How to Vote with Your $UMA Tokens—Earn Up to 30% APR
Introduction
With $UMA, you hold more than just a token—you hold the key to onchain truth.
In a world full of misinformation, we need a trustworthy, decentralized way to ensure the integrity of onchain data. UMA Protocol is the perfect solution for this problem, and the key to its success is the $UMA token.
By staking and voting with your $UMA tokens, you help power UMA’s Optimistic Oracle and secure its ability to validate information onchain accurately. In return, you can earn up to 30% APR.
In this guide, we’ll show you how UMA voting works, why you should participate, and how to start staking and voting today.
Key Takeaways
Voting secures onchain truth: UMA relies on its community to stake and vote with $UMA tokens, validating and securing onchain data for DeFi protocols, especially prediction markets.
Community-driven dispute resolution: UMA functions like a decentralized courtroom, where voters act as jurors to resolve disputes and verify information, ensuring fairness and transparency in the system.
Economic incentives ensure honesty: Voters are incentivized to participate accurately with rewards of up to 30% APR, while dishonest or inactive voting result in penalties.
Easy steps to stake and vote: Acquire $UMA, stake your tokens, participate in voting rounds, and reinvest your rewards to earn passive income while contributing to the security and integrity of the DeFi ecosystem.
Your Vote Matters
UMA secures countless DeFi applications and over $1 billion in onchain assets. It uses optimistic verification to verify real-world data and record it onchain quickly, efficiently, and accurately.
However, this process doesn’t always go smoothly. Every once in a while, data gets disputed and needs to be resolved. This is where UMA voters come in.
You can think of UMA as a decentralized onchain courtroom, where facts are presented and voters participate as the jury to decide what is right or wrong. Just like how people are assumed innocent until proven guilty in real court, information is assumed true until proven false in UMA’s court.
Anyone can submit a data assertion and anyone can present evidence to challenge it. Just like in a real courtroom, disputes are settled based on the evidence provided to the jury participants who vote on the final outcome. The majority vote determines the result, following the principle known as a Schelling point.
UMA’s job is simply to ensure that this process remains fair.
UMA has successfully verified over 26,000 data assertions onchain, most of which come from prediction market platforms including Polymarket. Since prediction market outcomes can be ambiguous and intersubjective, UMA’s courtroom serves as a robust solution for resolving disputes these types of outcomes.
Note that less than two percent of data assertions sent to UMA are disputed.
Economic Incentives: How UMA Ensures Integrity
Now, you may be wondering how we ensure that voters participate honestly?
The answer is simple: economic incentives.
In order to vote, you must stake $UMA tokens into the Optimistic Oracle. You can then use your staked $UMA to vote on disputes and earn rewards. But here’s the catch: when you vote accurately, you earn $UMA rewards, which you can stake and compound over time. However, when you vote inaccurately, you lose a small portion of your staked $UMA tokens. Inactivity is penalized as well, so make sure you vote!
How to Stake and Vote with UMA
Ready to get started? Here’s a simple guide to start staking and voting with your $UMA tokens:
Get some $UMA tokens: First, you’ll need to buy $UMA if you don’t already have some. You can easily get $UMA from Uniswap, Coinbase, or other major exchanges. Make sure you buy them on Ethereum Mainnet.
Stake your $UMA tokens: Head over to UMA’s voting page, make sure your wallet is connected to Ethereum Mainnet, and deposit your $UMA tokens. This will give you voting power in the system.
Keep an eye out for votes: Voting rounds are announced when there’s a dispute. Make sure you’re signed up for notifications, so you never miss a chance to earn rewards.
Cast your vote: When a voting period opens, you have 48 hours to review the evidence, cast your vote, and wait for the results. Remember to check the vote’s timestamp, especially when verifying prediction market disputes.
Reveal the results: When the 48 hour period concludes, make sure to reveal the results. You must reveal in order to earn your rewards.
Claim your rewards: If you voted correctly, your rewards will be available for claiming. You can choose to reinvest or cash out—whatever works best for your strategy.
Note that since UMA voting operates on Ethereum Mainnet, voting requires you to pay ETH gas. However, we understand that this can be expensive, so we automatically reimburse every single voter at the end of each month, gwei for gwei.
For more information about UMA voting, read our step-by-step documentation.
Why Should You Stake and Vote?
Let’s be real—voting isn’t just about securing the UMA. There’s a tangible financial upside for those who participate.
Earn up to 30% APR: As an active UMA voter, you can earn up to 30% APR on your staked $UMA tokens. That’s a better yield rate than what most DeFi staking protocols offer, making it a solid source of passive income.
Maximize your yield with compounding: Reinvest your rewards to earn even more over time. Let the power of compounding kicks in and work its magic.
Secure the future of DeFi: You’re not just earning yields—you’re part of a growing community that is keeping DeFi secure and transparent.
Closing Thoughts
Participating in UMA’s staking and voting process is more than just a way to earn passive income—it’s an opportunity to contribute towards securing onchain truth. Every time you vote, you’re making DeFi a little more reliable and secure for everyone. Plus, with the potential to earn up to 30% APR, it’s a no-brainer to put your $UMA tokens to work.
The future of onchain integrity is in your hands.
Ready to get started? Stake your $UMA and vote here.
