What crypto projects would Warren Buffett invest in?
Buffet Index is a portfolio that contains crypto projects selected according to Warren Buffett’s rules. Many investors follow these rules and want the same return as a great financial expert. Our analysts select assets based on Buffett’s investment rules, and today we will tell you about a few of them: UMA and The GRAPH.
What is UMA?
UMA (Universal Market Access) is a protocol for creating synthetic assets based on the Ethereum (ETH) blockchain. UMA launched in December 2018.
Synthetic assets are an asset class that represents different underlying assets and have the same value. UMA specifically allows its users to design and create self-executing, self-sufficient financial contracts backed by economic incentives and run them on the Ethereum blockchain.
Essentially, the UMA allows counterparties to digitize and automate any real derivative such as futures, contracts for difference (CFDs), or full-yield swaps. It also allows the creation of self-executing derivative contracts based on digital assets such as other cryptocurrencies.
UMA was founded in 2018 by Allison Lou and Hart Lambour, two former Goldman Sachs traders, to enable users to transfer risk over the Internet without going to central authorities. The team drew inspiration from traditional financial derivatives to define an open-source protocol that allows anyone, anywhere, to design and build trustless financial contracts.
What makes UMA unique?
The main idea of universal market access is reflected in its name. It develops a protocol for creating synthetic assets and financial contracts on the blockchain to democratize and decentralize the financial derivatives market.
Traditional financial markets have high barriers to entry in the form of rules and custody requirements that generally prevent individuals from participating in them. In addition, potential traders and investors often find it particularly difficult to participate in markets outside of their local financial system. As a result, it prevents a genuinely inclusive global financial market from emerging and limits participation to a handful of institutions that can afford the necessary due diligence and legal procedures.
On the other hand, UMA contracts are based on the Ethereum blockchain, whose nature allows any user to create, run, and trade digitized derivatives from anywhere in the world. This accessibility is especially important for developing countries worldwide, where financial institutions are often far from mature, forcing local market participants to be relatively isolated. Below are the price dynamics for UMA over the project’s entire lifetime:
What is The Graph?
The Graph is a protocol for indexing and querying data from blockchains since Ethereum. Developers create open APIs called subgraphs to easily access data in a chain indexed by a network of node operators.
GRT is open source, so anyone can use the API to build decentralized applications. Many Ethereum apps have already created subgraphs and are using them today, including Audius, Uniswap, Opyn, ENS, DAOstack, Synthetix, Moloch, and more.
The Graph team includes professionals from the Ethereum Foundation, OpenZeppelin, Decentraland, Orchid, MuleSoft, leading to the IPO and acquisitions of Salesforce, Puppet, Redhat, and Barclays.
Thousands of developers have deployed over 3000 subgraphs for DApps such as Uniswap, Synthetix, Aragon, AAVE, Gnosis, Balancer, Livepeer, DAOstack, Decentraland, and many more.
To fund the development of the network, The Graph has raised funds from community members, strategic venture capitalists, and blockchain influencers. Community includes Coinbase Ventures, DCG, Framework, ParaFi Capital, CoinFund, DTC, Multicoin, Reciprocal Ventures, SPC, Tally Capital, and more.
What makes The Graph unique?
The Graph is working to bring a robust decentralized public infrastructure to the mainstream market. Participants use Graph Token (GRT) to ensure the economic security of The Graph Network and the integrity of the requested data. GRT is a working token locked by indexers, curators, and delegators to provide indexing and curation services on the web.
Below are the price dynamics for GRT over the project’s entire lifetime:
These are just a few of the projects that are available in the Buffet Index. But even because of them, it’s worth investing in this portfolio! They will show good growth in the long term and will bring income to our investors.