AMA RECAP — UMBRELLA NETWORK X DECENTRALIZED CLUB.
Umbrella Network’s Partner, Sam Kim, was recently invited for an AMA by Decentralized Club to answer questions from the community.
Umbrella is a scalable, community-owned oracle that securely brings external data on-chain. It is the first decentralized oracle service to empower the community with the scale and security modern DeFi applications require.
SUMMARY
The AMA started off with an interview segment between Sam and Decentralized Club’s moderator Billy where Sam was able to introduce Umbrella Network to the community. This was followed by a series of questions from the audience, with 5 of the best questions picked from DC’s Twitter community for Sam to answer. Finally, a reward pool was given out at the end of the AMA to select participants.
INTRODUCTION
Billy: Can you please introduce yourself and also tell us a bit about Umbrella Network?
Sam Kim: Hey everybody. So glad to be here. Thanks for joining the AMA and for giving me an opportunity to speak to you about my team and the Umbrella Network.
For the past 10 years, I’ve focused on building highly performant, scalable products primarily in the digital advertising industry. I served as the Co-Founder and COO of Gimbal, a buy-side platform that recently acquired TrueX from Disney. Frustrated by the lack of transparency in digital advertising as the COO of Gimbal, I decided to apply the breakthroughs in blockchain technology (i.e. Ethereum) to solve this problem. And so, in 2017 my friends and I started Lucidity where I was the CEO. Lucidity is an L2 / Sidechain that utilizes the distributed ledger and smart contract system to create a shared ledger for the entire industry. Lucidity currently works with traditional brands like Toyota, Hyundai, KFC, and our largest client GroupM / WPP, the world’s largest advertising agency.
The underlying technology we used at Lucidity scaled to over 100,000 events per second easily. And so I sought to find other markets that could use the benefits of our technology. And I settled on the oracle market. Current oracles are not scalable, are expensive to operate, and therefore they do not make enough data available to blockchain developers.
Umbrella uses a system of Merkle trees to aggregate thousands of pieces of data. If you’re not familiar with Merkle Trees, think of them as binary trees where each block (called a leaf in Merkle tree terminology) stores a key-value pair. So an example would be Key: ETHUSD; Value: 2000. It then rolls up each leaf in the tree via a system of hashing to create a single hash (called a root hash) that is a unique representation of all the data sitting on that tree. With this method, one tx on ethereum is equivalent to storing thousands of pieces of data.
Billy: So compared to other Protocols Umbrella Network is the most economical for on-chain transactions?
Sam Kim: It is the most efficient way to store the data on-chain.
Billy: What is so exciting about Umbrella Network that we should know about?
Sam Kim: As exciting as what we’re doing at Umbrella is, I am most excited to see an explosion of innovation by developers once they have this amount of data at their fingertips. I worked with many mobile application developers when the iPhone first came out. The apps they built were cool but really simple. Basic games that were only a little more than pong. Utility apps that were not all that useful. But the confluence of LTE and Amazon’s AWS increased bandwidth while reducing the cost of storing and accessing data. And as a result, we saw an explosion of innovation. Games that were previously confined to PCs and consoles can now be played on mobile. It’s easier to order food or a taxi on your phone than on the computer. Utility apps like health tracking and time management. And so much more.
I think we’re at a similar crossroads in the blockchain. We’re seeing ETH 2.0, Polkadot, Solana, Cardano, and other high performant layer-1 chains. And at the same time, Umbrella will provide a robust set of data cost-effectively. I can’t wait to see the innovation that’s ahead.
Billy: Which are the most important achievements in 2020 for Umbrella Network?
Sam Kim: I’m really excited about a number of things we accomplished in 2020. Launching a project is always exciting. Building a proof of concept and an alpha product is exhausting but so rewarding. Signing up developers and validators and raising money is such a validation. But I don’t think anything beats putting together a good team. In the past couple of months, we hired 2 blockchain developers, 2 backends, 2 frontends, an SRE, a UX, and a Wall Street Quant. It’s a proven team that loves working together, loves our product, and is really committed to the mission at hand. We’ll be adding to the team, but having this core group really positions us for success.
Billy: Finally, any sneak-peek into 2021 plans for Umbrella Network?
Sam Kim: There’s so much in store for 2021. In the short term, we obviously have our token sale and TGE coming up. And that will take a lot of our resources to get there. Everything from a new website that’s launching in about 10 days, getting the word out to great communities like this one, releasing more content, and announcing partnerships like the one with GVol that we announced today.
But beyond that, we’ll be releasing our product on Testnet shortly after the public sale followed by a Mainnet launch not long after. We’re working on releasing new types of data that were previously unavailable to blockchain developers. And our stretch goal is to get to decentralized governance this year.
COMMUNITY QUESTIONS
Twitter User @PhamHuo01951923: Does the name ‘UMBRELLA NETWORK’ have any meanings? What makes you select such a name? Also, can you explain your tokenomics distribution? How many tokens will be minted? How many tokens will be locked by the team?
Sam Kim: Thanks for the question. It’s actually a great first Twitter question IMO. We chose the name Umbrella Network because we believe oracles have more responsibility than simply shuffling data from a centralized database to the blockchain. We adamantly believe that an oracle must ensure the quality of the data and onboard that data securely to the blockchain. And that’s why we chose UMBRELLA which protects us from the elements. In addition, our oracle is a community or NETWORK of token stakers, validators, and data providers all working together to empower blockchain developers with accurate, secure data to run their applications.
Unlike other oracles, we are not a Proof of Authority system that assumes all actors are trustworthy. We do not simply move data from source to blockchain and assume that the data provider is acting without malicious intent or infallibly. Data providers can be manipulated and they can make mistakes. We’ve seen that with the exploits of Compound, Harvest and so many more. We also know that data sources are not free of errors. We’ve seen that with Synthetix and the Korean Won.
It is Umbrella Network’s responsibility to look at data from multiple sources, compare the data to ensure integrity before pushing the data to blockchain developers. We must also have an economic incentive layer to ensure that validators on the system are not misbehaving for their own benefit. And therefore we use a Delegated Proof of Stake.
With regards to your questions about tokens, I will point you to our Medium blog post. While there will be a few changes prior to the public sale, it should give you an overall sense of the tokenonomics, unlocking, etc. But I will emphasize this one point. We’ve designed the system to incentivize long term participation and holding. As an example, the team and foundation will have their tokens unlocked linearly over a 4 year period. There are no balloon token payments or anything of the like.
Twitter User @waybesuricata: In your project — we see that you allocate 66.7% of UMB tokens to the community. What is the community advantage of this? At the same time, what will it contribute to your project?
Sam Kim: I genuinely worry that we’re building a DeFi ecosystem around a centrally controlled oracle. They’ve yet to abuse that power to the best of my knowledge, but certainly, it is not in the spirit of decentralization that attracted so many of us into the cryptocurrency market. Furthermore, I firmly believe in the power of a strong community to affect the outcome of a project. Given a choice between an awesome community vs VC backers, I’d choose the community. Ideally, you want to balance the two, but I believe the community is more critical.
And so, we’re planning to allocate approximately ⅔ of the tokens to the community which includes Public Sale Buyers, Project Fund, and Validator Funds. The balance will go to early contributors/investors, development fund, treasury, and the team.
Umbrella Network uses a Delegated Proof of Stake system where token holders can align themselves with a validator that best represents their economic and governance goals. As you stake your tokens with a validator, any fees or rewards from the system will be directed to the validators who will then share with their stakers. They will also be your representative in the governance of the Umbrella Network.
In addition, we want our community to be our greatest advocate. We want them to reach out to potential projects who should be building on Umbrella. We want them to answer questions in our Telegram channel and our upcoming Discord channel. And we want them to oversee the network to make sure that the system is behaving as it should.
We will have a post coming up about this.
Twitter User @truongdanhy: Could you give me the 3 best features to convince me and other investors should invest in UMBRELLA NETWORK?
Sam Kim: We will be providing the most frequently used 84 crypto data for free. It’ll be free whether it’s on-chain or from our layer 2 system. We will charge via a SaaS premium pricing model for the rest of our data.
We are providing data that has been previously unavailable to blockchain in a cost-effective manner. For example, today we announced our partnership with Genesis Volatility to provide implied volatility data for the decentralized options market. And all of it will be free. There is much more in store.
As a token holder, you will ultimately decide the future of Umbrella Network.
Twitter User @AugustK95: Will all DeFi applications be compatible with traditional financial data from around the world with Umbrella? Or will it only be applicable for some localities and few recognized financial institutions?
Sam Kim: I’m not certain what the second half of the question is asking. But I’ll do my best to answer. I think we are in a bit of a naive state where we simply take data from the centralized world and move it to the decentralized world. And we’re seeing the repercussions of that in the hacks/exploits that I’ve mentioned many times. Instead, we have to recognize that DeFi is different. Our contracts are totally open-source and therefore vulnerabilities can be identified and easily exploited.
I believe it’s important that oracles play a role in safeguarding the transfer of that data and to provide mechanisms and means for DeFi applications to protect themselves from would-be attackers. I wrote a piece on this in Cointelegraph: https://cointelegraph.com/news/defi-data-manipulation-is-too-easy-and-current-oracle-solutions-aren-t-helping-much
Twitter User @Emidm28: Why did you decide to use the Merkle Trees system on the Umbrella Network platform? What are the benefits and advantages of this system?
Sam Kim: Merkle Trees are an incredibly efficient and elegant way to store large amounts of data and transactions on a block. You can ask Satoshi and Vitalik who use it in their blockchains.
For us, it’s simply a way to store large amounts of data off-chain while ensuring the integrity and immutability of the data on-chain. So with a single blockchain transaction, I can store the representation of thousands of data points. At the same time, I can prove whether a Key-Value Pair is on that block or not. And I can do this very cost-effectively.
Data will ultimately move towards a zero cost environment. Meaning that the true economic cost of a piece of data should approach zero in the long run. And the Merkle Tree gives Umbrella Network an advantage in achieving that goal.
The AMA concluded here. We would like to thank the Decentralized Club for organizing the very informative session and inviting everyone who participated in making the AMA so interactive. Please stay tuned for more such AMAs.
