Thread by @UMAprotocol

ETHBTC Synthetic Token is LIVE on Mainnet‼️ This is the first "priceless" synthetic token created using UMA's infrastructure.

You can now bet on ETH outperforming BTC—tokens are on Uniswap v2🦄.

Read on for details + why this is important for #DeFi ...
medium.com/uma-project/et…

First, a warning: this is an experimental release. The code has been audited by @OpenZeppelin but this is a decentralized product that no one—including the core dev team—can control.

**Users should proceed with extreme caution**. This one is for the nerds (for now).

What it does: This token tracks the ETHBTC price ratio and is collateralized in $DAI. It will expire on 1 August 2020. At that time, holders can redeem their tokens for DAI.

Ex: if at expire ETHBTC = 0.03, each token can be redeemed for 0.03 DAI.

Where to get it: ETHBTC is on @UniswapProtocol v2.

uniswap.exchange/swap?inputCurr…

Who can make it? The ETHBTC contract is fully permissionless. Anyone can act as a token sponsor and mint new ETHBTC tokens by depositing DAI (and collateralizing >120%).

A token sponsor who mints+sells ETHBTC tokens is short ETHBTC (they have the opposite risk of token holder).

Why does this matter? This is a **priceless** synthetic token. It does not require an on-chain price feed. Theoretically, the contract may not require _any_ oracle usage until expiry. This is like layer 2 for #DeFi—this can lead to massive scalability.

https://twitter.com/UMAprotocol/status/1242891550872535042

Why ETHBTC as the first synthetic? $UMA token holders voted to approve the components necessary to build this earlier this week. ETHBTC was selected as the first test b/c it's DeFi-centric but not too serious. Enjoy, #DeFi nerds.

Can this be shut down? There are no admin keys or proxy contracts. $UMA token holders can initiate an EmergencyShutdown via an on-chain vote if a security or economic risk is discovered. This process takes at least 48 hrs to process.

What's next? We are excited to watch the economic mechanisms behind this design perform in the real world, and are looking forward to a public discussion on the learnings. Also, we're r&d'ing perpetual tokens with @BalancerLabs.

Where can I make my own tokens or learn more? Check out docs.umaproject.org and join our developer Slack: join.slack.com/t/umaprotocol/…

thanks + source of inspiration : @ben_chain @cburniske @CremeDeLaCrypto @danrobinson @fcmartinelli @FollowTheChain @jillruthcarlson @hosseeb @haydenzadams @jinglanW @karl_dot_tech @ProficieNtOCE @sunnya97 @tomhschmidt @teo_leibowitz @tzhen @VitalikButerin @_mminton