uLABS Launches Synthetic Token uPUNK

Published on: 23.04.2021

UMA announced uLABS launches a synthetic NFT index token on the CryptoPunks collection – uPUNK.

The value of uPUNK is calculated by computing the median transfer price of all CryptoPunks transferred over the last 30-days. However, only the last transfer price of each individual NFT is used in this computation which removes all prior trades of a single NFT in that 30-day period.

The first uPUNK synthetic will be created with UMA’s Expiring Multi Party (EMP) contract and will expire on July 31st, 2021. Similar to the collateralization monitoring of uGAS and uSTONKS, uPUNK will determine liquidations based on a 2-hour trade weighted average price (TWAP) of the token itself.

🔺There are some obvious uses for the uPUNK token.

For users who want long exposure to CryptoPunks, but don’t have enough funds to buy one (over $40k each) or don’t know how to choose one, they can simply buy uPUNK on a decentralized exchange to gain exposure to the NFT collection in the form of an ERC20 token. They can buy more or sell it back whenever they choose.

For users who already own a CryptoPunks NFT and would like to reduce exposure to price fluctuations, they can sell uPUNK to effectively hedge their risk. In this way they can also keep their favourite NFTs without needing to deposit it into an index fund like NFTX and likely risk losing ownership of it.

And finally, for users who just think CryptoPunks are overvalued pixelated portraits and don’t get the excitement, they can mint uPUNKS with their ETH and sell it into a decentralized exchange to gain short exposure. uPUNK provides the crypto community an idea for a new tool to achieve exposure that was previously not possible in the NFT space.