Umbrella Network Updated Tokenomics
By: Umbrella Network Team
Tags: Tokenomics, Umbrella Network Token, Oracle, Umbrella Network News, Defi

Data underpins everything we do in technology. It fuels our applications, and without it, they would not be able to function. It’s why big data is a $220+ billion market opportunity and one of the fastest growing technology sectors. Companies like Snowflake, a cloud-based data software company, recently IPO’ed for a staggering $70 billion. Within the blockchain ecosystem, oracle leader Chainlink has reached $9.5 billion as of January 2021. The other leading oracle in the market, Band, has also recently achieved $250 million in market cap, while another less mature project, API3, has already reached $100 million. As the blockchain community continues to embrace the growing influence and adoption of oracles and their place in the market, we’re excited to introduce the tokenomics for Umbrella Network’s token, the $UMB.

When we set out on this journey to create a community-owned, scalable oracle, we never imagined the amount of enthusiasm and support we would get from the market, nor the amount of progress we would make developing a robust product and forging strong partnerships across the industry. Currently, Umbrella’s product is already in private testnet, and we’re working with projects like Linear Finance, with whom we recently entered into a strategic partnership. We are confident UMB is on its way to join the ranks of the top oracle projects in the blockchain space. And as a community-owned oracle, we look forward to taking the journey with you.

Table 1: DeFi Oracles by Market Capitalization

On 30 November 2020, we released our Initial Proposal for the UMB Token as a post on Medium. We received an outpouring of support, comments, suggestions and feedback to that blog post. Thank you for your incredible interest in Umbrella Network. And thank you for joining us in our mission to decentralize the governance of oracles and provide the blockchain community the secure and affordable data they so desperately need to run their projects. From your feedback, we have taken valuable input and updated our token plan.

Key Tokenomics Summary:

$UMB to be used in Delegated Proof of Stake as a voting token towards delegated governance

$UMB to be used to earn rewards and share of user fees

Token holders will be able to participate in governance via validator delegates

Total Max Token supply of 500 million $UMB

Long term vesting schedules (> 70% of total token supply will have 4 year linear vesting)

Low initial circulating token supply of 10 million tokens or 2% of total supply

Initial Market Capitalization of ~$500K, based on IDO price

Umbrella utilizes a Delegated Proof of Stake (DPoS) that benefits from the active participation of the community and token holders. $UMB Utility Tokens will serve as both 1) Governance tokens, as well as 2) Staking tokens to generate rewards and a share of user fees.

$UMB Token holders will have the option to stake their tokens with a validator of their choosing in order to participate in the governance of the Umbrella Network. The validator will act as their selected representative, and will be able to use the staked tokens to earn rewards and fees in the Proof of Stake consensus elections. Those fees will then be distributed to the original token stake. At no time will the validator have custody of the tokens.

There will be a maximum supply of 500 million $UMB tokens at any given time. $UMB will be an ERC20 token.

The $UMB token pool has long vesting schedules for almost all participants, including the investors. We were very fortunate to have long-term minded investors who agreed to 18 month linear vesting with ZERO initial unlock. Our team, development fund and other early contributors are all subject to 48 months linear vesting. In other words, the tokens are released over a very long period of time. Umbrella Network’s inflation is low compared to other projects.

As a result, $UMB will have a very low initial circulating supply of just 10 million in circulation, translating to an initial market capitalization of approximately $500,000 at time of IDO. When compared to other oracles in the market with far less product and traction, Umbrella will have a very low market cap.

Table 2: UMB Token Distribution

Umbrella Network is the first decentralized, community owned oracle solution for the DeFi market. We truly believe a community owned oracle is the best avenue to create a product that stays true to the principles of decentralized finance, and that will have longevity and contribute towards the growth and innovation within the industry as it matures. Our tokenomics are structured to reflect that, and as we begin this journey with our token buyers, validators, and partners in the community, we hope you will come along for the ride.