Tellor is a Decentralized Oracle that provides the most secure solution for those that need high value off-chain data in their smart contracts. It provides the infrastructure for decentralized applications to bring off-chain data on-chain by properly incentivizing random miners to provide data.
Why did we #buidl it?
Blockchain networks, or more specifically, the Ethereum network, allow for fast and secure transfers and creation of digital goods in addition to the storage and execution of tamper proof programs that can manage digital assets. These programs, once deployed on-chain, cannot be changed. They are available to everyone with access to the chain; they will execute based on the defined parameters; and, they are verified by the blockchain’s consensus mechanism. These characteristics allow anonymous parties to enter into binding digital agreements, or smart contracts. However, due to the nature of the blockchain, there is no way of reading off-chain data (e.g. internet APIs).
If a smart contract relies on off-chain data to evaluate or execute a function, parties currently rely on these options:
- Manually feed the data to the contract — the data can be easily compromised and is not a trustless mechanism.
- Trust a centralized party to provide the data — efficient but is a single point of failure.
- Rely on more difficult to implement solutions that pay less attention to security and focus on higher quantity data — this may not be a good option for some.
- Rely on a group of trusted known parties (Proof-of-Authority consensus) — not secure nor decentralized.
None of these strategies have proven to be optimal: decentralized, secure, and simple to implement.
Unfortunately, for smart contracts to bring true utility, off-chain data is necessary.
How did we do it?
Smart contracts on Ethereum are fully self contained and any information or access to off-chain data is restricted.
Tellor solves this problem by creating a system where parties can request data and 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 hybrid Proof-Of-Work(PoW)/Proof-Of-Stake(PoS) consensus mechanism and by choosing the median of the first five values received. The PoS layer requires the miners to stake Tellor’s tokens, Tributes, to be allowed to mine and their stake can be slashed if the value reported by the miner is challenged (for a fee) and voted as a “bad” value by Tribute holders. If the Tribute holders vote the value as valid then the challenger’s fee is given to the miner. The PoW layer is the same consensus protocol as Bitcoin and utilizes a similar incentives mechanism through the issuance of Tributes, that are used to request data from the miners.
For a more detailed description of how we accomplish this, please see: The Tellor Whitepaper.
What do we want to accomplish?
We are striving to accelerate the decentralized finance sector forward by providing a decentralized, secure and easy to implement oracle that aims to become the standard source of high value data for truly decentralized applications. So if you’re a project out there relying on a centralized oracle or have made some other compromise to get off chain data, reach out! We’re still in the process of finalizing our build and we’d love to have your input.
Visit our website at www.tellor.io, and come meet the team on our telegram and discord.
