Decentralized finance protocol Umbrella is the latest to make a move from Ethereum to the faster and cheaper Binance Smart Chain.
In an announcement on May 4, the Umbrella Network cited escalating gas fees on Ethereum as the reason for the migration. While the Ethereum transaction to get a data point on-chain might cost $50, that same transaction might only cost 50 cents via BSC, it stated. “The high costs of the Ethereum network clearly make it more difficult for us to achieve our first objective: to be the lowest cost data provider. High transaction costs mean higher data costs,”
Umbrella acts as a bridge between smart contracts and off-chain data feed to provide oracles for the DeFi sector.
🔥 IT IS OFFICIAL !!!🔥
The month of #May is #BSCmonth for $UMB.
We've got a spate of partnership ANNs with innovative #BSC companies lined up.
Read the #kickoff post by @samislucid to get a sneak-peek 👇👇https://t.co/GFBBeOjWOH#MayThe4BeWithYou
— Umbrella Network (@UmbNetwork) May 3, 2021
BSC Momentum Growing
The announcement added that the team is still very excited about ETH 2.0 but in its current state, the network is too expensive for daily operations. The Umbrella Network aims to be a community-owned oracle running on a Delegated Proof of Stake (DPoS) consensus system.
Smaller-scale community validators will struggle with the high costs of validating blocks though this is not much of a problem for the whales. Umbrella estimates costs for running a node on Ethereum when gas prices are high. The Umbrella Network stated, “If we assume $35 cost per consensus round every 3 minutes, that translates to over $16,000 per day in costs.”
It added that the cost of running a validator on BSC is 99% cheaper than what it costs on Ethereum, enabling the protocol to put the control and ownership of the network into the hands of the community and increase the number of validators.
Umbrella is the latest in a long list of DeFi protocols migrating to BSC which has seen its daily transaction figures skyrocket to record levels. Binance boss Changpeng Zhao, who never misses an opportunity to bash Ethereum, acknowledged the record which is currently at an ATH of 9.1 million transactions according to BscScan.
UMB Token Price Update
The Umbrella Network’s native UMB token has reacted strongly to the news pumping 13.7% on the day to reach $0.78 at the time of writing according to CoinGecko.
Moreover, UMB has yet to revisit its all-time high which came on Feb. 10 when it hit $2.62. However, if Binance does its usual thing in plugging its partners and launching some yield farms for the token then it won’t be long before it heads that way again.
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