UMA crypto token went vertical on Friday, reaching its highest point since March, even as other cryptocurrencies retreated.
UMA (UMA) surged to a high of $1.440, gaining over 40% from its weekly low. The rally pushed its market capitalization above $112 million.
The token jumped after Polymarket, a popular prediction market platform, announced a partnership with Elon Musk’s X. Polymarket will serve as the official prediction market partner for the social media giant.
The partnership is significant for UMA because it serves as the oracle provider for Polymarket. UMA’s optimistic oracle offers a decentralized and trustless mechanism for resolving market outcomes on the platform.
Polymarket likely selected UMA for its robust feature set, including the ability to process diverse data types such as natural language questions. It also has a decentralized dispute resolution mechanism, further enhancing its reliability.
As a result, UMA’s price rallied on investor expectations that the deal could drive long-term growth, given X’s massive scale. The platform is one of the largest players in social media, with between 240 million and 300 million active users and more than 650 million monthly users overall.
As such, there is a likelihood that X will boost the number of Polymarket users, which will in turn lead to more fees for UMA. UMA’s oracle makes money by taking a small fee for all outcomes it resolves. It also takes a cut in cases of dispute resolution. It has handled 1,075 disputes on Polymarket over time.
