Thanks a lot for actively participating in the Tellor AMA held on 23rd September 2019 at the Game of Bitcoins Channel. We really appreciate all your support. This post is a recap of the entire session held with Tellor
Q1. We'll start with the name. What does the name Tellor signify
Tellor is a combination of the word Tell + Oracle = Tellor. And also the idea that an oracle brings offchain information onchain. Or you could say it tells us the offchain info 😛
Q2. What makes you stand above the competition
Our competitors are aiming to allow any smart contract to query almost any piece of off-chain data. We’ve narrowed our aim at allowing for our smart contract to query price data every ten minutes. It’s a subtle difference, but it allows us to make some stronger assumptions about security and will hopefully allow us to launch and be truly decentralized a bit faster than them. To summarize, we focus more on putting higher value pieces on chain with more measurable security qualities. How we plan to do it is by utilizing proof-of-work and staked miners to get off-chain information onto Ethereum.We have a decentralized product on mainnet, now.
Q3. Do you plan to work with Ethereum only
Definitely. The whole point of an oracle though is to provide data to smart contracts that need it. If we see other platforms gaining support and users, then we'll put in the effort to head over to other chains, but Ethereum is really dominating at the moment in terms of projects building on top of them
Q4. How do you plan to attract developers on using Tellor
It's really a tough question because we know there are so many platforms, but I think integrity is really the answer here. Ethereum and Bitcoin are great examples of a project that has managed to get a phenomenal group of developers working on them and in our mind its because they really stay true to what decentralization is actually about. Projects that compromise on the integrity of what your building (in order to make UX better or faster transactions) can never compete because even paying new developers can't compete with the process of attracting developers because they believe in your cause and ability to deliver
Q5. While Tellor can choose other protocols for fairer distribution of rewards, why Tellor chose POW is the security protocol?
So we played around with designs, but PoW is a nice source of randomness that’s still difficult to reproduce. Also the other(main) piece for us is that PoW validators are usually different people than stakers; meaning they tend to be much more neutral third parties rather than the whales of your currency that could throw a PoS system. Since we already use a pure democratic system for the dispute mechanism, having identical parties handle the data input would have been less secure in our opinion.
a:What sparked the idea of creating Tellor?
b:What is the revenue model of Tellor?
c:Can you explain how does the hybrid PoW/PoS work?
d:What are the chances that a 51% attack on Tellor could happen and how do you plan on dealing with the attack?
a: What sparked the idea of creating Tellor? We originally set out to build Tellor because our previous startup, Daxia (a derivatives protocol on Ethereum) needed an oracle. Daxia created tokens that would represent the short or long side of crypto pricing pairs, BTC/USD for example. We relied on a centralized oracle to provide the price data points to settle the contracts. We knew this didn’t fit with our ambitions to be a fully decentralized protocol and so we set out to find a decentralized oracle that would fit our needs. That solution didn’t exist. So we set out to build it ourselves.
b: 10% dev-share. A dev-share is a structure in which a portion of the block rewards goes to the treasury of the founding team in order to finance the team’s efforts. In Tellor’s case the dev-share is 10%, meaning that 10% of all mining rewards will not go to miners but to the Tellor team instead. This is not only a long-term structure to support the project, but also aligns incentives between miners and the Tellor team, like maintaining a decent token price for profitable mining and a secure network. A dev-share allows us to get the necessary financing we need to create a sustained and secure oracle network, but only if we really deliver a great product that’s needed. Unlike an ICO where we could raise millions and never launch or deliver on our promises, our belief in the success of the project strengthens our confidence to choose the harder route. A dev-share is not only a commitment to our project, but also to our community!
c & d: it is actually proof of work and staking. But it works like this: : Tellors utilizes staked miners, so we make you deposit 1000 Tellor Tributes (our token) in order to do PoW mining. For each block, we take 5 miners and with the PoW submission, the miners also enter the requested data (e.g. the price of BTC). The median of the first 5 is the official value and any of them can be disputed where you can lose your 1000 tokens if Tellor token holders vote that you were malicious.
It quickly becomes very expensive to spam or “break” Tellor for any extended period of time.
A 51% attack would have to be successful in getting at least 3 out of the first five data submissions and once disputed being able to vote majority.
Q7. Whether a project succeeds or not depends on the investors. So can you name some investors for Tellor? And the reason why the team chose to cooperate with those investors?
We agree and theres more to an investment than just money. Thats why we wanted to partner with projects that believed in us long term and were well respected in the space. Our investors are Maker and Binance Labs. I think both speak for themselves in terms of what they've been able to achieve in the space. Binance Labs was a chance for us to go through a great incubation program, build out Tellor along side the support of many great developers. I will also add that it's important for a company to have a good business model, establish recurring revenue, so they can self sustain with out solely relying on outside investment. We are committed to striking that balance!
Q8. What is the goal of Tellor project? What makes Tellor an interesting option for developers over other blockchains?
The goal is actually pretty simple, provide data for decentralized contracts that don't compromise. We were trying to build an oracle for our own derivatives protocol, and based upon the interest we had in the oracle, we decided just to focus on that. We wanted to build something that could be measurably secure now and not some open research project that is still several years away from being usable.
And for developers, we're hoping for developers more so to build whatever they want and then to use Tellor to connect their data. As the smart contract space grows, interoperability between platforms, contracts and outside data is going to become crucial, so we just want to be a part of it. But if you do actually want to build Tellor itself, we have a great group of people looking at the code and we're not afraid to push things to production. Its a much different feel from a lot of other projects where you build just to push the hype train forward
Q9. My question for Tellor: Are you also going to support Tron blockchain / EOS blockchain / Binance blockchain besides current Ethereum one? If yes, which one will possibly be the next candidate any why?
I'd probably say Cosmos tbh (we worked with them out in Berlin), but we're also working on porting derivative tokens from Ethereum (settling to Tellor) to Binance chain for trading. Binance chain is still centralized at the moment though, so how fast we move to them is more dependent on them following through with opening up the system
Q10. I have researched through your founding team, but haven't found any image about the third Founder, Michael Zemrose? Can you guys tell us a little bit about him? And how 3 of you work together to build Tellor?
Hi Mary, I'm Michael. Sorry you could'nt find more info on me! Here is a link to all of our linkedin pages: https://tellor.io/faq/#founders In brief, I bring a range of non-dev experience to our team. I've been an entrepreneur for 14 years and have consulted many business owners over the years as well as know what it takes to bootstrap my own businesses. My areas of focus with Tellor, are business development, branding and messaging, community engagement, and filling in whatever other gaps I can! Thanks for asking!
Q11. I am looking for Tellor Roadmap but cannot find anywhere? Is it still censored info or can you reveal more about Tellor plan in the future?
Thanks for the question. We're not too big into those 5 year roadmaps with crazy hype built into them. The space changes so much, so staying flexible and telling people what we can actually deliver on soon is more important. For the next 6 months to a year though, we plan to a) get integrated into projects (votes over this timeframe for allowing oracles into Maker and Compounds system) , b) create robust price feeds that become the standard prices on Ethereum, and c) upgrade to allow non-numeric data (e.g. bytes32 so we can port over blockheaders from other chains and other information)
From one of the answers from @the_fett : "For the next 6 months to a year though, we plan to a) get integrated into projects (votes over this timeframe for allowing oracles into Maker and Compounds system) , b) create robust price feeds that become the standard prices on Ethereum, and c) upgrade to allow non-numeric data (e.g. bytes32 so we can port over blockheaders from other chains and other information)"
Q12. a. What about Security? How one is secure on Your TELLOR Platform ?
b. What were the major difficulties that you faced while starting this project ? And what was your motivation to continue ?
c. What kind of measures will be implemented to secure the chain with sharding and its security liabilities?
So for security, it's all about incentives. We make data reporters stake before mining and then we have a robust governance system in place to handle disputes. More info can be found here if you want a thorough description: https://medium.com/@tellor/tellor-security-and-rewards-1e365e1be8ae
b. gas prices have been difficult as of mainnet launch, and then just dealing with the normal difficulties of keeping your focus straight while all the hype filled IEO's are going on and knowing that's not the path to an actual company/protocol.
c. that's definitely still an area of open research (I think for both us and Ethereum). Its going to be interesting to see whether we would want to have different oracle contracts on different shards or not, but we're definitely keeping up with it the best we can and working to help scale Ethereum ourselves too
Q13. I read your white paper and it is very technical, could you tell us what all this means for the final consumer?
It means that users that are interested in trustless execution of contracts that depend on external(to Ethereum) data can now truly be trustless. Most current Decentralized Finance application do not run/settle contracts on oracles that are trustless and decentralized. A decentralized oracle makes decentralized finance applications truly decentralized.
The final consumer will be a user of another DeFi project that uses the Tellor Oracle. So we hope that all the technical aspects will be in the background and in the end the final consumer will just enjoy the fact that they know they are using a protocol that is fully decentralized.
Q14. As of now there have been many blockchain related projects come and gone, what are the special and unique characteristics of TELLOR that make it different from the others, that make investors and users decide to invest into it? What is the foundation of ideas in building this project?
I really think its important that our idea for Tellor came out of necessity first and foremost. We had a problem that needed solving, we needed a decentralized oracle. "Necessity is the mother of invention." So we set out to create a solution that could work NOW with tried and true methods like decentralization through competition. We kept our idea simple, but effective. We didn't want to spend years in theory and research. And we've shown why this is a good thing: We built tellor and launched in 6months. We have decentralized offchain data available to be used NOW. In addition to this we had a committment to have an honest, values-based, company that was sustainable long term. Thats why we didn't do a pre-mine, or ICO. We chose a modest dev-share business model.
Q15. Why BinanceLab invested in Tellor? How it helped you? Usually we see BinanceLab project comes on BINANCE through IEO, can we say it's coming up ? 😉(I know there is NDA).
We really enjoyed the experience, they provided great mentors, we were at Full Node in Berlin with pretty big projects in the space and were able to pick their brains and really enjoyed the exposure we got in SF as well. I don't know for certain but I think they invested in Tellor because they realize the need for an oracle and they believed our team could deliver, and we did. To mainnet!
Q16. Currently tellor is based on ERC20 , Is there any future plan to make their own mainnet?
Not any that is actually launchable soon. We built our whole PoW mechanism on top of Ethereum because the whole point of an oracle is to get off-chain data onChain. If you start your own blockchain, then you still have the problem of how Ethereum smart contracts can read data from your blockchain. If you're an oracle for Ethereum, you really need to be built on Ethereum at the moment
Q17. For staking, How much minimum tokens are required to hold for staking?
Each miner is required to stake 1000 tokens to be able to participate to compete to be one of the first five to provide the POW solution and data requested and they can lose their stake if they are successfully disputed/provide a bad value.
Q18. Guys, can you say few words about your team. Where are you located? How many team members and devs? Previous experience?
Sure! I sort of put the team together a few years ago. I was working at the CFTC (US regulator for crypto and derivatives) and left to start a derivatives protocol when I called up my former supervisor (Brenda), who built statistical software with me for the US employment surveys, to be my cofounder. Since I was CEO for the derivatives startup, she was up for Tellor, and then we met @Banjoski at a local bitcoin meetup. He's a former video producer who did design/marketing so we knew we needed that skill set to round us out. We also have a part time dev in Mike Coon, whose a former 20 year NSA developer and really brings that level of experience to our builds. And we're located right outside of DC
Q19. Why Decentralized ? Many projects works on centralized basis and work very well, so, what actual need of decentralization in Tellor? @JustBrenda @the_fett
For us, decentralization is very important. The value we see in decentralization is being able to build truly unstoppable applications. If you want something centralized, databases are way more efficient and cheaper to run than an Ethereum based smart contract. They can also be shutdown easier and can projects that are not decentralized or moving towards decentralization.
Q20. What is "The Oracle Problem?"
In brief- Smart contracts on Ethereum can't access information from the regular internet (offchain). They need someone to put it on chain and those services are called Oracles. This is a problem in a decentralized protocol because its a key point of centralization. We've decentralized this process of bringing offchain data onto Ethereum.
Since smart contracts on Ethereum are fully self-contained and any information or access to off-chain data is restricted, certain types of smart contracts are reliant on an outside provider (an oracle) of off-chain data points. The problem is that you now have a decentralized smart contract with a centralized key point of failure. The issue with this is obvious to anyone who values decentralization.
Q21. Could you give us an overview of your tokenomics? Is the token designed to rise and fall with the success of the platform, and does it include any scarcity paths such as stake, store, or burn?
It is. More people who want data = more use for the token. We also require miners to stake in order to mine and pay for disputes on our system. It's a long answer, but I'll just pass on some articles we wrote if you're really interested: https://medium.com/@tellor/staking-disputes-and-voting-ad09c66eb7bc
Q22. Chainlink is already working similar to Tellor ? Than how Tellor is different from Chainlink? And as Chainlink is already working it so how you will compete with them ?
Chainlink does not have a decentralized product on mainnet. We have a decentralized product on mainnet, now. We took a very pragmatic approach to the oracle problem. We are similar to Chainlink in that we are trying to tackle the same problem and we both agree that data is a necessity for defi to continue to expand. We admire their ambitious goals for decentralization but instantaneous queries of all types of data is still ways away and we hope they get there. We developed Tellor using technology that we already know works for decentralization. Staking and proof of work.
Q23. What is the use cases of token Tellor Tributes?
Tributes are a utility token. They are to be used by miners to stake, they are used to reward miners, by users to request data, and token holders can vote on disputes of data validity.
Q24. The main problem with PoW consensus mechanisms is 51% attacks, what measures does Tellor have against this issue? Where does Tellor core profit come from? How will your team make Tellor become a win-win solution for both investors and platform?
Definitely. We have miners stake, which can help, but then after that all the values can be disputed. 51% attacks are easy even Bitcoin (sub 1 million USD to break for an hour), but its that non-determinism that really gives it security. What this means is that breaking BTC for an hour does nothing because the network will always revert to truth. In our system, its the same thing. You can break us for an hour, but you'll get disputed, lost 1000 tokens each time, and unless you own 51% of our token supply, all your doing is delaying finality (not necessarily getting a malicious on the system)
And our profit comes from a 10% dev share (each 10 minute block has 25 tributes go to 5 miners and then 2.5 tokens to us)
Q25. Traders' needs may increase faster in the next few years. So does Tellor have a plan to meet this need?
There's a concept called the blockchain trilemma - basically you have Speed (scalability), Security, and Decentralization. If you want speed you sacrifice security and decentralization. We think decentralization and security are more important to solve NOW and speed will come. So it's up to the traders as to what they value most? That is until scalability is solved in a meaningful way and we pride oursleves and look forward to adapting as the space grows.
Q26. Price of TELLOR token is highly correlated to Dataset supply? What will happen if Dataset supply comes to zero. Will this kind of situation ever happen?
I think you're confused about how it works. The datasets are placed there by miners. If you're used to a Band Token or Zap model, where individuals create specific datasets and charge for them, we don't do that. We have someone request data and then we go get it. So whether we're utilized for 1 dataset (say ETH/USD) or hundreds, the token economics can still make sense
Q27. Why did you build Tellor?
I love answering this one. I got into crytpo after I was already in the community currency space for a while, so I'm completely sold on the idea of competing currencies with purposes that serve the interest of the actual community and not large corporations or banks is going to change the world. Decentralized financial products are a big piece missing to realizing this future and the big problem we ran into was finding a usable and launched decentralized oracle...so we built one
Q28.Is there any plans to Launching the Mainnet of Tellor Project ?
We have been on Mainnet since the beginning of August and there are now over 80 miners providing data to mainnet. Our network of miners continues to grow every day.