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The DeFi protocol UMA has introduced a feature that it has dubbed ‘developer mining,’ which includes token rewards for projects built on its platform. The program hopes to capitalize on the success of liquidity mining and decentralized finance (DeFi) to create more synthetic assets.

As the liquidity mining craze appears to be losing steam, Risk Labs foundation has created a different way to earn.

The new so-called ‘developer mining’ feature is a program that incentivizes developers to build their newest synthetics on the UMA protocol. The prize? A token reward pool of 50,000 $UMA ($325,000) per week.

In a Medium post, Clayton Roche, Head of UMA Community development, explained the rationale behind this tweak on liquidity mining.

With developer mining, the rewards will be proportional to the amount of synthetic asset value locked in the developers’ contracts. In other words, the more popular the smart contract, the greater share of the weekly 50,000 UMA ($325,000) the developers get.

1/ Inspired by the successes of liquidity mining, UMA is announcing a new program called Developer Mining.

Developer mining will pay out rewards to developers who launch successful products that gain use.

This goes live in 7 days.https://t.co/wRjdKVJmR5

— UMA (@UMAprotocol) November 3, 2020

Unlike the liquidity miners on most platforms, developers will do more than lock in their tokens. By building their DeFi projects on UMA, Roche hopes devs will be encouraged in a few ways.

First, they can bring value to their project by reaping a larger percentage of the UMA token rewards. At the same time, these new projects should be able to attract more users, thus raising the value of the UMA tokens.

On top of that, synthetic asset programs on UMA can create their own liquidity schemes as they see fit.

Roche claims that developer mining is different in that;

“Liquidity is not loyal, and it is not an end-in-itself. Risk Labs never intended to merely buy liquidity; the intention has always been to encourage liquidity for products people actually want to use.”

Though it is unclear how thinly the rewards will be distributed, the money is there. Roche says that allocation for this program is “potentially” 35% of the UMA token supply, worth around $250,000,000 at the time of writing.

Though the money is attractive, the developer mining approach could also be a way to hasten DeFi product development. The UMA team believes it can attract new users to new synthetic products with this new form of mining.

The UMA rewards will give developers an “immediate business model” as they can redistribute their mining rewards among their non-dev users.

Meanwhile, UMA’s original native stablecoin project, the yield dollar, will get a head start.

Not just anyone can claim their developer rewards, however. To participate in developer mining, devs must apply and be whitelisted by the UMA team. Then, rewards will begin on Nov 10, 2020. A few projects already have a foot in the door, including PerlinX and UMA’s own yield dollar.

In September 2020, UMA launched a DeFi liquidity mining program with its yield dollars. The yield dollar essentially allowed the minting of stablecoins at a discount. The newly-minted tokens can only be redeemed after a certain maturity date.

UMA (which stands for Universal Market Access) hopes to be a leading synthetic assets provider, and thus wants to attract the most innovative synthetic assets developers. Its main rival at this time is Synthetix.

Products on the UMA protocol have potential beyond just dollars. Roche even had a few suggestions of potential ‘up for grabs’ synthetic assets that could be created in smart contracts. Some of the most notable including synthetic ETH gas products, a BTC volatility tracker (like the VIX index but for crypto), and a San Francisco real estate tracker.

The post UMA Introduces ‘Developer Mining’ to Help Bolster DeFi Innovators appeared first on BeInCrypto.

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