Contents

• UMA explained
• From the UMA whitepaper
• UMA coin price history
• UMA price predictions
• FAQs

UMA coin is the cryptocurrency that promises to give people ‘universal market access’ – hence the name. Some people believe it is a coin with potential, so we are going to take a look at what the UMA price prediction could be. 

Before we do that, though, we had better tell you what UMA is and what it does.

UMA explained

UMA is a decentralised finance (DeFi) platform that enables users to create synthetic assets using the Ethereum blockchain. DeFi is designed to make it possible for people who don’t have a bank account to access financial services.

Synthetic assets are similar to traditional financial derivatives, which take their value from other underlying assets such as commodities, currencies, precious metals, stocks or bonds. They aim to achieve the same objectives as would be achieved by owning an asset, without needing to hold the actual asset itself.

The UMA token is the native currency of the UMA platform. Holders can vote on so-called UMA Improvement Proposals (UMIPs) and on price requests made to the Data Verification Mechanism (DVM) through the voter dApp (decentralised application).

Those who vote with the majority consensus are granted 0.05% inflationary rewards for participating in governance and, as the UMA team put it, for “helping to keep our oracle secure”.

From the UMA whitepaper

The UMA: A Decentralised Financial Contract Platform founding document is 26 pages long and was published on 3 December 2018. The decentralised protocol was designed to enable the creation, maintenance and settlement of financial contracts for any underlying asset, and is not limited to applications of the UMA coin in the network. Project highlights include:

• “Economic incentives and the transparency of the blockchain” to allow any counterparty to gain synthetic asset exposure. In doing so, UMA contracts eliminate barriers to accessing financial markets and aim to create a single global marketplace. With the rise of DeFi and the ethos of open and permissionless finance, UMA has been seeing steady traction in the market thanks to its ability to launch this type of asset.  

• The UMA Protocol creates synthetic assets called ‘priceless financial contracts’ on Ethereum. These are smart contracts that require an on-chain price feed to determine the underlying value. To ensure that the underlying data quality – and the protocol’s economic value – is maintained, UMA implements various network incentives, including a Data Verification Mechanism (DVM).  

• The five core components of the contract architecture are:
  
  • Public addresses of both counterparties (the maker and taker);
  • Margin sub-accounts: A margin account for each counterparty, accessible only to that counterparty and the contract;
  • Logic to calculate the economic terms of the agreement, known as the net present value (NPV);
  • Choice of oracle for information regarding an underlying asset; and
  • Contract functions to add/withdraw margin balances, remargin, terminate or settle the contract.

UMA coin price history

While prior performance is no indicator of future results, it can still be useful to see how the coin has behaved in the past. If nothing else, it might help contextualise an UMA coin price prediction.

When UMA launched publicly in May 2020, its price stood at $1.16. Although it spent all of June that year higher than its original value, the UMA coin price ended up hovering somewhere between $1.30 and $1.60. In July, things really started moving. UMA started the month at $1.82 and closed it at $4.33 – an increase of almost 140%.

Late August 2020 was a real boom time for the crypto. It was already up to $6.94 by close of play on 26 August but by the end of trading on 1 September it was $24.99, a rise of more than 260% in six days – as well as being almost 500% up on 31 July, and more than 2,000% above May’s original figure. The good times couldn’t last, however, and by 23 September 2020 it was back down below $10.

UMA spent most of the rest of the year between $7 and $9, but things were about to change. The first few months of 2021 were a good time for crypto generally, and UMA got caught up in the rush. It started the year at $7.64, and an intraday high of $10.35 on 4 January was the first time it had broken through the $10 barrier since the end of September. While the price shrunk back, and UMA closed at $8.77 the same day, there was still encouragement for holders.

There were peaks and troughs over the next few days, but on 22 January 2021, it had an intraday low of $10.04, after which the UMA coin price saw a sustained rally above $10. Barring a brief period on 27 and 28 January when it dipped below that mark, UMA looked set to stay in double figures.

It opened 2 February 2021 at $11.21 but, just two days later, it hit an all-time high of $43.37 intraday, a remarkable increase of almost 300%. Although it did not quite stay at that level, closing 4 February at $33.78 and then dropping back to an intraday low of $27.29 on 7 February, the fact that it maintained a level somewhere between $20 and $30 stood in marked contrast to what it had been worth the month before.

Throughout July 2021, it stayed below the $10 mark but a slight rally in August offered hope for investors, with the UMA price hitting an intraday high of $15.28 on 23 August. It then reached $13.23 on 16 September 2021, but that was a highly volatile month for the crypto market as a whole.

In November 2021, UMA launched the Across protocol, after which a 36% value increase was reported, hitting $24.38. However, by 24 November the value had dropped considerably to roughly $14, and further again in December. Many cryptocurrencies struggled over the fourth quarter of 2021 as a result of both imposed and potential regulations, and the Omicron variant of Covid-19 looming large over global markets. January 2022 brought little respite, and by 31 January, the coin was worth $5.95.

Towards the end of February 2022, things started to look up for the coin. After the successful launch of its Across protocol, the coin began seeing glimpses of a recovery, and on 1 March the UMA coin was trading at highs of $12.48. The coin’s big move appears to have come on the heels of a wave of adoption. According to bridging protocol Across, which relies in part on UMA’s oracle, numerous Ethereum whales have been seen using their platform: 

—

Towards the second quarter of 2022, the overall crypto market showed fleeting signs of a recovery, and initially UMA traded well above the $7 mark. However, this price was not sustainable after a devastating crash sent ripples through the market, hinting at threats of a crypto winter. By 12 May, the token was trading at lows of $2.22.

Worse news was to come in the following weeks, and by 14 June the token was trading at lows of $1.88, the lowest value recorded in almost two years. However, there has been some considerable upward momentum in the weeks since then, and the token closed the month of July at $2.88. At the time of writing on 16 August 2022, the token is trading at $3.33.

UMA will need to stay ahead of the competition as the Web 3.0 space matures, so what of the future? What is the UMA price prediction for 2022 and beyond? 

UMA price predictions

DigitalCoinPrice’s UMA price predictions are largely bullish, suggesting the coin will be worth $4.95 in September, and $4.85 by December. The average price of the coin should be approximately $4.70 in 2023, the site says, but $4.62 in 2024. Its UMA price prediction for 2025 is $6.64, down to $5.78 in 2026, but continuing an upward trend to an UMA price prediction for 2030 of $15.33. 

Gov Capital has even more optimistic projections, suggesting the coin will be worth $10.29 in a year’s time and $21.66 in five years’ time.

WalletInvestor’s UMA coin price prediction, on the other hand, suggests the coin will continue on a downtrend and will be worth just $0.41 this time next year. The site does not believe there will be any substantial recovery past that price point.

FAQs

Further reading

Bitcoin (BTC) price analysis: Will the June lows be tested?

Crypto bargains: How to see what crypto whales are buying?

UMA price analysis: a relief rally looks likely

What is UMA? Your ultimate guide