Universal Market Access (UMA), a decentralized financial contract protocol, has announced today the launch of a US stock index-based token, powered by the Dai stablecoin. As of now, the USStocks token is live on the Ethereum mainnet.
USStocks, available on DDEX, is an ERC20 token representing synthetic ownership of an index of the 500 largest exchange-listed US stocks. USStocks is a decentralized means of financial market access for crypto-users today. Users can now deploy the MakerDAO stablecoin, Dai, toward buying USD-denominated assets.
Rune Christensen, CEO, and co-founder of MakerDAO said:
“Dai exists to create an inclusive platform for economic empowerment — allowing equal access to the global financial marketplace. USStocks is an exciting example of how decentralized finance can unlock economic opportunities for people regardless of geography or income level.”
How It Works:
Each USStocks token represents USD $1 x Stock Index level.
The stock index level is calculated from the 500 largest companies listed on the NYSE and NASDAQ stock exchanges.
To create USStocks, liquidity providers deposit Dai into UMA’s trustless tokenization smart contract. As the value of the stock index rises, providers add additional Dai with the smart contract enforcing a total collateralization ratio of > 108.5%¹ at all times.
USStocks is free to trade until the initial expiration date, May 15th when any token holder can redeem their USStocks tokens for Dai at the final settlement value.
Hart Lambur, Co-founder of UMA commented:
“Later this year, our partners will roll out more tokens for other assets, inverse exposures, and leverage. These products can trade anywhere that supports the ERC20 standard. We believe in the power of decentralized finance as a force for good. Today, we are taking a small step toward un-blocking barriers to financial market access. We look forward to the day when anyone with access to the internet and digital money can gain access to any financial market, creating a single, permissionless marketplace for risk transfer.”