Tellor solves this problem by creating a system where parties can request the value of an off-chain data point (e.g. ETH/USD) miners compete to add this value to an on-chain data bank, accessible by all Ethereum smart contracts. Inputs to a data series are secured by a network of staked miners. The main Tellor smart contract creates a time series of each requested data series and aims to become the standard source of high value data for decentralized applications.
This oracle, “Tellor”, utilizes similar incentive mechanisms to other cryptocurrency systems through the issuance of Tellor’s token, Tributes, that are used to request a particular data series from miners.
One of the biggest problems limiting decentralized finance growth is the lack of a secure and decentralized price feed. Tellor aims to enable the growth of the DeFi industry by providing a secure source of for high quality pricing data.
The Tellor Oracle provides an efficient, trustless and decentralized alternative for off-chain data. It provides the infrastructure for decentralized applications to query off-chain data by properly incentivizing miners to provide data.
The Tellor Oracle utilizes a delegate proxy structure for its contracts, deploying two smart contracts: 1)TellorMaster.sol allows delegate calls from Tellor.sol to allow for data storage. TellorMaster holds the historically mined values that contracts can read from. 2)Tellor.sol holds and distributes the token supply, informs miners which values to submit, and has a built-in methodology for challenges.
It provides the miners with necessary fields for data collection, allows miners to submit the proof and off-chain data, sorts the values, and allows users to retrieve the values and bid on which data series is mined next. The contract targets for new values to be mined every 10 minutes via difficulty adjustments. Which data series is mined is determined by which series has the greatest “tip” going to the miners.
Two types of incentives are implemented in this hybrid model, 1) rewards for PoW submissions and 2) structural incentives to promote accurate value submissions.
Miners are given two types of rewards:
A base reward per every successful submission
Tips given to miners to incentivize the selection of a query
Similar to the way Ethereum rewards ‘Uncles’, or miners who were close to winning, the first five miners to submit a PoW and off-chain value are awarded the five Tributes each.
Tellor took into consideration two main problems when structuring payouts for our reward mechanisms:
Incentives to submit proper value
Every miner is required to stake 1000 tokens
Miners have to stake 1000 Tributes to be able to mine. Proof-of-stake allows for economic penalties to miners submitting incorrect values.
Every accepted value can be challenged and put to vote by any Tellor Tribute token holder
Blockchains are secured via multiple avenues. The first is in the random selection process provided by PoW. The second is that even if the first security measure fails, the blockchain can create forks and different chains until the honest miners win out. Since our oracle system does not have the ability to fork easily, Tellor implements a finality period of one day after original data submissions by allowing parties to challenge data submissions.
Smart contracts on Ethereum have no direct access to off-chain information
This has created a reliance on third-party providers of off-chain data points. Tellor system gets rid of those centralized points of failure by using a network of miners to fetch data for your smart contracts.
Mining and Security
Miners are given the following information from the Tellor oracle contract
API Query String
Tips associated with request
Security is achieved through the Tellor Oracle’s architecture (mining algorithm and selection process for median value) and incentives implemented for miners to promptly submit the correct values (see the “Incentives” section for further details). Ultimate security however is provided by the Proof-of-Stake dispute resolution. Since any value that is disputed will be put to a vote by all token holders, the simple cost to break is: Token Holder Voting Share * Price of Tributes
Tellor main competitors are centralized oracle services that can charge low fees for API data retrieval. Tellor is a premium oracle service which provides 144 API queries per day to the applications needing a secure oracle.
The system has several supply and demand constraints affecting the price:
The security of the system is highly correlated with the price of the token and any monopoly or erosion of confidence in the system will decrease this security and hence the price.
As the token price increases, less tokens are needed for each query to the miners (assuming demand in USD is stable). This will free supply and decrease the price of the token to an equilibrium level.
As the price of the token rises, this creates increased security in the Oracle system by further incentivizing miners through the base reward.
The Tellor Oracle implements a ten percent developers share (dev share). This revenue stream will be managed by the Tellor team and utilized in the following ways:
Ensure community participation and accurate voting for disputes
Create and distribute efficient mining software
Market and Promote the Tellor Oracle to ensure adoption which leads to greater mining incentives
Create developer tools for utilizing the Tellor Oracle in production deployments
Fund research and improvements to the oracle
Tellor will use the initial tokens to provide liquidity to users of the oracle. There is no pre-mine or token offering. Tokens will be sold on an as needed basis by Tellor to provide liquidity to the users and miners of the system. If you want to partner with us to utilize the oracle in your smart contracts, please contact us for details.
Features of Tellor
Quick and easy to implement into your smart contracts
For developers who want a trustless solution and to not rely on third-party oracle solutions
Tellor use a Staked Proof of Work protocol to validate our data
This article is writing on 3 May 2020 based on information available online & news portal. If you feel it’s outdated or incorrect, please write here to update it. Mail us: email@example.com Or Whatsapp Us- +13098896258
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