Umbria Network - a fast cross-chain bridge, based on a multi-chain liquidity protocol.
About the Umbria Network protocol
Umbria Network — an asset bridge that provides cheap and fast distribution of fungible assets between cryptocurrency networks. It uses a new liquidity provisioning protocol that significantly reduces the cost of transferring funds between chains, compared to traditional mint/burn, lock/unlock bridges, managed by the validator.
The Umbria Network protocol also offers a significant speed to end result improvement for asset bridging between chains, compared to other popular methods. The protocol reduces the cost and increases the speed of the bridging by replacing expensive and slow on-chain operations with a fast and cheap multi-chain oracle system.
Umbria Network has three main protocols:
| Cross bridge assets | allows you to transfer assets quickly and securely. |
| Staking pool | users can earn interest on their crypto assets by providing liquidity to the bridge. UMBR liquidity providers receive 60% of all fees, generated by the bridge. |
| Decentralized Exchange (DEX) | based on a constant product formula and deployed by using smart contracts, fully managed on the network. |
The Umbria DEX does not function like a traditional asset exchange like a stock market with an order book. Its protocol invokes and maintains an automatic market maker mechanism that updates the corresponding token values on every trade. Tokens, available for exchange, are grouped into pairs. The liquidity (volume of available trading volume) of each pair of tokens is determined by a liquidity pool, where lenders lock their funds into the protocol and receive a commission for each block when an exchange occurs. Whenever one token is exchanged for another, the Umbria exchange uses a constant product formula to calculate the value of each token in relation to another in the pair, which ultimately determines the price.
Umbria provides DEX to exchange ERC-20 tokens. The cost of exchanging tokens in the DEX is calculated by the underlying smart contracts of the protocol in real time and displayed to the user before execution. When a user makes an exchange, their token balances are immediately updated. The Umbria exchange is also updating the exchange value of the two tokens. The Umbria protocol can support any standard ERC-20 token pairs, but liquidity must be provided to facilitate trading.
Token exchange
To initiate an exchange by using the Umbria DEX interface, the user must first approve the tokens to be spent. Once approved, the user can complete the exchange.
The Umbria exchange is deployed on the Polygon PoS network, greatly reducing gas fees and speeding up execution times. Compared to Ethereum, the fee for transferring tokens to the DEX to call an exchange is very low. The Polygon PoS network is also capable of completing exchanges in seconds rather than minutes or hours, compared to Ethereum.
Liquidity provision
Users can provide liquidity to Umbria DEX and/or Narni Bridge. DEX and bridge have slightly different liquidity provision structures.
The Narni bridge requires a user to deposit only one kind of ERC-20 token in order to earn commissions when other users chain their assets. A DEX requires both assets of a particular pair of tokens in order to earn commissions whenever anyone exchanges between those assets on the DEX.
Liquidity providers receive a commission whenever there is an exchange within that pair. They can remove their liquidity at any time and automatically receive accrued fees in their wallet. Users can create a new token pair by being the first to add liquidity to that token pair's liquidity pool. It is possible to create a liquidity pool on the Umbria DEX for any standard ERC20 token.