Umbrella Network AMA w/ KuCoin Exchange: Recap
Umbrella Network’s President, John Chen, was recently invited for an AMA by KuCoin Exchange to answer questions from the community.
AMA at: Kucoin Telegram Channel
On: Friday, 8th October, 2021 | Time: 11:00 AM UTC
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.
The transcript is almost entirely in its original AMA form, mildly edited for punctuation and readability only.
*** AMA Starts ***
PART ONE:
Q1. Can you briefly tell us about the Umbrella Network?
Yes, sure. Umbrella Network is a decentralized, community-owned, Layer-2 data oracle for the blockchain and DeFi ecosystems. We bring data on-chain that other oracles simply cannot, and at a lower cost and far higher scalability than anyone else in the market. We are one of the first truly decentralized oracle solutions that use Delegated Proof of Stake consensus for validating data.
Umbrella Network solves one of the biggest problems that the DeFi and blockchain industries face today: the high cost of getting data on-chain.
We mitigate this by using a system of Merkle trees on a Layer-2 sidechain to aggregate thousands of pieces of data together and store it on a single blockchain transaction.
In comparison, leading oracles today take one piece of data which is then written in a single transaction. This one-to-one relationship is massively more expensive, slower. and less secure.
This is why current oracles only support limited amounts of data. Umbrella Network makes more data available and at a far lower cost than any other oracle in the market today.
Q2. How is the Umbrella Network different from other oracles? What are your key differentiators?
Oracles play a vital role in the blockchain ecosystem. Without oracles, smart contracts would have no access to real-world information.
Imagine a computer without an internet connection or a mobile phone on airplane mode. It’s just not going to be that useful. Oracles are the bridge that brings real-world data onto the blockchain.
What makes Umbrella different from others, like I briefly mentioned before, is our ability to aggregate data via a Layer-2 solution using Merkle trees. This allows us to bring thousands of data points, even hundreds of thousands of data points, to the blockchain in a single transaction, while the other oracles only bring one data point per transaction.
So whether it’s the price of BTC/USD, ETH/USDT, or the entire S&P 500, all of it is aggregated and put on-chain at once. This key advantage brings all sorts of benefits, from allowing us to offer data at a significantly lower cost, to being able to provide more data options, to being able to update data much more frequently, than anyone else.
So while most other oracles offer a few hundred data points at most, we currently offer over 1,200 data pairs. This is about to change to 2,000 data pairs by next week as we are rolling out a new options pricing data package. And right now it’s all for free.
we plan to have over 10,000 data pairs available by the end of this year, with the ability to efficiently scale to much more as we head into 2022, given how easy it is for us to onboard more data.
Q3. As a data oracle, it’s very important to have accurate, secure data. Can you talk a bit about how Umbrella addresses these key concerns?
We obtain data from multiple data sources, including from high-end, premium, and professional data aggregators. This means that we have several layers of data validation.
The first is having paid, professionally aggregated data that already has cleaned and sanitized data being pulled from multiple sources. The second is, from Umbrella’s standpoint, where we then take these multiple sources of data, including these aggregated data sources, and then run a consensus on that data to ensure accuracy.
We use Delegated Proof of Stake consensus, which we believe offers a more fair and democratic way to run consensus, as token holders have the ability to vote, or delegate, which validators will represent them in the consensus rounds. So Validators must act in the best interests of those voters, or else they may lose the privilege to participate in consensus.
Additionally, we operate a community-driven network of validators, meaning it is not just professional validators that we choose, but almost anyone in our community can operate a node, which we believe is a better way of securing the network.
As we scale this out, which will further strengthen security, it also allows us to be truly decentralized. In contrast, other oracles do not have community run validator networks, with many opting instead to have a more centralized Proof of Authority system where they select who can be a validator, and as a result, it usually ends up being a few very large and well-capitalized professional node operators versus a larger network which is more secure.
Q4. Apart from the plan to have over 10,000 data pairs available by the end of this year that you mentioned earlier, what are your major goals over the next 6 months?
We’ve got a lot of goals, but the three major ones are:
1) To get significant adoption and usage of our oracles. We are currently live on both BSC and Ethereum mainnet, having just gone live on ETH at the end of last month in September, so we are now focusing on getting applications in those ecosystems to start using our oracles.
We have forged over 40+ partnerships over the past half a year, and now it’s time to start getting some of those projects to start to integrate, and for some, to start building custom data feeds based on their needs.
We’re seeing projects that have been having challenges with existing oracles being unable to support their data needs, so it’s refreshing to be able to support and fill in those gaps.
2) As a layer 2 chain-agnostic solution, our aim is to be multi-chain interoperable, so another goal is to continue to expand support for more chains, as we want to be able to support as many ecosystems and applications that need data as possible.
We are currently live on BSC and ETH will be going live on Polygon by the end of October and on Solana by November end. Then we will also look to support Cardano, Avalanche, and Polkadot in the first half of 2022. Following this, we will continue to assess which layer 1 protocols and ecosystems we want to support and continue to extend support.
3) And finally, to continue in our path to true decentralization. We will be launching our DPOS consensus mechanism in Q1 of 2022, and continuing to expand our community validator program to allow more and more people to operate validator nodes from our community. This will further our aim to be fully decentralized, and further increase our overall security.
Q5. Thanks John for sharing your 3 major goals for the coming 6 months.
So one of your main objectives is to get significant adoption and usage of your oracles.
Can you talk about some of the potential use case scenarios?
Yes, that’s a major focus for us right now.
To be honest, the potential use cases are essentially limitless. Almost every application on the blockchain needs access to data. Any financial application, trading, or lending platform, will need access to various types of financial data, and that is where an oracle is needed. The majority of blockchain-based games will need a verifiable random number generator among other things, and that is best provided by an oracle.
Any application that needs real-world data, whether that’s stock quotes, healthcare data, real estate prices, e-commerce data, supply chain information, or any sort of advanced computational capability that sometimes might not be feasible to run on the blockchain, can use an oracle. As more applications move to the blockchain, the need for various data from oracles will continue to explode.
And there will be many more novel and innovative use cases for data, some of which we can only imagine today. An Uber can’t exist yet on the blockchain today because of the current limitations, but that will change soon.
But many of these scenarios are ones that Umbrella can support because we are able to bring data on-chain at massive scale, and at a incredibly affordable costs, and we are also able to support complex off-chain computations.
These are all issues that other oracles today continue to struggle with.
Q6. I see.
I happened to have the chance to search Umbrella Network on Google and found these…
Hot off the press and one of the big things in the news recently has been Umbrella’s acquisition of Lucidity.
Can you discuss a little about that, why you guys made the acquisition, and what that means for the project?
Yes, we recently announced the acquisition of Lucidity, which is the leading blockchain-based marketing analytics & oracle solution in the advertising tech space. This will bring on some major benefits for Umbrella.
While there has been a lot of progress made in certain industries like financial services to embrace blockchain technology, most enterprise verticals have not. There is a tremendous opportunity to disrupt these legacy industries.
Lucidity has made great strides in penetrating the digital media and advertising vertical, which is almost a half a trillion-dollar industry as of last year, and growing rapidly. More money is now spent on digital advertising than through traditional mediums like TV, radio, and print.
We can classify the benefits primarily in a few areas. Lucidity already has major blue-chip clients using their platform, clients like Samsung, Hyundai, KFC, among others. Acquiring Lucidity allows Umbrella to immediately and successfully enter this enterprise market, and have this A-list roster of clients using our tech to process data.
Furthermore, the high volumes of data transactions from these clients will make Umbrella the largest blockchain oracle in the world in terms of the volume of data processed. And this is just the beginning.
Enterprise represents multiple trillion-dollar market opportunities, and because we are well equipped to handle high volume data transactions on the blockchain, we will be looking to enter more enterprise verticals to try and disrupt additional markets.
So overall, there are major benefits including getting an A-list, household name roster of clients, immediately being able to penetrate and enter into a traditionally hard to enter and high growth enterprise market, and leapfrogging past all the other oracles in the market to now become the largest oracle in terms of data processing. And to top it off, since Lucidity is already revenue-generating, this will be an accretive deal.
Q7. And I assume we can expect more acquisitions in the future.
We will be opportunistic and continue to look for partnerships that make sense for the project, whether that’s an acquisition, investment, or others. So, yes!
Q8. Moving on to your token, $UMB…
Could you please tell us about the $UMB token, its total supply, and its features?
Yeah, sure! So the $UMB token is our native utility token that sits at the center of the Umbrella Network ecosystem. From staking and validating data to paying the fees for data access, $UMB is what drives it all.
Our tokenomics structure is very decentralized too. The majority of our tokens, 60%, are allocated to the community, who will ultimately be responsible for selecting validators, participating in governance, staking, performing consensus, among others.
The current circulating supply is about 85MM. The maximum supply is 500MM, though that’s just the theoretical cap which we will not end up utilizing in its entirety. As we are community-driven, there could be more token burns or other deflationary measures that are implemented in the future, should the community vote to do so.
And currently, to reward long-term ‘hodling’, we have very attractive staking/rewards programs in place. Last time I checked, APYs ranged from around 90% on our Hadley Stream to up to over 450% for our Polar Stream staking, both of which are on Ethereum. And these staking programs will be around for at least the next 3–4 years, with new ones planned as we continue to expand. For more information on our programs, you can visit https://staking.umb.network.
Q9. Umbrella Network is a community-driven project indeed 💪👏👍
As I’ve mentioned earlier, you guys have been getting a lot of press lately, having listed with us at KuCoin, making the Lucidity acquisition, going live on ETH Mainnet, all within the span of a few weeks. And some media outlets have been labeling you guys a potential “chainlink killer.” How would you respond to that?
I mean, while it’s nice for the media to try and put out that type of messaging, we don’t feel that way. Mainly because we believe that the oracle market is going to be massive and there will be room for many players. We’ve got a lot of respect for what Chainlink has done and are doing right now. They have a first-mover advantage and are the dominant force today in the oracle space. But we do believe that while they have their areas of focus, we also have our areas of advantage.
We can process data at far larger scales, and much more frequently; so for projects that are looking for large quantities of data feeds, or for very frequent data updates, or the building of very complex data feeds that require a lot of off-chain processing, we believe we are better equipped to service those needs.
We are already encountering situations where projects that are frustrated with the limitations of today’s oracles, when it comes to prohibitive costs and limited data variety, are coming to us for a solution.
And as another example, there isn’t any other oracle on the market today that can handle the big data volume processing that Lucidity does, or that a lot of enterprise applications are looking to do, but which is something that Umbrella is built to handle. So I think at the end of the day, every oracle will have its area of advantage. We will certainly have ours.
Q10. For my final question…
What gets you really excited about the oracle space, and how do you see Umbrella making an impact long term?
What’s really exciting for me is the fact that it’s just an early stage for the oracle space, there are limited players yet, and true innovation in this space is just beginning to happen.
The ultimate goal for Umbrella is to try and make the cost of bringing data to the blockchain as close to zero as possible.
Right now, it’s incredibly expensive to bring data on-chain. Because of that, you see very limited amounts of data available for applications to use, a lot of the data is not refreshed often, sometimes only once a day, and data that may require complex computations may not be easily produced due to the high costs of on-chain computations.
When these issues are solved, we expect a huge explosion in innovation in the types of applications that can be built on blockchain. Umbrella’s solution looks to solve a lot of these issues and to bring massive quantities of almost any type of data you can imagine onto the blockchain.
We are able to provide those features, and with it, we hope, the ability to truly help the ecosystem innovate with advanced applications and uses that we can only dream of today. And to top that off, it’s been amazing to work with our team who’s just been working so hard to meet our aggressive roadmap milestones and deliver an amazing product that our community and network of partners can be proud of.
We are hoping to make an impact in the oracle space and help all the developer’s and applications being developed in the ecosystem with their data needs.
PART TWO:
That wraps up the first part of the AMA session. Thank you John for a very informative and insightful Q&A session.
Let’s now proceed to the free-ask section.
Q1. Can you tell us about the motivation and benefits for investors to hold UMB tokens in the long run? What plans do you have to help drive the demand and scarcity of UMB token?
We have several initiatives in place to try and have investors in our project for the long term. One of them is our staking program, which currently has very attractive APYs for holding.
The staking yields reward tokens, which are redeemable 1:1 for our UMB token when a certain milestone is hit, or when we get to a certain date in time, whichever comes first. The other way that we try to keep our community of token holders on board is just to keep on consistently delivering against our roadmap. We’d like to think that those that are long-term supporters believe in our vision and long-term potential, and as we continue to deliver and execute, will continue to build more value into our ecosystem.
Q2. Nowadays NFTs & blockchain games are quite popular.
How do oracles (especially Umbrella Network) play a role in this new trending industry?
I mean, it seems that this new sector needed some different approach for oracles to provide the data.
Is Umbrella Network ready for this or maybe you’ve already prepared to do some innovation/modification to keep up with these changing trends?
We are working on some exciting features in the NFT, Play2Earn, and blockchain gaming space.
We are rolling out a verifiable random number generator later this month which will be a vital component for blockchain gaming.
So we are very active in this space as we see huge potential. Stay tuned for announcements around this in early November from us!
Q3. Why did you choose ERC-20 to support Umbrella Network, despite the Network having such a high gas fee for transactions? Isn’t it a limitation to Umbrella Network? Are there plans to develop your own network? Thank you!
As a Layer-2 solution, we are actually chain-agnostic. We chose ERC20 initially because that’s where the biggest ecosystem of projects is. As for us, we just want to be where the developers, applications, and data needs are.
And quite frankly, we have the most to offer to applications in the Ethereum ecosystem because of that very issue. All applications are faced with high gas fees when trying to access data.
Because of our solution architecture, we can provide massive cost savings to projects when it comes to accessing data, building custom data feeds, etc on Ethereum exactly because of that reason.
Q4. Do you recognize the community as an important part of the development of the project? Do you have any future Umbrella Network community development plans? Do you have a local group for countries that are not good at English? @chen225
As a community-owned project, the community is obviously incredibly important to us. We are always listening to the needs of the community, have set up a Community Council of representatives from the community that we meet with every single week, and who help to vote on governance-related issues as it relates to our project.
We have community votes when deciding on certain actions to take, such as token burns, staking policy decisions, and other items that are relevant to the community.
Even the development of some of our product features, such as our Verifiable Random Number Generator, ended up being prioritized because of feedback from our community. And that component will continue to take an even larger proportion to our overall governance as we transition to full DPoS consensus in the coming months.
So yes, this is a vital part of our project.
Q5. The biggest barrier for DeFi is that of interoperability, providing cross chain interactions and multiple blockchains. How does Umbrella Network solve this?
So like I mentioned earlier, one of our major goals over the next 6 months is increasing our support to additional Layer-1 chains, but a critical component for that success is to be cross-chain interoperable. We are about to launch our own cross-chain token bridge by the end of this week, which we have been developing inhouse, and it will be a critical component of our overall architecture.
Initially, our bridge will just be able to move our own UMB token between chains, but we will be looking to release future versions that will be able to potentially support additional tokens, not just our own, as well as different assets beyond just ERC20 or BEP20 tokens, but possibly NFTs and other digital assets.
That’s it for our AMA guest. Let’s give a round of applause for John 👏👏👏
It has been a great experience to have you as our special guest for this AMA session. Thank you for gracing this event.
Is there anything else you would like to share or you want us to know, John @chen225?
Thanks @SteveBaillie for being a great host! Thanks everyone for your time! Please come by and visit our community if you have any further questions or want to learn more about Umbrella, we have an awesome and friendly community to help you guys! Here are some of our socials:
Telegram Community — https://t.me/umbrellanet
Telegram Announcements — https://t.me/umbnetannouncement
Discord — https://discord.gg/G9x4TsHSd7
Twitter — https://twitter.com/umbnetwork
Medium — https://medium.com/umbrella-network
Website — https://umb.network/
***AMA Concluded***
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