A new blockchain start-up called ‘We’re Definitely Not Dogs Finance” is looking to raise capital and diversify its treasury by issuing Range Tokens, collateralized by their native token ($BISKT) and with an expiration date of 10 months.
WDNDF sets its contract terms. They issue 1 $BISKT token as collateral for each range token with a lower bound of $10 and an upper bound of $20 (1 $BISKT is the maximum amount of tokens an investor will receive, regardless of price)
To generate interest from investors, WDNDF decided to offer its range tokens at a discounted price of $0.92 USDC, which reflects a 10% APY over ten months.
Being the opportunistic investor that he is, John decides that these range tokens are a deal that he absolutely can not pass up and quickly pulls the trigger on his investment.
If the price of $BISKT falls below the lower bound price of $10, John has exposure to a $10 put option and consequently earns an APY lower than 10%
If the price of $BISKT rises above $20, John has exposure to a $12 call option and consequently earns an APY greater than 10%

DX DAO currently has a liquid treasury balance of 76.9M, of which 39.6M is held in their native governance token $DXD

Floor Payout — the minimum number of $QUARTZ the KPI option will payout. - Identified in this case study as 0.5 $QUARTZ
Maximum Payout — the maximum number of $QUARTZ the KPI option will payout - Identified in this case study as 5M $QUARTZ
Floor TWAP — the minimum quarterly TWAP that would reward the floor payout - Identified in this case study as ≥10M
Maximum TWAP — the maximum quarterly TWAP goal that would reward the maximum payout - Identified in this case study as ≥50M
Base Payout — Equivalent to the payout that would be received from a regular LM program (1:1 redemption)
Base TWAP — The liquidity TWAP that would be expected under normal circumstances with a standard LM program - Identified in this case study as ≥30M
Expiry — The date when the quarterly TWAP liquidity is measured - Identified in this case study as the end of the quarter following the start of the program.

Requestors - Any smart contract or system that submits a request for data. The requestor posts a reward offer which is then accepted and fulfilled by a Proposer. Incentive: Data service
Proposer - An off-chain actor who proposes an answer to a data request. For a proposer to accept a request, they’re required to stake a proposal bond as a form of a security deposit to ensure the legitimacy of the data. Once proposed, there is a pre-determined grace period during which the requestor can dispute the proposal's validity. If the proposal were proven invalid, the proposer would lose its staked security deposit. Incentive: An honest actor has nothing to worry about and is incentivized by the requestor’s reward offer.
Disputer - An off-chain actor who has the power to dispute proposals. The ideal and most common scenario is when a proposal is created, the dispute period comes and goes without the disputer needing to do anything. In the event where a disputer disagrees with the proposal, the disputer matches the proposer's bond with a bond of their own, and the case gets escalated to the DVM (mentioned below). Incentive: If a disputer can prove that the data relayed by a proposer is wrong, they’re rewarded with the proposer’s bond.

UMA’s DVM aims to create a consistent environment where the Cost of Corruption (CoC) is always greater than the Profit from Corruption (PfC). The first step in achieving this is by identifying and measuring the CoC. When a dispute gets escalated to the DVM, $UMA token holders reference the price identifier’s UMIP to calculate and vote upon the data they believe to be correct. The vote is taken place on UMA's Voter dApp. By utilizing a governance-based approach for disputes, the CoC consequently becomes the cost of buying a majority share of $UMA tokens for voting (51% minimum).
The next step is identifying how much a malicious actor could gain from corrupting a data feed.UMA requires all project integrations that use the optimistic oracle to register with the DVM and report the maximum potential loss they could face from an attack. The DVM then aggregates all individual values and measures the total potential profit from corruption.
Once the DVM calculates the CoC & potential profit from corruption, the logical next step is to establish a mechanism that continuously measures the cost to profit ratio and enforces a higher cost. The DVM does this with a variable-fee policy used to consistently rebalance the ratio through $UMA token burns and buybacks as its market cap fluctuates.

(35 million) tokens are currently held by individuals on the Risk Labs team.
(10 million) are held in the Risk Labs treasury.
(15 million) are held by other investors.
(3 million) are deployed as Grants/Liquidity Mining
(2 million) are deployed through AMM and market making distribution.
(35 million) are held by the UMA DAO.
Inflation Rate: The total supply increases by 0.05% every time there is a DVM vote.
Current total supply of 107M tokens with a circulating supply of 66M (62%)

It’s important to note that UMA's current live products serve more as a proof of concept to showcase its potential.
UMA is a relatively new protocol with a complex architecture that will take time to mature and find its market fit as it becomes more understood.
Due to UMA's flexible architecture, a number of interesting use-cases are emerging, such as Opium using UMAs Optimistic Oracle to offer insurance for space X launches.
UMA is looking to expand beyond the scope of creating accessible financial instruments. There are currently three other live products, including Across, a cross-chain bridge protocol. More information on these products can be found here

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UMA: Modern Incentive Structures