Tellor ($TRB ) is a decentralized oracle network that allows regular users to earn rewards for participation. To accomplish this, the system provides an incentivization mechanism and a special cryptocurrency. Currently, Tellor is one of the leading oracle networks in the market.
Oracles are autonomous sensors capable of interacting with blockchain networks. These sensors play a vital role in the decentralized economy as they enable blockchains to interact seamlessly with other networks. The rise of #defi (decentralized finance) has further increased the demand for these services.
Today, oracles are used for a variety of purposes. #DEX (decentralized exchanges) rely on these sensors to maintain accurate token prices, as they typically do not have an order book. There are also oracles that allow tokens to be pegged to off-chain assets such as stocks and commodities. As the use cases for oracles expand, so does the significance of Tellor in the market.
What problems does Tellor (TRB) solve?
One of the main problems that Tellor aims to address is false reporting. The immutable nature of many blockchain networks means that incorrectly provided data can create a ripple effect. These issues arise because early oracles acted in a peculiar manner. This centralized point of failure weakened the overall efficiency of the network.
Tellor uses a decentralized structure to verify the accuracy of all data coming from oracles. The system employs a multi-layered verification and incentivization system to ensure that all oracles provide only verified, real-world information off-chain. Thus, Tellor provides a secure network of data reporters for the blockchain economy.
Advantages of Tellor (TRB)
There are many reasons why a user integrates oracles #Tellor into their platform. First, the network allows smart contracts on Ethereum to securely connect to verified external data sources. This provides Dapp developers with access to information in a faster and more efficient manner.
How Tellor (TRB) Works
Tellor is a network based on Ethereum. Therefore, users can interact with the platform using all wallets that comply with the ERC-20 standard. The network breaks down the transmission and retrieval of oracle data into several components. The protocol requires parties to pay a tribute fee (TRB) for submitting data requests from the network.
When a request is made, the network takes the most funded request and creates a Proof-of-Work task. This task is answered by network nodes known as reporters. The reporter who provides the information more quickly and accurately will be rewarded for their efforts. Reporters can gain status in the network by consistently and timely providing reliable and accurate information.
Consensus
Tellor uses a Proof-of-Work (PoW) algorithm to ensure that the blockchain remains valid. Interestingly, Tellor's consensus mechanism supports staking. To participate, miners must stake tokens. Specifically, you must stake 1000 TRB in the network's staking pool to be eligible for rewards. You must also participate in quarterly voting using Tellor Improvement Proposals. This strategy ensures that nodes remain interactive and relevant in the community.
Reporters
Miners in the Tellor network are called reporters. These nodes are tasked with tracking and transmitting data from oracles. Miners compete to add data points. For their efforts, they are rewarded in TRB. The system is more inclusive than Bitcoin, as high-end equipment is not required to become a reporter. You simply need to meet the staking requirements, hold TRB, and run the necessary software.
Dispute Resolution Mechanism
Tellor provides a dispute mechanism for automatically resolving data errors between oracles. The system charges reporters a small fee for resolving disputes. Of this amount, 10% automatically goes to tips for the same type of data that was deleted. The goal of this approach is to incentivize reporters to replenish this data as quickly as possible.
Tribute token (TRB)
Tribute is the primary utility token of the Tellor network. Users need TRB to participate in any platform services, including staking and voting. Miners are rewarded in the token, and it can also function as cryptocurrency when needed. As an ERC-20 token, TRB has high functional compatibility in the market.
Community Governance
Tellor represents a community governance mechanism that allows users to manage the platform's development. Users can propose suggestions that the community can vote for or against. If the proposal is approved, the system automatically unlocks funds from the public bank. These suggestions can cover anything from protocol changes to monetary policy, such as adjusting the circulating supply #TRB .
History
The founding team of Tellor, Nicholas Fett, Brenda Loya, and Michael Zemrose, learned valuable lessons from their first project, a derivatives exchange called Daxia. Notably, Brenda Loya is a well-known Ethereum developer. She also worked as an economist for the U.S. government.
The team understood very early on that the DeFi sector is becoming increasingly dependent on oracles as a vital component for data transmission. Platforms like Daxia require oracles to maintain an accurate pricing system. If an oracle provided incorrect information, it would significantly hinder trading opportunities. This situation prompted the team to continue developing Tellor as a response to this issue.
Tellor (TRB) – Oracles are essential for blockchain adoption
The Tellor development team stays ahead of the curve in terms of oracle integration. By providing the market with a simplified way to integrate these sensors, they empower developers to create more reliable and useful decentralized applications. Ultimately, these actions only enhance adoption levels.
1) Centralized Exchange (CEX) vs Decentralized Exchange (DEX): Complete Comparison
2) What is on-chain in cryptocurrency
3) 4 stages of a trader's decline!
4) What is Tellor (TRB)?
5) Altcoins and meme coins: what's the difference?
This article is for informational purposes only and is not investment advice. Thank you for subscriptions, likes, comments! 😉
