There are three actors in UMA’s Optimistic Oracle system: the contract requesting the data, the participant offering the data, and a potential disputant, who can dispute data if they disagree.
If a dispute arises, UMA token holders resolve the dispute within 48 hours. If the disputer is right, they get a portion of the proposer's deposit as a reward; if the disputer is wrong, they lose their deposit as a penalty, a portion of which goes to the proposer. Voting in the oracle has three phases: open voting; voting confirmation/reveal; and rewards claim period.
Rewards will compound as they are claimed. Claiming the rewards places the tokens in users’ wallets, making them active voting tokens that will increase the user’s voting power with each successful vote.
UMA’s smart contracts are designed primarily for developers building decentralized applications. All UMA token owners can participate in UMA’s optimistic oracle. UMA’s token is built on Ethereum that can be held in wallets like Metamask, Trezor, or Ledger, which must be connected to the UMA voting Dapp to enable voting.
All of UMA's oracle contracts have been audited by OpenZeppelin, in addition to the contracts for Across Protocol and Outcome's Optimistic Governor, Optimistic Distributor, and more.