Proposal for Restructuring - Umbrella 2.0

Since Umbrella’s launch, the focus has been on building the product. Umbrella Network is proud of the technology products delivered to date. To list some of these accomplishments: Umbrella has gone live on 6 major mainnets, provides thousands of data feeds at high refresh rates, delivered a random number generator, rolled out multiple pricing solutions for options, and recently launched Passport beta, an innovative solution that can deliver requested data directly into a user’s smart contract.

The recently reported hack highlights the need to complete the ongoing decentralization of the Umbrella network. Below is a proposal for moving forward.

Umbrella DAO Council and Governance
Umbrella Network proposes setting up an Umbrella DAO Council for project governance. The Umbrella DAO Council would consist of:
● 7 members, including the 4 current representatives of the Community Council, which would now dissolve and become a part of the new DAO Council
● The Umbrella DAO Council would not have any current Umbrella Network team members, but senior core team would serve as advisors, at the discretion of the Council
● All members would be subject to KYC
● Umbrella DAO Council to nominate 5 members to create and administer a Umbrella DAO Multi-sig wallet for treasury and associated wallets
● Addresses for all Umbrella wallets would be made public
● Token contract and reward contracts to be administered by Umbrella DAO Multi-sig
● Any future UMB token pools to be administered by the Umbrella DAO Multi-sig
● A constitutional framework for governance to be established as a collaborative effort between the Community Council, top token holders, and the community

Security Council
In addition, a Security Council would be established with the aim of improving the security of Umbrella tech, platforms, solutions, and network. The aim would be to work with leading external funds, blockchain infrastructure providers and blockchain protocols to be a part of this Security Council. Members of the Security Council could be compensated in UMB tokens if determined by the Umbrella DAO Council.

Product Development - Immediate
Umbrella is proposing to just work on three key areas in the immediate short term to refocus product development efforts:

  1. Full assessment, review and cleanup of codebase, including performing audits where needed
  2. Completion of multi-chain solution
  3. Completion of Umbrella’s Passport solution rollout

The current Umbrella oracle operates on a proprietary sidechain where each validator ingests data from various data sources, builds a merkle tree of the key-value pairs and forms consensus on the data. The unique rolled up hash (“root hash”) representing the merkle tree is then written to Binance Smart Chain (the “homechain”). And then it is replicated across the various blockchains including Ethereum, Polygon, Avalanche, Solana and others. There may be a more efficient technical process.

Umbrella Network proposes the completion of the upcoming Multi-chain solution where the rolled up root hash is written directly to each of the blockchains currently supported, and in the future any additional main chains, side chains, Polygon Edge Networks, Avalanche Subnets, layer 2 chains, etc. This new architecture would allow Umbrella to function more efficiently without a homechain bottleneck and be able to scale support for the proliferation of custom sidechain ecosystems that some foresee.

Furthermore, some Dapps are reportedly reluctant to use Umbrella because of the complexity of accessing Umbrella’s Layer 2 data. It currently requires developers to integrate an SDK into their application which goes through a process of (1) an api call to Umbrella’s system; (2) checking the cryptographic proof of the key-value pair received from step 1; and (3) pushing the data into their smart contract.

Umbrella’s Passport solution is intended to address this issue. Completion of the current Passport development and rollout to more easily push data directly to a Dapp. Passport is designed to allow Dapps to set the frequency of updates and what data to update into the smart contract.

Product Development - Longer Term
Moving forward, product development would be based on the approval of the Umbrella DAO Council, with input from the Core team, with any payments made out of the treasury.

Open Sourcing
Umbrella Network proposes open sourcing the oracle system. The broader community of developers would be invited to review the code, find faults, suggest improvements and contribute to the product. A crowdsourced effort combined with professional audits is likely to assure the global Dapp community of the quality, security and safety of Umbrella’s products.

By open sourcing the existing oracle code base, independent developers who currently build their own oracles can implement an instance of Umbrella’s oracle free of charge. However, as they grow as a business, they are likely to need a more professional service that is able to provide an infrastructure of validators as well as more efficient ways to operate the network.

As part of this proposal, Umbrella would continue to develop and operate Passport across all of the necessary networks in order to provide a premium service. If Dapps do not want to develop their own custom solution to access Layer 2 Data, they can simply work with Umbrella’s Passport solution to get data delivered directly to their smart contracts. This premium service would not be open sourced, and it is intended to ultimately generate revenue. Furthermore, Passport would continue to utilize the UMB token as the primary form of payment for data, which may increase the adoption and usage of UMB if Passport gains adoption.

Umbrella Network proposes to cease the financial support of Lucidity, and releasing Lucidity of any obligations to Umbrella and its associated partners. Since the acquisition, initial acquisiiton costs minus revenue derived from Lucidity, total less than $250,000. So at this point in time, the financial burden of continuing to support Lucidity is no longer a viable option.

Umbrella Network Ecosystem Accelerator
Umbrella Network would phase out the Ecosystem Accelerator and has the option to unwind and/or divest its interest in the private rounds of current projects. Any and all proceeds would be sent to the Umbrella DAO Multi-sig wallet. This option does not need to be taken immediately, and can be decided upon by the DAO Council and the community at a later point in time should the need arise.

Summation of proposed action-items:

  1. Establish and elect an Umbrella DAO Council for project governance and treasure oversight
  2. Create Umbrella Security Council composed of external funds, infrastructure providers and blockchain protocol partners
  3. Refocus immediate product development objectives to three key initiatives: full review of current codebase, completion of multichain solution, finish rollout of Passport
  4. Shift other product development objectives to longer term goals post restructuring and under guidance of DAO Council
  5. Open source Umbrella’s oracle system, excluding Passport, which would remain a premium SaaS solution
  6. Discontinue Lucidity funding
  7. Option to unwind Umbrella’s Accelerator Program

This proposal is a high level framework and subject to the Community Council’s approval, community feedback and a subsequent vote for community approval. We will put this proposal to a snapshot vote in the coming days, after getting feedback from the community.


There’s a lot packed into this proposal with some parts that I have questions about. I think it would be better to vote on them individually instead of an all or nothing approach.

Questions about DAO Council

  1. If we’re transitioning to a DAO what does that mean for responsibility of the exploit and any legal actions that may be underway by those affected?
  2. Is the DAO being registered as an official company in some territory?
  3. Where would Sam, John, and other team members sit within the DAO?
  4. If they aren’t part of the DAO, then why?


  1. Was Lucidity a failing business before Umbrella “acquired” it?
  2. How are we expected to vote on this without knowing more about the financials of Lucidity?
  3. If Lucidity is kept, what are its plans to generate revenue?


  1. Does Umbrella have any paying customers at this time?
  2. How many projects are currently using Umbrella?
1 Like

@keith has asked some important questions I do agree with especially about Lucidity, revenue and legal status of the DAO Council. In addition to these, I’d like to know what the role of the larger community will be beyond voting to elect the council.

It is pertinent to ask for reasonable level of clarity from the current team and the extent of the project’s exposure before transitioning to the DAO Council. The project has made significant progress especially regarding cross chain integration however, questions remain about adoption, token utility and future sustainability. I think the team should provide a project status (including revenue stream and obligations) as an appendix to this proposal.


everything described seems like a thoughtful and very complete decision that I hope will lead the project back to where it deserves to be. as an esoero node operator count on us for what we can contribute

Unfortunately, doesn’t look like staked tokens were included in the snapshot.