Why was Tellor Built?
Building a truly decentralized project is impossible without a decentralized source of off-chain data. Data that can be requested, validated and broadcasted on-chain transparently with the appropriate incentives.
Many DeFi projects attempt to solve this problem by choosing centralized data feeds and APIs, or publicly available exchange data that attempts to supplement on-chain data. Or worse, some manually input data with a fallback to the team, creating room for error, outages or a market crash.
Should a new project introduce risk of data corruption for the sake of convenience and control? Blockchain projects shouldn’t - and can’t - leave data security up to a centralized source, or private proprietary APIs that could be subject to manipulation. Today, users demand trustless data from the ground up.
Introducing Tellor, the first unstoppable oracle for finding and validating off-chain data. So users can build unstoppable protocols from the ground up.
The Tellor Oracle Protocol
Tellor proposes a solution to the oracle problem using a permissionless community consensus mechanism for determining what is a “correct” value. The system incentivizes Tellor data providers to compete for Tellor Tribute Tokens [TRB] that can be earned by successfully recording oracle data on the Ethereum blockchain. With the current implementation of the protocol (Tellor 3), data providers are required to solve a proof of work challenge. We refer to these individuals as “staked miners”, because they must lock up a 500 TRB bond as collateral against “bad” or malicious data.
The Tipping Mechanism
The tellor tribute [TRB] is also used to “tip” or “pay tribute” to the oracles (miners) at any time to quickly refresh the database. This gives users a trustless mechanism for getting data updated more quickly when the ethereum network is busy.
The Dispute Mechanism
Tellor uses an innovative dispute mechanism to protect users against malicious miners. Any TRB holder/user may dispute any value if they believe that the submitted value is not correct or malicious. The disputer must pay a dispute fee that is bonded for 48 hours while TRB holders vote on the dispute. If the dispute is supported, the disputer takes the miner’s 500 TRB stake. If the dispute is challenged by the community, the miner receives the dispute fee.
Funding
Tellor had no ICO. Full time development is funded by a 10% Dev Share of mining rewards
Tellor Tributes (TRB) are the native token of the Tellor. They are used to incentivize miners to provide data through base rewards and tips via user requests. They are used for governing valid data through disputes, and for system upgrades proposed and voted on by token holders.
Tip Burns
In the Tellor system, 50% of tips go to miners (⅕ to each selected miner) and 50% of the tips are burned each block.
Supply
The total supply of Tellor is determined by usage and mining rates. For the maximum supply, Tellor’s supply will grow at the rate of the base reward * 288 queries per day. The graph below shows the Tellor supply and the growth rate assuming full utilization:
Dev-share
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 Tellor to ensure adoption which leads to greater mining incentives
- Create developer tools for utilizing Tellor in production deployments
- Fund research and improvements to our system
Governance
In addition to providing a means of voting on the validity of data submissions, the Tellor token is used to vote on upgrades to the Tellor contracts.
