About

Tellor is a decentralized oracle protocol that supplies data to smart contracts. It operates on a permissionless network, allowing broad participation in data reporting and validation. The protocol supports various data types, including market data, facilitated by reporters using the Telliot client.

History

The team behind Tellor started at Daxia, a derivatives protocol on Ethereum. Daxia created tokens that represented long or short sides of a trading pair and required an oracle in order to execute these smart contracts.

Smart contracts on Ethereum are fully self-contained and any access to off-chain data is restricted, which means to obtain access to information outside of the Ethereum network, it would be required to rely on a trusted third party to place that data on chain.

If a smart contract relies on off-chain data to evaluate or execute a function, without using a decentralized oracle such as Tellor, the data may be compromised or is not trustless, as trusting a centralized party is a single point of failure, and may cause lapse in security or decentralization. For smart contracts to bring true utility, off-chain data is necessary.

Tellor solves this problem by creating a system where parties can request data and data reporters compete to add this value to an on-chain data bank, accessible by all Ethereum smart contracts.

Tellor Tributes (TRB), the native token, is used to incentivize participants on the network. Reporters (data providers) compete to provide accurate data to the oracle and are rewarded with TRB for their contributions. There was no ICO nor pre-mine, and all tokens are created by miners actively participating in the network. There is no fixed supply of TRB, and the total supply increases as a function of the base reward paid to data providers for successful queries.

The team recently audited and launched TellorX, the most recent upgrade that addresses key pain points of Tellor's scalability limitations by moving from Proof-of-Work to Proof-of-Stake for increased speed and efficiency, adding byte data for robustness of data request types, and flexible code for multi-chain implementations.

DeFi today uses oracle structures that are mainly centralized at the moment. As the community educates itself on the importance of oracles and the relation to the security of funds, DeFi will start moving towards truly decentralized and secure oracle solutions such as Tellor.