UMA is open-source infrastructure for deploying and enforcing synthetic assets on Ethereum. UMA enables developers to quickly and easily build synthetic tokens that track the price of anything. UMA offers priceless financial contracts. Priceless financial contracts are smart contracts that only require an on-chain price feed in the event of a dispute. Priceless contracts minimize reliance on oracles, making contracts on UMA less vulnerable to attacks.
UMA's Priceless contracts are designed with mechanisms to incentivize people who mint synthetic tokens (called token sponsors) to ensure that their positions are backed with the appropriate amount of collateral. Taking out a position involves minting a synthetic token, which can be repaid to close the position and return the collateral. Positions are assumed to be solvent unless they are identified as being under collateralized. It is the responsibility of token sponsors to ensure that their positions are always backed by the required amount of collateral. A key mechanism to ensure a position is properly collateralized is a liquidations and disputes process that rewards the liquidation of positions that are under collateralized.
UMA's Optimistic Oracle allows contracts to quickly request and receive price information. The Optimistic Oracle acts as a generalized escalation game between contracts that initiate a price request and UMA's dispute resolution system known as the Data Verification Mechanism (DVM). If a dispute is raised, a request is sent to the DVM. All contracts built on UMA use the DVM as a backstop to resolve disputes. Disputes sent to the DVM will be resolved 48 hours after UMA tokenholders vote on the price of the asset at a given time. Contracts on UMA do not need to use the Optimistic Oracle unless it requires a price of an asset faster than 48 hours.
How to use UMA?
Developers can create their own financial synthetic tokens. You can [get started here, https://docs.umaproject.org/build-walkthrough/build-process].