uGAS is a Synthetic Gas Futures Token.
Each uGAS token is named after the month that it’ll expire at the end of (for example, the uGAS-JAN21 token will expire at 0:00 UTC, Feb 1st 2021.) Once the uGAS token expires, it will settle at the median gas price of all Ethereum transactions for the past 30 days. Each uGAS token represents 1,000,000 GAS, so if the median gas price over the 30 days before expiry was 70 Gwei, the uGAS token would be worth 0.07 ETH. NOTE: Expiry price of uGas token is determined by median gas price of all Ethereum transactions for the past 30 days, while liquidation and disputes are determined by 2 hour Uniswap TWAP uGas Price (time-weighted average price).
The Ethereum blockchain is home to a thriving ecosystem of Web apps the usage of which requires to spend network fees, in the form of gas. Gas prices can vary substantially during peak usage periods with various financial impacts on the users (see "Use cases: Hedge, speculate, short").
uGAS is a DeFi-first in that it provides a futures contract that can be easily bought and sold to hedge against or speculate on future gas price moves.
Each contract has it's own expiration date. For example, uGas-JAN21 expires on Feb 1st 2021. Once expired, UMA's Oracle needs to verify that the expiration price is correct according to the specifications of the relevant UMIP. There will be a DVM expiry price request coming at the start of the next commit day, which is 24 hours from expiry, then there is another 48 hour waiting period for any potential disputes. Token Sponsors (if you minted uGas) can always redeem their positions by paying back their debt, even during the ongoing price request. Tokenholders (who only bought uGas) need to wait until the price is returned to settle their positions.
To settle your uGas for ETH a "settle" button will be available after UMA's Oracle has completed it's request.