Into The Umeeverse with Shade Protocol

Brandon and Woz discussed their backgrounds in Fintech and how they found the Cosmos and began working together on Umee. Brandon is the head of product at Umee and Woz was one of the first engineers with Umee and built out the oracle side of the protocol that supports the pricing for all the assets. Woz is also working on Ojo, the oracle for the interchain. This product was originally built for Umee, but will be eventually opened to the rest of the Cosmos. The first product released by Umee Crosschain was their leverage module, making them the first Cosmos product focusing on leverage for IBC assets.

Shade and Umee discussed the current state of DeFi and the advantages Cosmos gives to DeFi protocols. IBC and the customizability of blockchains within the Cosmos give DeFi protocols an incredible amount of composability and specialization. Additionally, with the introduction of Interchain Accounts, UI/UX can be dramatically improved. As Cosmos projects reach a more mature stage, in combination with the technological stacks present, the Cosmos ecosystem at large is poised for massive growth fueled by DeFi. The teams also discussed the types of collaboration they envision in the future from larger “Hubs” within the Cosmos that are more specialized.

The Umee team discussed details about their leverage module, Borrowing/Lending product and what is on the horizon for Umee’s product development. Umee offers services to ETH and Cosmos, and utilizes Axelar for bridging. Umee plans to eventually implement bridgeless transactions to increase UI/UX for users and further increase capital efficiency of cross-chain assets. 

Umee also built out their own oracle solution to provide better access to on-chain data, and discussed the reasons they decided to build their own oracle services included the scarcity and time delay of data in the Cosmos. Umee utilizes something called historical feature set, which measures the median price of assets over X amount of time, and the leverage module uses that feature set to determine what leverage and position sizes people can take for particular assets. This helps prevent certain attack vectors that have been leveraged in the past to extract value maliciously from borrowing/lending protocols.

When discussing the expansion of collateral options, the Umee team stated they were focused mostly on IBC assets, and are currently focusing on Stride assets and application layer token support. The team noted one of the hardest parts of building out the protocol came from not being Cosmos natives, but with the work they’ve done with Umee they have become experts in the Cosmos SDK and look forward to contributing to other Cosmos codebases.

The Umee discussed the problems they are trying to solve and their intended/expected customer base. Umee is looking to support long tail assets, connect any DeFi ecosystem to data, and unlock capital efficiency in both liquid and illiquid assets to provide deeper liquidity for budding ecosystems. There are a significant number of sophisticated DeFi users in the Cosmos that can’t do what they want to, and Umee and Shade Protocol are both bringing unique and valuable DeFi opportunities to the public.