Tellor is a decentralized oracle built on Ethereum.
To break down what exactly that means, first you have to understand the problem we’re solving: blockchain networks are very siloed. They’re amazing systems that allow for trustless financial contracts, but if you need access to information not on Ethereum, like the price of BTC/USD, an interest rate, or even a sports score, you have to rely on a trusted third party to place that data on chain.
Tellor gets rid of those centralized parties by using a network of miners who compete to go and fetch the data for your smart contracts.
How does the Tellor Oracle work?
We created a protocol where Proof-of-Work miners compete to provide the data requested in the Tellor smart contract. Users (e.g. financial contracts on Ethereum) read from this on-chain database for use in their trustless applications.
This sounds simple, but to make this model work and have the proper crypto-economic incentives to secure this network, Tellor mints its own token — Tributes (TRB).
Tellor Tributes have a lot of uses in our system. First, users use TRB to request specific data they need and when a miner submits data on-chain they are paid in our token as a reward. Second, all miners are required to place a deposit of TRB in the Tellor smart contract before they can compete and begin mining. These incentivizes make it so that if a miner tries to submit a bad piece of data, we can dispute their value and then slash them for being malicious. And lastly, you guessed it, TRB is used both to initiate the dispute, and as weighting during the vote on the validity of the data.
If you’re into this kind of thing, you should definitely go read more about that here.
For a deeper dive into Tellor
Thanks for your interest in Tellor, and as always, if you have any questions or would like to become part of our community please hop into our telegram: https://t.me/tellor