Tellor

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Tellor Tribute
Denominations
Plural	Tellor Tributes
Development
Original author(s)	Nicholas Fett, Brenda Loya and Michael Zemrose
White paper	docs.tellor.io/tellor/whitepaper/introduction
Initial release	20 November 2019 (2019-11-20)
Code repository	github.com/tellor-io
Development status	Active
Website	tellor.io
Ledger
Timestamping scheme	Proof-of-work
Hash function	sha256(ripemd160(keccak256(challenge, msg.sender, nonce))) % difficulty = 0
Circulating supply	1,956,479.19 (as of 23 September 2021)
Supply limit	None

Search Tellor on Amazon.

Tellor is a project created on the Ethereum network that serves as an oracle to provide real world data on an on-chain data bank. The data provided can then be used by any Ethereum smart contract. The parties included in the process are data providers, validators and token holders. Tellor has a native token called Tribute(TRB), which serves the purpose of securing(by rewarding good actors and punishing the bad ones) and decentralizing the network. The token is used as means of security when it's staked by the miners and can be taken away if someone is proven to provide false data, but it's also used for incentivizing the miners to provide a certain data type sooner, by giving a "tip". As stated on their website, the project was originally started as a tool for Daxia(open source software for derivatives contracts on Ethereum), but it wasn't integrated and continued to exist as a standalone project.

Design

Flow

The end goal of the flow is to provide correct off-chain information. Every five minutes, the five most funded data types are chosen to be updated. If a TRB holder wants a specific data type to be updated faster, he can issue a "tip"(in TRB). More information on the tipping process can be found in the "Data types and tipping process" section of this page. By doing so, the specific data type is pushed higher on the priority list, and if it's in the top five it get's updated in the following iteration of the process.

The main actors that participate in the flow are the miners(data providers) and the data validators. The data providers get a Proof-of-work challenge to solve by the Tellor smart contract, after the fore-mentioned contract groups the top five most funded data types. Besides solving the challenge, the miners also have to provide an off-chain data point for the required data types. The five fastest miners get rewarded with newly minted TRB tokens, plus the tip that the data types received during the choosing process. This data update cycle is called a block.

Because we can't be sure if the data provided by the miners can be trusted, miners have to provide a stake(500 TRB) to participate in the process, which can be lost if the TRB holders dispute the data provided by the miner. More about this can be read in the "Security" section of this page.

Data types and tipping process

The information about the requested data sources is kept off-chain, but they are referenced in the on-chain data bank with a numeric ID. Some examples of currently supported data: ETH/USD, BTC/USD, BNB/USD, ETH/BTC, TRB/USD etc. Any of the active data types on Tellor can be updated if a request comes into the system. The requests are queued in order of how much tip is associated with it. Any TRB holder can issue a tip and at the start of each block the contract selects the five most tipped data requests. After the block is completed, half of the tip is burned(removed from circulation) and the other half gets split evenly between the five miners that provided the data.

Security

Tellor provides security in multiple layers. To understand it better, first we would have to look at the way a value for a data type is chosen. As mentioned above, the first five miners to solve the proof of work challenge get to provide a value for the five requested data types. After that, for each data type the median value of the five provided is taken into account. The median value is used instead of the average to prevent a bad actor from effecting the correct value by providing a value that's very different from the average. Besides the proof of work process that we see in a lot of cryptocurrencies, Tellor has a dispute mechanism which demotivates miners to provide bad data, as they can get punished for it.

The dispute process can be initialized after a miner has provided an update for a specific data type. If there is a TRB holder that deems the data to be wrong after it has been put on-chain, he can challenge the value by submitting a dispute fee. Not only does this begin the dispute process, but it also puts the potentially malicious miner on the side so he can't participate in the data providing process for the duration of the dispute. Initially, the duration of the vote is 2 days, where all TRB holders have benefit in keeping an honest data provider and like-wise removing a dishonest one. This means that the interpretation of what a "correct" value is, is left to the voters, which means that the answer can be subjective. The result of the dispute can also be disputed in the following day, but the dispute fee is doubled for the second challenge. Likewise, the voting period is also doubled. This process can go on indefinitely, but keeping in mind that the dispute fee is getting higher each vote, it can become an extremely expensive practice for a malicious actor. Depending on the result of the dispute, the fees can either go to the reported miner, or to the disputing party.

The formulas for the dispute fee and voting periods are the following:

$disputeFee=initialDisputeFee*disputeRound$

$votingPeriod=2days*disputeRound$

The initial dispute fee varies based on the type of value that is to be disputed(median or non-median) and the number of miners in the system. The formula for the cost of disputing a non-median value is:

$max(15,stakeAmount*(1-stakedMiners/200))$

While disputing a median value costs:

$stakeAmount*numberOfDisputesOnId$

Taking all of these security layers in consideration, providing a false value on-chain becomes extremely unlikely. First of all, a malicious party would have to win the proof of work challenge at least 3 out of 5 times in a single block(the mining process can be costly as well) to be able to provide a median value for the data type. Even then, the values can simply be disputed rendering all malicious efforts pointless and expensive.

A miner can request a withdrawal of his stake at any given time, but his tokens will be locked for 7 days because of any potential disputes over the provided values. After that, the tokens are unlocked.

Tellor upgrades

As any other smart contract that is deployed on the Ethereum network, Tellor contract cannot be changed directly. Changes can only be achieved by deploying a new Tellor contract and starting a vote to change the proxy address to the address of the proposed contract. The vote lasts a week and the result can be disputed the following day. If the vote goes through, the Tellor contract is changed.

TellorX

After two years of it's existence on the Ethereum network, a major upgrade for Tellor is planned, called TellorX. Although the idea is still the same, where miners need to provide data on-chain for rewards, there are some changes in the way it works in multiple parts of the flow. As of 2 September 2021, the code of TellorX has been sent for an external audit.

Data Submission

Firstly, TellorX removes the proof of work component and miners won't need to solve any challenges. Hence, miners will be referred to as reporters now. Besides that, reporters can now submit data for any id instead of the chosen top five. Another difference in TellorX is the fact that it no longer requires five values for a request(where the official value is the median of the five) and only one reporter is needed now. To become a reporter, 100 TRB have to be staked in TellorX, which is a lot less than the 500 required in Tellor. A reporter can submit a value every 12 hours, in order to give a chance to the other reporters and also allow time for a dispute. In comparation to Tellor, in TellorX reporters can choose to submit any id they want, but they will still most likely choose the one with the highest tip.

Unlike Tellor, in TellorX the data get's submitted as bytes, meaning it supports any data type or multiple number of variables. For example, besides the typical data types that Tellor supports(ETH/BTC, BTC/USD...), in TellorX you can even provide an array of prices(ex. [ETH price, BTC price, TRB price]). You can also submit more specific data, for example, average hours of sunshine in London as measured by some website. Every new data type(request ID) needs to be approved by a vote from the governance contract in order to be added to the system.

Dispute functionality update

The dispute mechanism functions almost the same as in Tellor, with few small differences.

Considering the fact that in TellorX a median value isn't needed when we define the value of a specific data type, there is only one dispute fee formula.

$max(10,stakeAmount*(1-reporters/200))$

Besides the difference in the dispute fee formula, disputes in TellorX can be settled in three ways: true, false and invalid. If a value is deemed to be invalid, the value is removed from the chain, but the reporter is not punished in any way. As with the other dispute results, the decision of what is considered an invalid value for a data type is left to the community.

Governance

Participants in the Tellor network can be a part of it's governance. Besides the fore-mentioned disputes, Tellor upgrades and additions of new data types, the governance functionality can also be used for new policies and features. In versions before TellorX, each vote was worth as the amount of TRB tokens held by the voter at the time of dispute or update proposition.

In TellorX, three groups of network participants are identified and their votes are weighted by different parameters. The three groups are: reporters, TRB holders and users(tip issuers). Although in general every participant wants the system to grow, their point of views on specific proposals can be different, so weighting their votes differently can provide some balance.

Tresuries

TellorX features staking pools where TRB holders can stake lock their tokens for rewards. Treasuries have multiple purposes. They can be used to manipulate the circulating supply of TRB which would indirectly affect the price of TRB. There will be quarterly votes in order to decide if the treasury supply should increase, decrease or maintain the same number of TRB tokens. The interest rate for the staked tokens can also be decided on these votes.

Beside the treasury purpose of manipulating the circulating supply, this feature also aims to increase the voting activity of the token holders. TRB holders that have tokens locked in a treasury have to vote on governance proposals in order to not lose any percentage of their gained interest upon withdrawal from the pool.

Market availability

As of 3 October 2021, Tellor's native token Tributes(TRB), can be acquired on multiple exchanges, such as:

1. Crypto.com
2. Binance
3. VCC Exchange
4. Coinbase
5. Gate.io

References

This article "Tellor" is from Wikipedia. The list of its authors can be seen in its historical and/or the page Edithistory:Tellor. Articles copied from Draft Namespace on Wikipedia could be seen on the Draft Namespace of Wikipedia and not main one.

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