Decentralized finance’s UMA has surged 100 percent in a week as per CryptoSlate data. In a week where most crypto assets experienced strong corrections, with Bitcoin and Ethereum leading altcoins lower, UMA’s performance is a breath of fresh air.
But why is the coin up so much in the matter of a week? What factors have allowed it to dramatically outpace a falling crypto market, which has been compounded by weakness in legacy markets like the S&P 500 and the Nasdaq?
#1: Listing on Coinbase
First are foremost, this week, Coinbase
announced that it is listing the decentralized finance-focused coin on its professional trading platform. The coin has not yet launched for trading, but will soon be. Coinbase will later list the coin on its retail platform if UMA is received well.
UMA is benefiting from what is known as the “Coinbase Effect,” when coins listed by the exchange rally because Coinbase is their first reliable venue of investment and liquidity.
The Coinbase Effect is exacerbated during bull markets as retail investors can easily access new coins supported by the company.
#2: Development activity is booming
According to Santiment, a blockchain analytics firm, development activity for UMA has been booming.
Trailing only a few other projects, UMA was the ninth-most developed ERC-20 coin in August as investors have been building out the cryptocurrency and its respective ecosystem.
A comment from the UMA team reads:
“Not only has liquidity mining resulted in more eyes on the project and a healthier community, but it has also shown that these contracts can really hold the weight of funds.
“We are working closely with a handful of development partners, both established and up-in-coming, to roll out new products in the start of Q3, including a way to permissionlessly leverage Bitcoin.”
#3: SushiSwap & other forks are buoying UMA
SushiSwap, along with other Ethereum-based decentralized finance protocols, is providing a bid for UMA.
The way in which many recent DeFi protocols have been structured is to have a governance token that can be minted by depositing Uniswap liquidity. More often than not, UMA has been a supported pair.
That means that investors that want to mint the governance token of these DeFi protocols, they will need to purchase UMA or another coin.
#4: All ships rise in DeFi
Although DeFi is undergoing a correction as of this article’s writing, the space is on a longer-term uptrend.
As UMA will likely be core to this segment of the crypto and blockchain market like other top protocols, the coin is benefiting from investors opening long-term positions in the space, thus resulting in buying pressure for the cryptocurrency.
The post Here are four factors that have pushed DeFi coin UMA up 100% in a week’s time appeared first on CryptoSlate.
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