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  1. Overview
  2. How Do Synths Work?

What is the Data Verification Mechanism (DVM)?

And Optimistic Orace

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Last updated 3 years ago

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The DVM is an optimistic oracle service available to respond to price requests made by financial contracts that are registered with it. These price requests ask UMA token holders to vote on the value of a price identifier at a historic timestamp. UMA token holders commit and reveal their votes on-chain in a process that can take 2-4 days. Once the votes are revealed, the mode of these votes is returned to the financial contract as the value determined by the UMA voters for the price request. The financial contract then distributes collateral to its counter-parties based on the value returned by the DVM. The new "Optimistic" Oracle that UMA has deployed allows priced to be determined approximately 2 hours after contract expiry.

Because the DVM requires 2-4 days to respond to a price request, it is not intended to be used as an on-chain price feed that pushes prices to financial contracts that need it. Rather, it is complementary to “priceless” financial contracts.

https://docs.umaproject.org/getting-started/oracle