Umbrella’s Approach To Solving The Problem Of Layer-1 Data Feeds

Aniel Essien
3 min readJun 18, 2022


Over the last several years, I’ve had the privilege of witnessing the advent of something that would change the face of blockchain forever when it finally reaches its peak: decentralized oracles. This is a technology that is steadily eliminating a host of intermediaries which administer access to our data while charging us for the cost and regulating our many priceless assets. With decentralized oracles, we can now change the way we transact, borrow, bank, and save. And frankly, I think it’s about time.

Umbrella Network is at the forefront of this evolution by being the first 100% decentralized oracle that provides highly scalable, secure, and affordable solutions for smart contracts. Developers in blockchain now have access to data that used to be unavailable to them and the cost is too good to be true. No other oracle in the blockchain industry lays claim to the low cost offered at Umbrella Network and data is not left out in this streak of excellence. Umbrella Network offers more data than the average oracle in the ecosystem with more than 1,200 data pairs.

Now while this Layer-2 decentralized oracle solution anchors data to Layer-1 Network by utilizing Merkle trees for data point verification, one major snag is present in this otherwise seamless architecture. The whole logic, transmission, and storage of these oral solutions functions on the Layer-1 itself. Hence when a data request is initiated, the oracle demands a fee for the transaction before transmitting it to the smart contract.

Here are the background dynamics of this process. The oracle’s nodes work collectively to create a consensus for writing data while the oracle writes every request for data to the on-chain for a fee. However, with every request, fees are liable to spiral out of control; causing on-chain data to become pricey for developers to utilize.

Umbrella Network solves this problem by using a sidechain with decentralized nodes scalable of pulling required data from sources off-chain and arriving at consensus through an on-chain smart contract. Why sidechains? The answer is simple. Sidechains are scalable and cost-effective.

Here are some salient points to also note:

Nodes derive data from different APIs

Layer-2 data is stored by designated leader nodes on the Merkle Tree while First Class data is stored on-chain

Sidechains of decentralized nodes

Nodes come to a consensus through an on-chain smart contract

The validator registry in Umbrella Network oversees the sidechain’s validators as a Smart Contract. Its functionalities are:

HTTP(S) node location




Ethereum Public Address

In consensus under Umbrella’s Validator Registry, the power of votes is determined by how many tokens have been staked. Delegators can also select a validator to go cast votes in their stead. Finally, sidechain blocks are mined and stored on the chain contract with blocks mined only after “N” seconds. This is also known as padding. And for every sidechain block, a leader is generated from each validator as long as it is available.

With Umbrella Network, users can have an all-around package in terms of speed, concision, affordability, and cryptographic verification.

About Umbrella Network

Umbrella Network is a scalable, decentralized, and community-owned oracle that utilizes Layer 2 technology to integrate real-time data into smart contracts for accurate and timely reports. Umbrella Network brings the world’s data to blockchains to enable DeFi applications to perform at the optimum level regarding precise information dissemination.

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Aniel Essien

A realist | a Blockchain Enthusiast | iWriteCoolShit