Part 4 of my deep dive research series will be on UMAMI.
Can $UMAMI drive the next wave of institutional adoption into DeFi??
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Can $UMAMI drive the next wave of institutional adoption into DeFi??
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The purpose of this deep dive series is to analyse a number of popular projects and rank them against a set framework. I outline my DYOR framework below.
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As I complete each project, I will update and track scores on my google sheet. You can view for free below.
docs.google.com
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docs.google.com
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Letβs dive inβ¦..
As of 4th Jan 2023
β’ $UMAMI
β’ Price = $30.69
β’ Market cap = $21.5m β Rank 584
β’ Arbitrum
β’ All time high = $162.3 (-81%)
β’ All time low= $6.55 (+369%)
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As of 4th Jan 2023
β’ $UMAMI
β’ Price = $30.69
β’ Market cap = $21.5m β Rank 584
β’ Arbitrum
β’ All time high = $162.3 (-81%)
β’ All time low= $6.55 (+369%)
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Umami Finance is a project built on Arbitrum that aims to provide sustainable, risk-hedged real yield on core crypto assets.
Their vision is to onboard institutional capital into DeFi through Umami Advisors (crypto financial advisory/ regulatory-compliant onramp).
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Their vision is to onboard institutional capital into DeFi through Umami Advisors (crypto financial advisory/ regulatory-compliant onramp).
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In simple terms, Umami aims to be a better, trust less Defi version of the failed Celsius platform.
Combining the best parts of DeFi and CeFi.
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Combining the best parts of DeFi and CeFi.
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1. Revenue
Umami generates revenue by providing liquidity to GMX- a decentralized perpetuals exchange on Arbitrum.
They take a management fee β 2% of TVL and a performance fee- 20% of APR. Then 50% is distributed to stakers and 50% is distributed to the treasury.
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Umami generates revenue by providing liquidity to GMX- a decentralized perpetuals exchange on Arbitrum.
They take a management fee β 2% of TVL and a performance fee- 20% of APR. Then 50% is distributed to stakers and 50% is distributed to the treasury.
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Umami is one of the leaders in the real yield revolution, paying out stakers in ETH.
In the last week of December 2022, stakers received a total of 5 ETH rewards distributed. Total rewards distributed to date is approx. 339 ETH.
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In the last week of December 2022, stakers received a total of 5 ETH rewards distributed. Total rewards distributed to date is approx. 339 ETH.
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For month of Dec- 23 ETH rewards= $28k USD was distributed to stakers.
This puts it in the top 50 if it were on token terminal (Dapps- revenue generated). Not bad for a project with mcap of $20m.
7 for Revenue.
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This puts it in the top 50 if it were on token terminal (Dapps- revenue generated). Not bad for a project with mcap of $20m.
7 for Revenue.
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2. Treasury
The team publish monthly treasury updates which is great for transparency. Latest update from early Dec is as follows
β’ $4.66m -Treasury value- (excl UMAMI token)
β’ $223,261- OpEx outflow
β’ $3.66m β Liquid blue chips
β’ 14.6 month liquid runway
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The team publish monthly treasury updates which is great for transparency. Latest update from early Dec is as follows
β’ $4.66m -Treasury value- (excl UMAMI token)
β’ $223,261- OpEx outflow
β’ $3.66m β Liquid blue chips
β’ 14.6 month liquid runway
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Relative to its mcap, this is a pretty good size treasury. One concern I do have is it's concentration in GLP and reliance on GMX.
8 for Treasury.
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8 for Treasury.
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3. Tokenomics
According to coingecko, these are the current supply stats
β’ Circulating supply = 699,637
β’ Total supply = 1m
β’ Market cap = $21.5m
β’ FDV = $30.7m
β’ Market cap/ FDV = 0.7
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According to coingecko, these are the current supply stats
β’ Circulating supply = 699,637
β’ Total supply = 1m
β’ Market cap = $21.5m
β’ FDV = $30.7m
β’ Market cap/ FDV = 0.7
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$UMAMI is the protocol's governance and fee-generating token. It can be staked for a share of protocol revenues. There are two staking options
β’ Marinate
β’ Compound
Overall, very strong tokenomics model with a focus on Real Yield and zero emissions.
9 for Tokenomics.
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β’ Marinate
β’ Compound
Overall, very strong tokenomics model with a focus on Real Yield and zero emissions.
9 for Tokenomics.
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4. Locked up funds
Umami has a fixed Max Supply of 1b. However, about 125k non-circulating $UMAMI are permanently locked in defunct staking contracts and effectively "burned."
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Umami has a fixed Max Supply of 1b. However, about 125k non-circulating $UMAMI are permanently locked in defunct staking contracts and effectively "burned."
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The remainder are held in Umami's treasury and are reserved for future team compensation, DEX liquidity and OTC capital raises.
With approx. 70% tokens already circulating, risk of future sell pressure from vesting unlocks is low.
9 for locked up funds.
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With approx. 70% tokens already circulating, risk of future sell pressure from vesting unlocks is low.
9 for locked up funds.
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5. Use case
There are two main purposes for the UMAMI token
β’ DAO governance
β’ Share of protocol revenues
At any time, you can deposit $UMAMI for $mUMAMI (marinated).
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There are two main purposes for the UMAMI token
β’ DAO governance
β’ Share of protocol revenues
At any time, you can deposit $UMAMI for $mUMAMI (marinated).
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Umami's Marinate product is the foundation of its #RealYield tokenomics. It delivers the value Umami creates from its fee-generating DeFi products to long term stakers in the form of passive-income in $wETH.
You can boost returns by compounding mUMAMI to get cmUMAMI.
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You can boost returns by compounding mUMAMI to get cmUMAMI.
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The overall purpose of Umami is to solve the liquidity issues in DeFi by onboarding institutional capital into the space.
They plan on doing this through their DeFi yield vaults that will utilise trustless, non-custodial smart contracts audited by Tier-1 security auditors.
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They plan on doing this through their DeFi yield vaults that will utilise trustless, non-custodial smart contracts audited by Tier-1 security auditors.
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Initially starting with 3 vaults for USDC, BTC and ETH.
The Vaults generate yield by providing liquidity to GMX- one of the most popular DeFi perp exchanges.
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The Vaults generate yield by providing liquidity to GMX- one of the most popular DeFi perp exchanges.
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TVL denominated in ETH is in a strong uptrend since early 2022. Including staking, nearly $20m TVL.
According to DeFi Llama, yields are about 2.09% APY at the moment. A little low but quite stable- DeFi Llama predicts high confidence it stays above 1.66% in next 4 weeks.
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According to DeFi Llama, yields are about 2.09% APY at the moment. A little low but quite stable- DeFi Llama predicts high confidence it stays above 1.66% in next 4 weeks.
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One of my main concerns is how the team will overcome all the regulatory challenges to onboard large institutions.
However, if they can overcome these, Umami is strongly poised to capitalise on the inevitable rush of institutional adoption into DeFi.
8.5 for Use case.
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However, if they can overcome these, Umami is strongly poised to capitalise on the inevitable rush of institutional adoption into DeFi.
8.5 for Use case.
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6. Roadmap
First goal for 2023 Q1 is to release Umami GLP vaults v2 for BTC, ETH and USDC.
A report from December outlines back testing results with APRs above 26% which is quite impressive.
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First goal for 2023 Q1 is to release Umami GLP vaults v2 for BTC, ETH and USDC.
A report from December outlines back testing results with APRs above 26% which is quite impressive.
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Other goals for 2023 include
β’ Umami Advisors
β’ UA DeFi Yield Indexes
β’ Institutional ETH Staking Pool
β’ Core Crypto Market-Maker
8 for roadmap.
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β’ Umami Advisors
β’ UA DeFi Yield Indexes
β’ Institutional ETH Staking Pool
β’ Core Crypto Market-Maker
8 for roadmap.
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The team are very transparent around the structure of the organisations and define clear roles and governance in their docs.
docs.umami.finance
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docs.umami.finance
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Umami DAO is governed by its community of $UMAMI holders but it outsources its day-to-day management to Umami Labs LLC, a U.S.-based professional services company.
Team structure below.
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Team structure below.
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There are also quite regular blogs, treasury updates and communications issued by the team which instils confidence in the project.
Umami has some solid partners including GMX, Circle, Socket and Banxa.
8.5 for Team/ Funding.
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Umami has some solid partners including GMX, Circle, Socket and Banxa.
8.5 for Team/ Funding.
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8. Summary
TLDR summary for each categoryβs score out of 10.
7 - Revenue β Paid in ETH- good revenue for mcap
8 - Treasuryβ 14-month runway, good for relative mcap
9 - Tokenomics β Real yield, zero emissions
9 - Locked up funds β 70% in circulation, staking
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TLDR summary for each categoryβs score out of 10.
7 - Revenue β Paid in ETH- good revenue for mcap
8 - Treasuryβ 14-month runway, good for relative mcap
9 - Tokenomics β Real yield, zero emissions
9 - Locked up funds β 70% in circulation, staking
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8.5 - Use case β Positioned to capitalise on institutional adoption
8 - Road map β Lotβs planned for 2023- need to execute
8.5 - Team/ funding β Doxxed team, transparent structures, good comms
TOTAL- 8.2 weighted avg. score
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8 - Road map β Lotβs planned for 2023- need to execute
8.5 - Team/ funding β Doxxed team, transparent structures, good comms
TOTAL- 8.2 weighted avg. score
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Overall, I am really impressed with this project and their focus on real yield, integrity and transparency.
For a relatively new project, they already are delivering some excellent revenues which are generously distributed to stakers of Umami.
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For a relatively new project, they already are delivering some excellent revenues which are generously distributed to stakers of Umami.
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They also have a really clear and well put together whitepaper and strategic vision, setting up the project well for future growth.
We are already seeing tradfi institutions enter into the DeFi space, and I expect this will only accelerate over the next decade.
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We are already seeing tradfi institutions enter into the DeFi space, and I expect this will only accelerate over the next decade.
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Umami have positioned themselves well to build a product that will capitalise on this adoption whilst at the same time, promoting decentralisation.
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The purpose of this thread is for education and research, not investment or financial advice. The current macro conditions are still very choppy with the risk of recession in 2023 and a tightening Fed so please be cautious out there frens.
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Follow these chads for more alpha on this project
@ArbiAlpha
@crypto_linn
@korpi87
@Slappjakke
@LouisCooper_
@IntrinsicDeFi
@crypto_condom
@rektdiomedes
@TheDeFinvestor
@UmamiFinance
@DAdvisoor
@dennis_qian
@SalomonCrypto
@Dynamo_Patrick
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@ArbiAlpha
@crypto_linn
@korpi87
@Slappjakke
@LouisCooper_
@IntrinsicDeFi
@crypto_condom
@rektdiomedes
@TheDeFinvestor
@UmamiFinance
@DAdvisoor
@dennis_qian
@SalomonCrypto
@Dynamo_Patrick
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Appendix- useful links
umami.finance
docs.umami.finance
blog.umami.finance
#balances" target="_blank" rel="noopener" onclick="event.stopPropagation()">arbiscan.io
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umami.finance
docs.umami.finance
blog.umami.finance
#balances" target="_blank" rel="noopener" onclick="event.stopPropagation()">arbiscan.io
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That's a wrap!
If you enjoyed this thread:
1. Follow me @jake_pahor for more of these
2. RT the tweet below to share this thread with your audien
If you enjoyed this thread:
1. Follow me @jake_pahor for more of these
2. RT the tweet below to share this thread with your audien
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