Tellor is a decentralized oracle network particularly designed for Ethereum based applications. An oracle network is an off-chain sensor that enables blockchains to interact with external networks seamlessly.
Currently, the users need to check the live market data through cryptocurrency exchanges when they’re dealing with someone through an Ethereum-based smart contract.
It’s a time-consuming process and the risk of misreporting is also high. Tellor is dedicated to becoming a decentralized alternative provider for off-chain data allowing the users to access all the required data in one place. It eliminates the need for visiting a crypto exchange while providing reliable and valid market data to the users in real-time.
Brief History
Brenda Loya and Michael Zemrose co-founded Tellor in 2019 in the struggle of making an oracle for their previous project called Daxia. It was designed to solve the problems users were facing with the existing oracles. Brenda Loya, the CEO of Tellor is a blockchain expert and has plenty of experience in data science and scalability.
Michael Zemrose, the CSO of Tellor, has worked as a small business consultant. Thus, he has enough experience in business development.
Tellor has raised around $400,000 in 3 rounds for the development of the project. Binance Labs, Makers, and Consensys Grants are some of the popular names that have invested in this project.
What Makes Tellor Unique?
Tellor isn’t the only oracle network available. But the unique thing about this network is that it uses miners instead of nodes. Thus, it provides better decentralization compared to other oracle networks. Furthermore, Tellor supports its working model through other tools like Dispute Center, Tellorscan, etc.
However, in this network, a miner needs to wait for approximately 15 minutes after a win before they could cast the next vote. An important thing about Tellor is that it uses a hybrid protocol to run its operations.
It means it uses the Proof-of-Work mechanism to process data but the miners need to freeze 1000 TRB coins in a specified wallet if they want to participate in this process. Thus, it prevents malicious miners from feeding bad data points.
How Does Tellor (TRB) Work?
Blockchains are designed in a way that they provide an excellent level of security to the users because they operate independently. But this strength of the blockchain industry becomes a weakness when a user needs to pull live data from an external resource.
For example, Ethereum is a popular smart contract platform that enables users to create apps on its blockchain network. Now, if someone creates a Decentralized Finance (Defi) app on Ethereum, they don’t have any reliable option to show live data of Bitcoin or other cryptocurrency prices because these blockchains aren’t interconnected.
In this situation, some platforms use third-party tools to fetch live data. But it ultimately puts their platform at a risk. Tellor TRB is providing a reasonable solution to the problem. It operates as a bridge between blockchain and off-chain data.
How does the Oracle Work?
Tellor offers a combination of Proof-of-Work and Proof-of-Stake mechanisms. The miners stake 1000 TRB coins to become a part of the mining process.
Whenever a user needs off-chain data, he creates a data request using TRB tokens. Other users can also tip this query if they need the same data. Oracle network generates mathematical equations for these queries and assigns them to the miners to solve. These queries are prioritized based on the amount TRB tokens associated with each query.
The miners submit off-chain data points to the Oracle network after solving the equation. The network selects the median value once it has received five values from miners. That value is then added to the on-chain data that is accessible to the Tellor users. At the same time, the network distributes rewards among miners who have participated in submitting the data.
The best part is that the miners need to wait for approximately 15 minutes for the next challenge if they’ve won rewards for solving a query. It provides a fair chance for all miners to participate in the process.
Disputing the Validity of a Mined Value
Tellor provides authority to all users through its Dispute Center. Using this feature, any TRB holder can raise a dispute if they aren’t satisfied with the validity of a mined value. The token holder needs to pay a dispute fee to initiate the dispute.
The other token holders will then vote about the validity of that disputed mined value. The miner will lose the staked TRB tokens if the values are false. But if the data is correct, the dispute fee will be transferred to the miner. Thus, the entire Tellor community participates in making Tellor a secure network.
What are the Use Cases of TRB Tokens?
TRB is the native token of the Tellor network that is used for running different operations. It currently has a circulating supply of 2.3 million coins with a market cap of $40 million. It doesn’t have a maximum supply but inflation is controlled by burning half coins from each block as the supply grows. TRB tokens can be used for different purposes in the platform.
Payment – The users submit their TRB tokens to request the data they need.
Mining – Miners are required to send 1,000 TRB tokens to the Tellor network to participate in the mining process.
Rewards – TRB tokens are rewarded to the miners when they solve the equation. 10% of the mining reward is also transferred to the Tellor team.
Dispute Compensation – TRB tokens are also used to compensate the community members who raise disputes for suspicious submissions.
Conclusion
Tellor is a decentralized network that enables blockchain users to access off-chain data without any risks. It uses a hybrid consensus protocol to deliver real-time data to users at affordable rates. If you have any questions about how Tellor works or need more information about TRB tokens, feel free to get in touch with us.