🔍Frequently Asked Questions

About Umoja

Umoja protocol is a crypto asset factory. We can create any asset using tokenizing trading strategies that produce better yield and protection than anywhere else in crypto.

We’re enabling a world where anyone, anywhere can build wealth by customizing extremely liquid high-performing assets.

About Synthetic Options

What is a Synthetic Option?

Umoja´s Synths (synthetic options) allow you to take a leveraged bet on the future price of an asset with zero liquidation risk, offering far greater flexibility and capital efficiency than traditional options.

How are Umoja Synthetic Options different from Traditional Options?

The significant difference between Umoja Synthetic options (Synths) and traditional options is the ability to redeem the refundable collateral anytime and zero-liquidation risk protection availed by Umoja Synths, unlike traditional options where your premium can be liquidated. In a conventional options market, a buyer can only access options premium by selling to a third party while Umoja Synths does not require a third party, offering the flexibility for the user to redeem collateral and Synth balance by closing a synth position from their synth´s details page.

Please explain the different Synthetic Options that Umoja offers.

When using Umoja you can run 2 different types of Synths (aka synthetic options). Your choice of Synth will depend on your preferred trading strategy informed by your perspective of the market direction. With Umoja, you currently can place Put or Call Options.

Put: placing a Synthetic Put Option is like a financial safety net. It’s a strategy to protect you from a drop in prices when you think the market is going down. With Umoja, you can lock in your gains by placing a synthetic put option.

Call: when placing a Synthetic Call Option you are betting that the price of an asset will increase without having to own or buy that particular asset. With Umoja, you can use a Synthetic Call Option to take a leveraged long position without the risk of liquidation.

Opening a Synth Position

What are the requisites to use Umoja?

Using our dApp requires connecting your crypto wallet to the Arbitrum Mainnet and having $USDC and just a small amount of ETH for gas fees. USDC is required for collateral down payment when opening a position. If you need $USDC and ETH on the Arbitrum Mainnet, you can bridge here.

How to create a Synthetic Put Option?

Please read the Create a Synth Put section in this guide.

How to create a Synthetic Call Option?

Please read the Create a Synth Call section in this guide.

What is the Minimum Amount of Token required for a Synth Option?

Umoja allows users to open a synth position (Put or Call) for as low as 0.1 for BTC or ETH, and 10 for AVAX.

Why is USDC used for Synth collateral?

USDC simplifies the trading model. However, soon, users will be able to use the token they're hedging against as collateral.

Creating a Synth

Is it possible to modify or update an active Synth?

Currently, positions cannot be modified once placed, but this is an area we might explore in the future. However, you can decide to close your synth manually before it hits the maturity date.

What are the components of trading costs in Umoja?

The trading costs include the Umoja Fee and Synth´s collateral costs. Umoja applies a straightforward fee structure for its market-betting coverage plans. The Umoja fee is calculated based on the Synth notional amount, the Synth expiry, and the strike relative to the current price. You can see Umoja´s fees before you pay for your Synth position.

Synth funding and leverage.

Each Synth is individually funded with its collateral. Trading is executed on 10x leverage with built-in liquidation protection. The strategy involves trading perpetual futures to replicate the value of options, offering option-like performance at significantly reduced costs, more flexibility, and greater customizability.

Relation between rate of decay and Synth cost.

The rate of decay is uncertain and can vary based on market changes. Coverage does not decay until collateral falls below 5% of the protected amount. We encourage users to register their email address in the dashboard section to receive email notifications when their collateral falls below 7.5%.

What happens if a Synth price does not cross the strike price?

For Put: If the price stays above the strike price, the Put Option is not activated, and there's no payout. Depending on maintenance, the collateral may be depleted due to Option costs.

For Call: If the price stays below the strike price, the Call Option is not activated, and there's no payout. The collateral may be depleted due to Options costs, depending on its maintenance.

The market price did not reach the strike price when a Synth expired.

If the price stays above or below the strike price at expiration, the Synth position isn't activated, and there's no payout. The collateral is returned regardless of the market price.

Synth Collateral Management

What factor contributes to collateral depletion?

Collateral depletion is influenced by the duration of the Synth and market volatility, as these increase the trading needed to maintain the synth.

Is the user required to maintain the collateral ratio?

Once a Synth position is opened, it runs automatically without requiring the user to perform any action. The user will only be required to top collateral if the collateral ratio falls below 5%. We encourage users to register their email address in the dashboard section to receive email notifications when their collateral falls below 7.5%.

Will Umoja liquidate my synth?

No, we will not cancel (liquidate) your Synth, but we will ask you to Top-up collateral if the collateral ratio falls below 5% to maintain coverage. We encourage users to register their email address in the dashboard section to receive email notifications when their collateral falls below 7.5%.

How to Top-up collateral?

When the collateral ratio of a Synth falls below 7.5%, the synth status will change from “Active” to “Ned to Top-Up” on the dashboard and also on the Synth details page. The Synth coverage will be halved if the collateral falls below 5%. To avoid this scenario, users can make a payment from the Synth page. We encourage users to register their email address in the dashboard section to receive email notifications when their collateral falls below 7.5%.

Closing a Synth Position and Payout

How long does it take for a fund transfer to be completed after closing a Synth position?

When you close a Synth, the funds should be transferred to your account in about an hour. If you experience any delays beyond this, feel free to reach out to us with your Synth ID through the Intercom tool published on the app or via Telegram.

What to do after closing a Synth before receiving a funds transfer?

When you close a synth, the funds should be transferred to your account in about an hour so you do not have to perform any further action. If you experience any delays beyond this, feel free to contact us using the support channels on Telegram, Discord, and using the chat on our website and, we will request your Synth ID for troubleshooting purposes.

How to claim payouts before the Synth expiry date?

You can close a Synth anytime before the expiry date is reached. This will result in the transfer of the collateral and any payouts accrued up to that respective time. The amount transferred will vary depending on the market conditions and synth position trading performance about the market trend.

When is a Synth eligible for a payout?

When the Synth is 'in the money' (current price lower than the strike price for Put or current price above the strike price for Call), users can close their Synth Position to claim their remaining collateral and due payout at any time before expiry.

What is the payout if the market price reaches the strike price?

Payout occurs when the market price falls below or above the strike price, covering the difference. For instance, if the user placed a Put for BTC with a strike price of $49,000 and the price falls by $3,000 below a $49,000 strike price, the payout would be $3,000.

Similarly, a payout would also occur when a user opens a Call position and the price of the asset rises above the strike price. The difference between the strike price and the current asset price in relation to the Synth direction determines the payout amount.

Where can I see my gains?

If you have an active Synth, you can consult your position performance by visiting the details page of your Synth. Look for the Profit/Loss information.

Leaderboard

How Points are rewarded?

Points are rewarded based on total notional value and synth active duration. About 90% of the total is rewarded based on the total amount spent by the user on Umoja Synths. All Umoja Synths, irrespective of the underlying token and Synth position, whether a Put or Call, are rewarded equally based on the sum notional value spent on the protocol by the user.

Users with Synths that have higher notional value and longer duration have a higher chance of earning extra points unlike when a synth is active for a short duration.

What do the points at the Leaderboard represent?

Points correlate with the amount, time, and quantity of your Synthetic Options. More points mean more eligibility for airdrops.

Troubleshooting

I want to place a Synthetic Option but the token I have is unavailable.

Currently, Umoja supports opening a Synth for BTC, ETH, and AVAX. More currencies will be added soon.

I am about to place a Synthetic Option but the button in the form says “wrong network.”

Umoja uses the Arbitrum network, make sure your assets are in the Arbitrum Network and your wallet when connecting to and making payment on the Umoja platform.

How can I contact Umoja?

Umoja support team can be reached via our Telegram Channel, Discord, and by submitting a direct support request on our website chat widget.

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