The native token of the Uma protocol saw a dramatic jump in price after it teased a potential plan for a solution centered around protecting lending protocols from maximal extractable value (MEV).
The Uma token experienced a 90% surge in price following the announcement, rising from $2 to its current price of $3.80, according to The Block’s Price Page. Uma’s market capitalization has reached close to $300 million, its highest point since mid-2022.
Details about the proposed MEV solution, known as Oval, remain limited at this stage. However, Uma has indicated that this product will focus on protecting lending protocols. The introduction of this solution is anticipated next week, according to Uma co-founder Hart Lambur.
MEV is a concept in blockchain technology where those involved in the block production process earn extra income by reordering transactions to suit third parties. According to Uma, lending protocols annually lose substantial amounts — estimated in the tens of millions of dollars — due to MEV.
The upcoming launch aims to address this issue, as implied by Uma’s statements about reclaiming lost value. “Each year lending protocols lose tens of millions of dollars to MEV. It’s time to reclaim that value,” the project stated on X.
Uma’s existing products
Uma began as an Ethereum-based DeFi protocol focusing on synthetic assets. Now it mainly operates an optimistic oracle product, enabling users to verify data on-chain through economic incentives and dispute resolution.
Uma’s price surge occurred despite the overall crypto market experiencing a downturn. It has decreased by 2.3% in total market capitalization in the last 24 hours and is now valued at $1.71 trillion. Bitcoin is currently trading around the $41,000 mark, reflecting a slight pullback from its recent upward trajectory.
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