DeFi protocols are pairing up at an unprecedented rate, and the latest collaboration is between Yam Finance and the UMA platform.
Yam Finance was one of the first to catalyze the DeFi food farming frenzy that gained massive popularity in the third quarter of this year. After a shaky start, the protocol has moved on and its latest development is a collaboration with Universal Market Access contracts platform UMA.
In November, UMA announced a developer mining incentive that allowed developers to earn ownership in a network that they help to create. The platform intends to leverage this program in conjunction with Yam Finance in order to launch ‘degen derivatives’ which will begin with its synthetic gas token, uGAS.
Stepping on the uGAS
UMA’s uLABS division, which operates all of its financial products, will be handing over its gas futures token, uGAS, to Yam Finance. The synthetic uGAS token aims to address the Ethereum gas price volatility issue by allowing users and providers of gas to lock in their costs or revenue.
“The uGAS token can act as a hedge for these natural users, but can easily be used as an instrument for speculating on gas prices as well.”
Yam will now be managing uGAS with the aim of improving the user interface, marketing the product, launching new contracts, and ensuring collateralization.
Additionally, UMA’s developer mining rewards will also be transferred to Yam Finance management and distributed to developers and liquidity providers. The two protocols will have closer ties with governance, the blog post added;
“It is expected that the YAM treasury will hold their UMA tokens and establish a position within UMA’s governance, as traditionally this has been done with other governance tokens they have mined.”
YAM and UMA Price Updates
Prices for Yam Finance’s native YAM v2 token are down 3.5% since its daily open as the broader crypto market accelerates its correction. The token is currently trading at $5.40 following a fall from a weekly open of $6.35.
YAM skyrocketed to almost $50 in early September when the protocol and yield farming was launched. However, like most of its DeFi brethren, the token has dumped 88% to its current levels. Further declines are likely unless the overall market can bounce and continue its uptrend.
UMA token prices are also down by 4% from its daily open, trading hands for just under $7 at the time of press. The token is down 66% from its September high of $20.30.