Umoja Beta Is Live: Bringing Simplified Access To Crypto Hedging
Atlanta GA, USA, February 13th, 2024, Chainwire
Umoja, a groundbreaking protocol designed to simplify and automate the hedging process for a wide range of digital assets, has announced the beta launch of its hedging-as-a-service offering. With today’s launch, Umoja makes it simple for users to implement and engage with hedging strategies tailored to their specific level of risk tolerance, providing a safeguard against asset depreciation and potential liquidation.
As the first asset risk management primitive in the DeFi industry, Umoja enables anyone, including degens, pro traders and retail investors, to insure their trading portfolios in the same way as a multi-billion dollar hedge fund does. Intending to become the “Yearn Finance for Risk”, Umoja’s goal is to facilitate the decentralized hedging of any real-world risk asset, including crypto, fiat, digital bonds, real estate or commodities, and carve out a niche in what is believed to be a $500 trillion market opportunity.
Umoja began life as an emerging market microfinance platform, only to stumble upon a critical issue in today’s DeFi markets. The fluctuating currency values and USD loans create risks that can only be mitigated via traditional financial methods, hedging the currency in question. But hedging strategies are out of reach for many investors due to the high cost, the time-consuming nature and the need for vast liquidity. Recognizing the impact of this problem, Umoja realized there is an urgent need to transform hedging in the DeFi industry.
“Umoja’s beta is more than just a new service launch — it’s a significant stride towards a future where crypto investments are safer and more stable. By simplifying and democratizing the hedging process, we’re opening up a world of new opportunities for investors at all levels,” said Umoja founder, Robby Greenfield, in a statement.
The debut of Umoja introduces the concept of CeFi Dynamic Term Loss Coverage for crypto assets including BTC, ETH and AVAX, enabling investors to flexibly hedge against risk. In traditional finance, hedging is the term used to describe a strategy in which an investor takes an offsetting position in an asset that reduces the price risk of their existing position. In other words, it is a kind of trade that aims to reduce the risk of adverse price movements in a second asset.
One of the new features introduced with the Beta launch, and perhaps the most exciting of them, is zero-loss staking. Umoja users will now be able to stake their assets for yield, while the principal is protected from any potential loss. This game-changing option opens the DeFi space to the more conservative crowd, as they can now participate in it with the knowledge their invested is secure, all while accruing yield.
Umoja simplifies the hedging process in such a way that it becomes accessible to every investor. With its protocol, investors simply select a customizable term coverage product for their assets that’s aligned with their investment goals. To initiate their coverage, investors only need to deposit 10% refundable collateral — a game-changing development that significantly lowers the barrier to entry. To maintain their coverage, investors must ensure their collateral remains above the 5% threshold. In this way, Umoja enables investors to hedge against risk at up to 80% lower costs than with traditional methods, with the added benefit of requiring ten-times less capital.
Umoja’s beta launch makes hedging uniquely accessible to thousands of investors, providing sophisticated services that are not only competitive and cost-efficient, but also entirely automated. Investors now have a way to easily implement or engage with hedging strategies and safeguard themselves against the inherent risks that derive from the extreme volatility of crypto.
“Hedging provides a seatbelt for investors embarking on the roller-coaster ride of DeFi markets. As such, it shouldn’t be a luxury, nor should it be a brain-twister. Umoja is all about providing that safety net for DeFi investors,” Greenfield commented.
Umoja is launching as a CeFi platform in its Beta release, but will switch to a DeFi by the second quarter of the year.
With its clear vision of democratizing access to hedging in the DeFi industry, Umoja’s protocol has been carefully crafted by a team of individuals who have firsthand experience of the inherent volatility and uncertainty of crypto markets. The project has raised more than $2 million in funding to date, and is backed by big names such as the Avalanche Foundation, Coinbase Ventures, Orange DAO, Blockchain Founders Fund, GainsVC and Ivan On Tech.
About Umoja Labs
Umoja Labs is a fintech company focused on digital assets that uses software for real-world use cases such as cross-border payments and asset management. Umoja Labs has deployed its products to facilitate digital humanitarian aid programs with the likes of Oxfam, Care International and Hope for Haiti. It also provides affordable MSME lending and asset hedging for those that need it most.