles 

    • Reporting the prices of centralised exchanges truthfully

    • But exchange data can still be manipulated 

  • Optimistic oracles 

    • Community members are able to dispute if exchange data has been manipulated

    • However, requires time for users to react and engage in dispute process

  • Trying to deliver truths in real-time is very hard

    • Part of the tradeoff with optimistic oracles is due to the dispute process 

    • UMA’s trade-off is the speed of information for potential recourse and the ability to undo 

 

What role does the UMA token play in the ecosystem

  • UMA 

    • The voting token 

    • Inflationary rewards for voters 

    • Many systems require effective tokenomics to function properly

 

UMA Products relating to KPI Options

  • Previously created KPI Options to help DAOs motivate communities 

  • Rebranded KPI Options to Outcome Finance 

  • KPI Options are synthetic tokens that can track anything using UMA Oracle

  • KPI Options

    • Token that a DAO collateralised with their project token

    • Get a long and short derivative token 

    • DAO keeps one side - the other side is given away via airdrop

    • Able to program payout under certain conditions   

    • i.e. TVL or Volume target

    • e.g. Once a certain TVL target is achieved, community holders of the token will receive additional rewards via airdrop

    • Hence, holders of KPI options are incentivised to achieve community’s goal 

  • Tagline: Help your DAO achieve a positive outcome 

 

What does the oracle industry look like 

  • Oracle - get some data that doesn’t exist on the blockchain 

  • Smart contracts are only useful if they know something about the world that doesn’t exist on the blockchain 

    • Compound / Aave need to know the USD price of digital assets for liquidation 

    • Easy to answer questions in a centralised manner but defeats the purpose of using a blockchain 

    • Doing it in a decentralised manner is largely underappreciated 
       

What kind of role would oracle play in cross-chain and interoperable blockchains? 

  • Difficulty in getting information across chains in a decentralised manner 

    • Optimistic oracles are a lightweight and cheap way of getting information 

    • Non-optimistic oracles are either very expensive to operate or centralised 

 

What is an underrated issue oracles solve? 

  • Multisigs are lazy shortcuts developers in web3 are using instead of using a decentralised alternative 

  • Upcoming product on Outcome Finance: Optimistic governance - Attempt to replace multisig using optimistic oracle

 

Alfa

  • Across Finance 

    • Cross-chain protocol community is launching a token and referral program 

    • Users of the protocol gain ownership by referring it to others. 


 

CoinGecko's Content Editorial Guidelines
CoinGecko’s content aims to demystify the crypto industry. While certain posts you see may be sponsored, we strive to uphold the highest standards of editorial quality and integrity, and do not publish any content that has not been vetted by our editors.
Learn more
Want to be the first to know about upcoming airdrops?
Subscribe to the CoinGecko Daily Newsletter!
Join 600,000+ crypto enthusiasts, traders, and degens in getting the latest crypto news, articles, videos, and reports by subscribing to our FREE newsletter.
Tell us how much you like this article!
Vote count: 2
Lau Jun Sheng
Lau Jun Sheng
Jun Sheng is a research intern and is an avid gamer, degen, memer, sleeper. Follow the author on Twitter @jnshngl

More Articles

Select Currency
Suggested Currencies
USD
US Dollar
IDR
Indonesian Rupiah
TWD
New Taiwan Dollar
EUR
Euro
KRW
South Korean Won
JPY
Japanese Yen
RUB
Russian Ruble
CNY
Chinese Yuan
Fiat Currencies
AED
United Arab Emirates Dirham
ARS
Argentine Peso
AUD
Australian Dollar
BDT
Bangladeshi Taka
BHD
Bahraini Dinar
BMD
Bermudian Dollar
BRL
Brazil Real
CAD
Canadian Dollar
CHF
Swiss Franc
CLP
Chilean Peso
CZK
Czech Koruna
DKK
Danish Krone
GBP
British Pound Sterling
GEL
Georgian Lari
HKD
Hong Kong Dollar
HUF
Hungarian Forint
ILS
Israeli New Shekel
INR
Indian Rupee
KWD
Kuwaiti Dinar
LKR
Sri Lankan Rupee
MMK
Burmese Kyat
MXN
Mexican Peso
MYR
Malaysian Ringgit
NGN
Nigerian Naira
NOK
Norwegian Krone
NZD
New Zealand Dollar
PHP
Philippine Peso
PKR
Pakistani Rupee
PLN
Polish Zloty
SAR
Saudi Riyal
SEK
Swedish Krona
SGD
Singapore Dollar
THB
Thai Baht
TRY
Turkish Lira
UAH
Ukrainian hryvnia
VEF
Venezuelan bolívar fuerte
VND
Vietnamese đồng
ZAR
South African Rand
XDR
IMF Special Drawing Rights
Cryptocurrencies
BTC
Bitcoin
ETH
Ether
LTC
Litecoin
BCH
Bitcoin Cash
BNB
Binance Coin
EOS
EOS
XRP
XRP
XLM
Lumens
LINK
Chainlink
DOT
Polkadot
YFI
Yearn.finance
Bitcoin Units
BITS
Bits
SATS
Satoshi
Commodities
XAG
Silver - Troy Ounce
XAU
Gold - Troy Ounce
Select Language
Popular Languages
EN
English
RU
Русский
DE
Deutsch
PL
język polski
ES
Español
VI
Tiếng việt
FR
Français
PT
Português
All Languages
AR
العربية
BG
български
CS
čeština
DA
dansk
EL
Ελληνικά
FI
suomen kieli
HE
עִבְרִית
HI
हिंदी
HR
hrvatski
HU
Magyar nyelv
ID
Bahasa Indonesia
IT
Italiano
JA
日本語
KO
한국어
LT
lietuvių kalba
NL
Nederlands
NO
norsk
RO
Limba română
SK
slovenský jazyk
SL
slovenski jezik
SV
Svenska
TH
ภาษาไทย
TR
Türkçe
UK
украї́нська мо́ва
ZH
简体中文
ZH-TW
繁體中文
Login to track your favorite coin easily 🚀
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Forgot your password?
Didn't receive confirmation instructions?
Resend confirmation instructions
IT'S FREE! Track your favorite coin easily with CoinGecko 🚀
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Password must contain at least 8 characters including 1 uppercase letter, 1 lowercase letter, 1 number, and 1 special character
Didn't receive confirmation instructions?
Resend confirmation instructions
Forgot your password?
You will receive an email with instructions on how to reset your password in a few minutes.
Resend confirmation instructions
You will receive an email with instructions for how to confirm your email address in a few minutes.
Get the CoinGecko app.
Scan this QR code to download the app now App QR Code Or check it out in the app stores
coingecko
Continue in app
Track prices in real-time
Open App