Trending Project: Umami Finance
- Ticker: UMAMI
- Sector: DeFi - Asset Management
- Network: Arbitrum
- FDV: $9.1M
- Hotness Rating: 🔥🔥
- Umami is an Arbitrum based asset management project. Umami is developing delta-minimized vaults on GLP, the liquidity pool token of GMX, which will hedge out price exposure to the assets in the pool. Umami is governed by the UMAMI token, which upon the release of the GLP vaults, can be staked to earn 50% of the revenue generated by the product.
- Umami has been embroiled in controversy over the past few weeks. The drama first began on January 31, when the former lead of the project, Alex O’Connell, announced that the project would stop distributing ETH payouts to UMAMI stakers. Previously, Umami shared a portion of the yield generated by the project's treasury with stakers. The price of UMAMI fell 37.9% in the immediate aftermath of this news.
- Things escalated on February 8, when it was revealed that the Umami team resigned from their positions at Umami Labs, the company leading development on the project, due to O’Connell’s management. Per an article from Flywheel, O’Connell had been attempting to seize the assets held in the Umami DAO treasury by placing them under the control of Umami Labs. After the team’s resignations, O’Connell left the project and sold his UMAMI position, netting himself roughly ~$500K. This caused the price of UMAMI to briefly wick to near zero before recovering. Umami currently trades at a price of $9.17, which represents a -76.5% decline from its 52-week high of $39.10.
- Although we are still in the immediate aftermath of O’Connell’s rage quit, the Umami team and community appear to want to keep the project going and launch the GLP vaults. A proposal by community member Crypto Condom which suggests re-implementing fee-sharing and transitioning the project to a full DAO model, is making its way through Umami governance and appears to have early community support. This decision may also be influenced by the fact that Umami trades above the value of its non-native treasury assets (RFV) which as of writing is $5.68 per UMAMI.
Hotness Rating (🔥🔥/5): Umami is in crisis following the unceremonious (to put it lightly) departure of its former CEO. While it’s possible that the Umami brand is permanently tarnished, the transition to a DAO model and successful launch of the GLP vaults could breathe new life into a project which had already once been left for dead as an ex-OHM fork. Given that UMAMI currently trades ~1.7X above RFV, it’s unlikely that the DAO will vote to dissolve and return treasury funds to tokenholders in the short-term. Perhaps UMAMI will have an end of 2020/early 2021 SushiSwap style resurrection, but between trading above RFV and the massive near-term risks facing the project, non-degen investors may want to take a wait-and-see approach before adding it to their shopping carts.