Umbrella Network, the decentralized Oracle Layer-2 solution, officially launched on the Ethereum Mainnet. The company made this announcement on its blog on Friday.
Umbrella Network is a community-owned Oracle Layer-2 network that processes data to provide secure, scalable, and low-cost data. It uses advancements in Merkle tree technology to write multiple data points to a single on-chain transaction, making batching data in smart contracts more accurate and cost-effective. The Umbrella Network believes that a community-owned Oracle solution is essential to creating a truly decentralized financial system.
Blockchain oracles explained
Most blockchains have cryptocurrencies that are used to transfer value and enable the operations of the protocol. Some blockchains also allow smart contracts.
According to Wikipedia, a smart contract is a computer program or transaction protocol that is intended to automatically execute, control, or document legally relevant events and actions in accordance with the terms of a contract or agreement. The goals of smart contracts are reducing the need for trusted intermediaries, arbitration and execution costs, fraud losses, as well as reducing malicious and accidental exceptions.
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However, there needs to be a way for blockchains and on-chain smart contracts to make use of external data off-chain for smart contracts to have real-world applications.
Ethereum.org clearly defines what an oracle is, the oracle problem, and how decentralized oracles solve it. “An oracle is a bridge between the blockchain and the real world. They act as a chain API that you can query for information in your smart contracts. This could be anything from pricing information to weather reports. Oracles can also be bi-directional and are used to “send” data to the real world. “
Blockchain transactions (for example Ethereum) cannot directly access off-chain data. At the same time, relying on a single source of truth to provide data is insecure and invalidates the decentralization of a smart contract. This is known as the oracle problem.
This oracle problem can be avoided by using a decentralized oracle that is drawn from multiple data sources; If a data source is hacked or fails, the smart contract will continue to work as intended.
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Umbrella Network claims that its decentralized network is a superior solution to its competitors. Provides comparatively fast and affordable pricing information. It also says it would make more data pairs available (currently 1,200 data pairs growing to over 10,000 by the end of 2021) than any other oracle in the ecosystem.
According to Cointelegraph, the need for reliable data sources appears to be growing as smart contract technology becomes more common. For example, Brazil’s leading stock exchange is exploring ways to provide data inputs for the country’s central bank digital currency (CBDC) project.
Umbrella Network Mainnet Launch on Ethereum
The launch of the Umbrella Network mainnet on Ethereum means that it implemented smart contracts on the Ethereum Blockchain. This means that Ethereum-based dApps can communicate with Umbrella Network code in the live environment, requesting and obtaining reliable, comprehensive and profitable data.
ETH price at $ 3,431 | Source: ETHUSD on TradingView.com
Speaking about the mainnet launch, founding partner Sam Kim said: “We are absolutely delighted to be able to achieve this important milestone. We will now be able to meet the needs of the larger DeFi community with our decentralized oracles and will seek to address the real challenges facing the community in regards to the high cost and low availability of data offerings in today’s ecosystem. “
The company has been busy with acquisitions and new products in recent months. In May, the network was launched on the Binance Smart Chain (BSC) mainnet. The Umbrella network also stated its plans for future cross-chain integration with Polygon, Solana, Cardano and Avalanche, in the coming months. At the same time, he mentioned the launch of his in-house developed Token Bridge next week. This allows for smooth transfers of $ UMB through all supported Blockchains.
Featured image from @UmbNetwork on Twitter, chart from TradingView.com