Umbrella Network — UMB Token Utility Planning 2.0
Umbrella Network has always planned improvements to the token utility of UMB. This is the latest iteration of the project’s plans on how the UMB token will be utilized by the various participants within the Umbrella ecosystem, from the community, to data users, network of validators and more. Today, we’re excited to share some of these developments and updates in our ecosystem that revolve around our native token.
Why These Updates Matter
Token utility is an important part of Umbrella’s ecosystem, with the UMB token designed to help facilitate the transactions and operations between the various participants. By offering clear token usage guidelines, we can align with our project’s long-term vision and enhance the ecosystem’s sustainability.
We have broken down the planning of UMB’s token utility across the different participants in Umbrella’s ecosystem as listed below.
Validators Staking
Our validators play an indispensable role in securing and verifying data within our decentralized network. This will continue to be the case, but as our data usage and overall adoption continues to increase, we will soon be requiring our network of validators to stake a minimum of 50,000 UMB tokens in order to participate in data verification and be a part of the network.
This initiative ensures commitment and rewards those who secure and maintain our network. Stay tuned for additional guidelines, including additional potential rewards and incentives based on a tiered system, in future updates.
Data Users and Ecosystem Partners
Users of our oracle data will continue to be a critical participant within our ecosystem. Moving forward, data users will be encouraged, and eventually required, to stake UMB tokens.
Users will stake UMB tokens and be able to enjoy discounts on our services. Discounts will be tiered based on the amount of UMB tokens staked. So the more that is staked, the less in oracle fees that are paid. The discount and staking amounts will be set after hitting certain pricing thresholds.
Currently oracle fees will be paid by the data user in stable coins. However, we have planned for the option to pay in UMB tokens in the near future, and which would come with a discount as an incentive. The option to make payments in UMB will be enabled after hitting certain revenue milestones.
Buyback Program
One of Umbrella’s key objectives is to increase adoption of our oracle services. Using our oracle includes two separate fees
i) Blockchain transaction fees when updating feeds;
ii) Umbrella Network oracle fee.
Partner projects will cover i) transaction fees in the native token (ETH on Ethereum or rollups for example) and then ii) pay the oracle fee at a price fixed in stable coins.
Umbrella will implement a buyback program using the oracle fees collected to buy back UMB on the market.
The plan will be for the buyback program to be implemented after hitting certain revenue milestones to be announced at a later date.
Community Staking
Community members will continue to be able to stake their tokens and earn rewards. However, as the project continues to collect revenues and grow the Treasury, the current fixed, pre-allocated rewards pool will start to grow from Treasury contributions.
Over time, the goal will be to have the rewards pool continue, with all pool allocations funded by the Treasury. This will ensure a fair distribution to the base of our ecosystem, our community members.
Governance
The power of governance will remain unchanged and will continue to be in the hands of our community. UMB’s utility for governance stands firm, enabling community votes on crucial decisions that shape the project’s trajectory. The voice and vote of token holders will continue to directly impact our future.
The Road Ahead
As we look to the future, we are excited about the potential of Umbrella Network. We believe these updates will help to bring additional clarity and further strengthen the utility of the UMB token.
Both the core team as well as the community council believe that this current plan will help to better align the community, data partners and users, and our validator network.
However, as market conditions, industry practices, and feedback from the community may change, these plans may also be revised and adjusted as needed. We will always look for additional feedback from the community, and inform everyone of any significant changes in advance.
Stay tuned for more updates from Umbrella Network as we continue our journey to bring the world’s data on chain.
About Umbrella Network
Umbrella Network, is a decentralized oracle service that provides blockchain projects with secure, scalable, and customizable data solutions.
Umbrella offers smart contracts a broad suite of solutions, whether it is high frequency pricing updates, aggregating large volumes of data at scale, or providing tailored price feeds for specific needs. Secured by a network of decentralized community validators, Umbrella can provide any data that you need when you need it.
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