Umbrella Network: BSC Month Kickoff

Achieving True Decentralization on Binance Smart Chain

In 2017, thanks to some good friends, I discovered Ethereum. Like so many of you reading this, it altered my career path and my ideals on how businesses should operate. Any ability to codify business rules and remove the need for a trusted intermediary was, and is still, profound. I embraced it wholeheartedly and believed nothing could rival the technology, community, and innovation found within Ethereum.

At my previous company, Lucidity, my team lived and breathed all things Ethereum. We watched streaming videos of EdCon Toronto, including the somewhat awkward Badger Dance. We joined the Learn Plasma group and worked feverishly to finish our More Efficient Plasma Cash implementation in the middle of our greatest week together at Devcon Prague in 2018.

I think it’s safe to say that we were “Ethereum Maximalists”. However, we always knew that the future would be a multi-chain, interoperable world. And so, the time has come for Umbrella Network to evolve with the shifting ecosystem, and move much of our computation and Proof of Stake consensus to a new chain that can help us achieve our two main business objectives: 1) to drive the cost of on-chain data as low as possible, and 2) to be fully decentralized and community-owned & operated.

We did not make this decision lightly. In fact, we agonized over it quite a bit. We are still strong believers of Ethereum, especially ETH2.0, and we will continue to run our oracle there. However, we’re excited about what the future holds for Umbrella Network and the community on Binance Smart Chain.

So what does #BSC offer that Ethereum cannot? For one, it is faster and, more importantly, it is significantly more cost effective. Ethereum has been a victim of its own success and is among the most widely held “investments” in crypto. Thus, its price reflects increased popularity in both Ethereum and crypto in general. Furthermore, there is actual usage on Ethereum that is leading to network congestion and has thus sustained and persistently elevated the price of gas (Gwei) which means that transactions on Ethereum are expensive, slow, and, oftentimes, will fail to even successfully execute.

The high costs of the Ethereum network clearly make it more difficult for us to achieve our first objective: to be the lowest cost data provider. High transaction costs means higher data costs. Surprisingly, it also makes it harder, if not impossible, for us to achieve our second goal: to be a community owned and operated oracle.

Umbrella Network aims to be a community owned oracle running on a Delegated Proof of Stake (DPoS) system. To achieve this, validators/nodes should be within our community and include individuals and small operators as well as large, well-capitalized professional validators, reflecting the community at large. Even though we are the lowest cost oracle, each consensus round results in an Ethereum transaction that can cost as much as $35 and when Gwei spikes, it can be significantly more. Given that consensus is repeated every 1–3 minutes, the cost to be a validator can be prohibitively expensive for non-professional validators. If we assume $35 cost per consensus round every 3 minutes, that translates to over $16,000 per day in costs. This is why we have only 3 professional validators currently running on Ethereum. While they have been fantastic partners that we love working with, it is not a true reflection of our community. Shifting over to BSC will immediately allow us to change this dynamic.

The cost of running a validator on BSC is 99% cheaper than what it costs on Ethereum. At 1% of the cost of Ethereum, we can put the control and ownership of Umbrella Network into the hands of the community and increase the number of validators on our network.

When we set out to launch Umbrella Network last year, it was always a primary objective to be a fully decentralized, community owned project. And now, we can begin to move towards that goal ahead of schedule, and our validators can be a true reflection of the broader community.

As we launch on Binance Smart Chain, we have dedicated May as BSC Month. Our team has been working hard on developing our product and platform, forging new partnerships, and strengthening our overall solution. I’m really looking forward to sharing much more exciting news with you and the rest of the community as we focus on BSC for this month and beyond.