Everything You Need to Know About Tellor (TRB)
Many cryptocurrency projects set their main goals to be connected with oracles. In our case, oracles are data feeds from external systems that feed crucial information into blockchains. Smart contracts then need to execute these under specific conditions.
As one can imagine, this can be very difficult to operate for several reasons, one of which is the size and trustworthiness of the data coming through. Tellor, our spotlight project today, is trying to solve this issue via a special set of technologies and features that it implements.
What is Tellor?
Tellor (TRB) is a blockchain-based decentralized oracle network, which is connecting smart contracts on Ethereum to different external data feeds. It is based on Ethereum, with Tellor Tribute (TRB), the token behind the network, adhering to ERC-20 token standard.
Tellor is secure, transparent and designed in such a way that it focuses on decentralized finance (DeFi) built on Ethereum. Thanks to this, Tellor can help with provision of valuable off-chain data for Ethereum smart contracts, while keeping all the external data feeds stable and reliable.
The way Tellor does this is quite neat, since Tellor allows smart contracts to connect to on-chain data banks, which are created by staked miners on the network. Through this, Tellor creates not only an ecosystem of trustless and fact-checked information, but also incentivises its users to become part of it via staking rewards. This also ensures that there is no third party needed, essentially decentralizing the network, which is what cryptocurrencies should be about.
As per miners, also known as reporters, they have two clear incentives to not only participate in the network, but to also not act maliciously. The first is the “tip” attached to the query, which earns the miners the income. Second is the fact that the miners have to stake the tokens to participate, which means that if they act maliciously, they will lose the staked TRB tokens upon inaccurate information submission. Again, thanks to all of these mechanisms, the network ensures that it is trustless, decentralized, and secure while providing stable price feeds.
In its very essence, Tellor tries to solve the following problem. Imagine a smart contract that relies on off-chain data to evaluate or execute a function. The data may be compromised, since there is a single point of failure due to the centralization. Moreover, there is also a concern over the overall security of the process. If the smart contracts want to bring utility, the off-chain data, its security and trustworthiness, is absolutely necessary.
That is where Tellor comes in. Tellor creates a system where each party can request data and data reporters (previously known as miners) to compete to add value to an on-chain data bank. This is accessible on the Ethereum network and once it is done, the data is not only trustless, but also decentralized and secure.
History and team
The project was launched in 2019 in the United States by Brenda Loya, Nick Fett and Michael Zemrose. What is interesting is that several key team members previously worked together at a project called Daxia, which was related to blockchain technology. Brenda Loya, the current CEO and co-founder of Tellor, for instance, was VP and Lead Developer of Daxia.
Very similar story is connected to Nick Fett, co-founder and CTO of Tellor. Before launching Tellor, Fett was the founder of Daxia, while also having experience in economics, regulation and derivatives thanks to working for U.S. Commodities Futures Trading Commission.
The third co-founder of Tellor, who is currently its CSO, Michael Zemrose, was in charge of Business development at Daxia. Previously he was an entrepreneur working for several cryptocurrency projects, where he specialised in media and consulting.
Interestingly enough, Tellor was one of the first projects that has seen a similar merge that cryptocommunity is now witnessing with Ethereum, but obviously on a much bigger scale. At the end of the year 2020, Tellor updated to Tellor X, which also meant that it moved from Proof-of-Work consensus mechanism to Proof-of-Stake.
The move from PoW to PoS helped with the scalability of the project. The team behind Tellor also expects an increase in speed and efficiency, which can lead to robustness of data request types. Another feature of this switch is the ease with which the code can be implemented for different chains.
The switch from PoW to PoS also meant that the miners, which are currently known as the reporters, no longer mine blocks. Instead, under this new model, the model set an initial oracle contract to 24 000 new TRB, for a period of 2-years, with 1 000 TRB released on a monthly basis. After the two-year period, a new vote on the governance can be done.
The Tellor Tribute (TRB) ERC-20 token is used for data requesters in DeFi to pay for data requests. The data reporters compete with each other to provide accurate data to the oracles. After that they are rewarded with TRB tokens for their contribution to the network. Thus, the token serves as an incentive and a medium of exchange and payment token, but it can also be used to initiate and vote on disputes.
The update to Tellor X brought an introduction of flexible supply growth rates for mining networks. This means that each chain on which the project is deployed has its own unique inflationary reward system. In combination with Tellor Treasuries, which are essentially staking pools reducing the circulating supply and increasing the governance participation, the rewards are 10% annualised, released every three months (90 days) with the initial date of January 21st 2022.
The token started without a pre-mine or ICO and has no capped supply. Thus, the total supply of the TRB token is a function of the base reward paid to the data providers (reporters) for successful queries.
Several CertiK audits
Tellor is very serious about its security and the overall stability of the protocol and network, which is why it has undergone several audit checks by CertiK, a popular crypto auditing company. In more detail, this cryptocurrency project was able to pass all three audits by CertiK, namely audit of Tellor Core, audit of Tellor V2 as well as audit of TellorX.
In all the cases, the auditing company concluded that the protocol does not have any critical vulnerabilities or security issues. While some minor bugs and potential threats were found, CertiK included in all the cases that none of them were serious or dangerous to the project. Overall, the source code, smart contracts or functionality were without any critical bugs, leading Tellor to passing all three audits.
Tellor is one of the more complicated projects that tries to solve a complicated problem. However, at the current stage, it seems that Tellor is not doing bad at all. Its history as well as development seems to support this. While it can hardly be expected that a project such as this will have a huge community or following, once the use case is apparent, secure and usable, a lot more people will definitely look at the solution that Tellor proposes.
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