AMA Recap with GAINS Chat
GAINS Chat Telegram Channel
Thursday, 4th March, 2021
Time: 5:00PM UTC
Umbrella Network’s Partner, Sam Kim, was recently invited for an AMA by GAINS Chat 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.
*** AMA starts ***
INTRODUCTION:
- Let’s start by hearing a bit about you. What did you do before crypto and did you have any other previous venture in crypto?
Most of my career has been in the startup space in one shape or another
Initially, I worked at an incubator/accelerator in NYC. And for the last 10 years, I’ve been in the digital advertising technology industry. Initially, I was the co-founder and COO of Gimbal, a mobile ad tech company. And most recently, I was the founder and CEO of Lucidity, a blockchain-based advertising technology provider.
Both of these companies work with traditional enterprises ranging from Toyota and KFC to large agencies like GroupM.
2. That’s a strong background. How did you finally end up at Umbrella Network?
While Lucidity was not a tokenized project, it did use the underlying blockchain / ethereum technology. And so back in 2017, there was no way that we could process the hundreds of thousands of transactions per second that digital advertising requires. So we were forced to come up with a layer 2 solution to handle that scale. And that’s how we came up with our Merkle Tree-based sidechain.
It didn’t make sense to tokenize this project. And we didn’t want to force a token where it wasn’t necessary. After all, we were working with some of the largest companies in the world. However, I was always interested in crypto. I watched, traded and invested even through the crypto winter. I had a particular interest in oracles. I thought that it was a critical piece of infrastructure that was being underserved.
I always wanted to apply the underlying Merkle Tree sidechain in other industries. And so, when Lucidity became more mature, it was time for me to pursue new challenges and interests. And the oracle market suffers some of the same issues that digital advertising does — mainly that writing one piece of data on chain at a time doesn’t work.
So the Umbrella Network was born.
3. Interesting. Let’s learn more about Umbrella Network then. What is the project about in a few simple sentences?
Umbrella Network is a community owned, cost-efficient oracle. We run a delegated proof of stake model so that our community provides the governance. In addition, we run a Merkle tree based sidechain that aggregates over a thousand pieces of data into a single blockchain transaction. Thereby making Umbrella Network the lowest cost data provider in the market.
4. This really sounds good. Aside from being the lowest cost data provider in the market, what sets you apart from the competition?
Because we are the lowest cost data provider, we also have the most comprehensive set of data. We are going to launch our public testnet with 750 different data points. Data that ranges from crypto pairs to Fx prices to crude oil and data for the decentralized options market.
We’ll have calculated values and much more. And this is just the beginning.
We’ll be adding more and more data pairs in the weeks to follow. We can do this because the cost for bringing additional data onchain is negligible for us.
5. How many people on the team?
Good question. Let me do a quick count.
We’ve obviously been adding to the team. It seems like not that long ago that I was the only non-engineer.
But I believe we just hit 15 members which is pretty exciting. We’re actively recruiting across all departments from engineering to marketing, BD, customer support and operations
So this number will grow pretty quickly.
6. Did you raise funds so far? If so, how did you handle them? Are you planning to do any future raises?
We started the project back in September / October 2020. So we raised funds from private token buyers to finance the development of our alpha and initial testnet product. These private token buyers were initially set for an 18 month linear vesting schedule. And we just increased the vesting schedule to 24 months.
If we conduct any future token sales in the private market, it would be over a long vesting schedule. However, we do not have plans to do so at this time.
7. What is the use case of the $UMB token and how does it capture the value of the ecosystem you’re building?
You can think of $UMB as a governance token with liquidity provider features. I say this because we run a delegated proof of stake. As a $UMB holder, you can elect your representative in the governance of the project / foundation.
Also as part of the delegated proof of stake system, token holders get a share of the user fees as well as any rewards paid to validators for their participation in the network.
So as our system grows, the token should reflect the increased value of the network both from governance and user fees.
TWITTER QUESTIONS:
8. Are you using multiple sources to rule out Oracle error or data manipulation? What happens if the data of one supplier differs significantly from the answer of others?
We definitely use more than one source of data for our oracle. We think that’s important to prevent the flash loan and data manipulation hacks that are so prevalent these days.
For our options pricing data, we went as far as to create our own models for calculating implied volatility and the greeks because we were only able to find one good / reliable source. That’s how important we feel it is to have more than one source.
We also go through a data sanitization process where we eliminate outliers. So if a data source is outside an acceptable range relative to the other data sources, we will not allow it to impact the final price feed.
9. What are your top 3 things for priorities in 2021? Could you share some plans for the upcoming year?
First is to get our product to mainnet. We have our public testnet starting on March 15. And we’re incredibly excited about that. It’s our chance to work with external partners including DeFi projects and validators to get feedback and improve our product before we release on Mainnet.
Second is to begin development of multi-chain support. We’ll initially start with Binance Smart Chain and Huobi Heco Chain. But then we’ll add Polkadot, Elrond and others.
And finally, decentralizing governance. Implementing DPoS will be a multi-step process. And we believe we can achieve this in 2021.
10. As a token holder and investor, can I stake your native token $UMB in the long term? What benefits / incentives can I get by holding $UMB ?
Today, you can stake your tokens and receive rewards in the form of rUMB. rUMB is our rewards token which is redeemable for UMB at a future date.
Here’s a guide to how to stake and the rewards: https://medium.com/umbrella-network/how-to-stake-your-umb-tokens-on-the-umbrella-network-a-step-by-step-guide-e8413f08c598
Next, we’ll implement DPoS where for staking your tokens with a validator, you can participate in both the rewards and the sharing of fees.
So there are multiple ways you get rewarded for staking in our network.
QUIZ:
- What consensus mechanism does Umbrella Network use?
Delegated proof of stake
2. alright. Here’s an unplanned question. What is the name of this character from the sticker I posted earlier?
he man
3. What is the maximum number of tokens Umbrella will mint?
500 million
SAM KIM: The maximum we will ever mint is 500 million. We currently have minted far less. But that is the absolute max allowed.
4. Moving on to our upcoming public testnet. How many data pairs will Umbrella Network launch with on March 15?
750
5. Alright, moving on to our last question…
We announced our first external validator today. InfinityStone. And we will have additional validator announcements coming up.
But… What are Umbrella’s decentralized nodes built on?
merkle tree based sidechain
SAM KIM: Fantastic. Yes, we use a merkle tree to aggregate all the data into a single blockchain transaction
LIVE SESSION:
- 𝐔𝐦𝐛𝐫𝐞𝐥𝐥𝐚 𝐜𝐨𝐦𝐞𝐬 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞𝐬𝐞 𝟑 𝐟𝐞𝐚𝐭𝐮𝐫𝐞𝐬: 𝐬𝐜𝐚𝐥𝐚𝐛𝐥𝐞, 𝐬𝐞𝐜𝐮𝐫𝐞 𝐚𝐧𝐝 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐲 𝐨𝐰𝐧𝐞𝐝. 𝐂𝐨𝐮𝐥𝐝 𝐲𝐨𝐮 𝐞𝐱𝐩𝐥𝐚𝐢𝐧 𝐦𝐨𝐫𝐞 𝐚𝐛𝐨𝐮𝐭 𝐔𝐦𝐛𝐫𝐞𝐥𝐥𝐚’𝐬 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲 𝐬𝐲𝐬𝐭𝐞𝐦 𝐚𝐧𝐝 𝐰𝐡𝐲 𝐲𝐨𝐮 𝐝𝐞𝐜𝐢𝐝𝐞𝐝 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐭𝐡𝐞 𝐩𝐫𝐨𝐣𝐞𝐜𝐭 𝐥𝐚𝐫𝐠𝐞𝐥𝐲 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐲-𝐨𝐰𝐧𝐞𝐝? 𝐈𝐬 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲 𝐭𝐢𝐞𝐝 𝐭𝐨 𝐚 𝐜𝐞𝐫𝐭𝐚𝐢𝐧 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐲?
Like most of you, I got into crypto initially because of the power of decentralization. I believe that it ensures the security of the system more than trust in a centralized institution. By putting the ownership in the hands of the community, I believe we’re removing the need to trust. Unfortunately, existing oracles don’t feel that way. They want to hold the power and own the system themselves. I believe oracles are too important of a piece of infrastructure to allow a single player to have that much control and power.
2. 𝗛𝗲𝗹𝗹𝗼 @kimsamjoo 𝗜𝘁 𝘀𝗮𝘆𝘀 𝘁𝗵𝗮𝘁 “𝗨𝗺𝗯𝗿𝗲𝗹𝗹𝗮 𝗽𝗿𝗼𝘃𝗶𝗱𝗲𝘀 𝗮𝗰𝗰𝗲𝘀𝘀 𝘁𝗼 𝗱𝗮𝘁𝗮 𝘁𝗵𝗮𝘁 𝘄𝗮𝘀 𝗽𝗿𝗲𝘃𝗶𝗼𝘂𝘀𝗹𝘆 𝘂𝗻𝗮𝘃𝗮𝗶𝗹𝗮𝗯𝗹𝗲 𝘁𝗼 𝗕𝗹𝗼𝗰𝗸𝗰𝗵𝗮𝗶𝗻 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗲𝗿𝘀.” 𝗕𝘂𝘁, 𝘄𝗵𝗮𝘁 𝗶𝘀 𝗿𝗲𝗮𝗹𝗹𝘆 𝘁𝗵𝗶𝘀 𝗻𝗲𝘄 𝗱𝗮𝘁𝗮 𝘁𝗵𝗮𝘁 𝗨𝗺𝗯𝗿𝗲𝗹𝗹𝗮 𝗲𝘅𝗽𝗼𝘀𝗲𝘀? 𝗔𝗻𝗱 𝘄𝗵𝘆 𝗱𝗼𝗻’𝘁 𝗼𝘁𝗵𝗲𝗿 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁𝘀 𝗵𝗮𝘃𝗲 𝗮𝗰𝗰𝗲𝘀𝘀 𝘁𝗼 𝘁𝗵𝗲𝗺? 𝗛𝗼𝘄 𝗱𝗶𝗱 𝗨𝗺𝗯𝗿𝗲𝗹𝗹𝗮 𝗮𝗰𝗵𝗶𝗲𝘃𝗲 𝘁𝗵𝗶𝘀?
Bringing data on chain for traditional oracles is expensive. To write one piece of data on chain per transaction. So they have to be very selective in what data they will support. We do not have that limitation. So we can add data that will be used infrequently to data that is in high demand.
3. There are many L2 solutions coming to market these days. What differentiates Umbrella Network from other L2 solutions?
I believe 2021 will be the year of the L2. It’s very much needed. But unlike the others who are generalized L2s that support all types of projects, we built a custom L2 purpose built for an oracle.
Therefore it is faster, more cost effective and scalable because it is built specifically for our use case.
4. Referring to the staking. In the next 4 years the number of tokens will increase to 500 million and the number of people who stake will of course increase as well, this will result in a low APY. How does the umbrella team make this staking feature still feasible and attractive?
Good question. Yes, there will potentially be 500 million tokens. Many of those tokens will be held by the foundation, development fund, etc. And those will not be staked. Second, 500 million is the maximum. We are not required to mint all 500 million. And finally, we will be increasing the types of rewards a staker is eligible for. For example, we will be sharing user fees in the future. So you’ll have access to rewards and user fees.
But naturally, the yield will decline as the denominator / # of tokens staked increases.
5. How so Umbrella Network allows for batching data to smart contracts accurately, securely, and inexpensively?
The short answer is YES
We can batch data via an API along with the Merkle proof / cryptographic proof for you to validate the data’s accuracy.
Thank you guys for your time today. And thanks for the questions. Really enjoyed spending this past hour with you. Please join us in our community TG to learn more.
It was a pleasure having you in our group today, Sam, for this very informative session. Anything else you’d like to say? Where can we follow you to stay updated?
Once again thank you. And see below for the different ways to stay in touch and join our community.
Website: https://www.umb.network/
Telegram: https://t.me/umbrellanet
Litepaper: https://www.umb.network/wp-content/uploads/2021/02/umb_litepaper_design_v3.1.pdf
Umbrella Announcement channel: https://t.me/umbnetannouncement
LinkedIn: https://www.linkedin.com/company/umbrella-network
Twitter: https://twitter.com/umbnetwork
Medium: https://medium.com/umbrella-network
Discord: https://discord.com/invite/
***AMA Concluded***
Join the discussion on Telegram at https://t.me/umbrellanet
