UMA ETH-BTC experiences first successful liquidation

Two weeks ago, UMA’s launched ETHBTC, the protocol’s first synthetic token that utilizes a priceless design (tokens that don’t require an on-chain price feed). According to UMA and verifiable on Etherscan, the ETHBTC token – whose value tracks the relative value of ETH to BTC – experienced its first liquidation without any disputes.

Why it matters:

• The oracle problem is still one of crypto’s most pressing challenges and relying on on-chain price feed presents various issues for smart contracts.
• UMA’s “priceless” synthetic token model provides a liquidation mechanism that allows anyone to liquidate an undercollateralized position. The first liquidation without disputes is an early win for the priceless model which requires an oracle only when liquidation is disputed.
• It’s important to note that this is only one outcome regarding one token and UMA’s model is a continued experiment. However, Synthetic tokens present the ability for significant value creation and as the model succeeds, more synthetic assets may be presented by the UMA community.

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