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Perhaps what is interesting about the modern world is its rate of tech evolution and innovation. From light bulbs, cars, washing machines, telephones, and roughly 30 years ago, the groundwork was laid for the Internet.
The world has never been the same again. It was dubbed web 2, the publishing age, since anyone, anywhere could create content and “push” it to the other side of the world. The world became a village.
Fast forward and the 2010s brought us the blockchain. Seven years later, the concept of dapps took root. Dapps were ordinary applications whose back end ran on a distributed, smart-contract ledger. Ethereum is still the favorite.
With Ethereum, there is just more than what meets the eye. Yes, there is smart contracting and its middleman, eliminating automation which also fostered innovation. This innovation seeped into the restive financial industry and now we have decentralized finance, or DeFi.
DeFi: It is just the beginning.
DeFi is open finance where owners of ETH—or native currency of a smart contract’s platform say Cosmos (ATOM), for instance, can borrow or lend their holdings for a stable coin. DeFi has revolutionized traditional finance. And Ethereum is the base for this welcomed innovation.
But DeFi is not specific, it is all-encompassing, and they involve exchanges and lending apps. At the time of writing this, there were over $900 million worth of ETH locked up in DeFi applications.
The most popular is MakerDAO, where borrowers received DAI, a stable coin with ETH as collateral. Lenders in the meantime can earn above rate interest rates.
But DeFi can’t function without oracles, or portals that convey useful, reliable—and always vetted real-world, off-chain information, that can trigger smart contracts which also run DeFi apps.
Thing is, Ethereum and similar platforms require trusted oracle for valuations, settlements, and dispute resolution. And DeFi and developers need to resolve the “oracle problem” before there are other advances.
This is vital because should secure oracles that provide stable data feeds are compromised then DeFi as we know will collapse.
Otherwise, the closed-looped, self-contained nature of ordinary smart contracts won’t allow the full utilization of certain DeFi apps that may require external data for activation.
What is Tellor?
Providing a solution to this is Tellor. It is an Ethereum-based decentralized and secure oracle for DeFi dapps. Tellor is an easy, implementable solution through which DeFi dapps can receive high value data for smart contracts.
Their data feeds are stable and reliable because they make use of staked miners who compete through Proof-of-Work to submit official value for requested DeFi data.
TRBs are mined with each successful data point but a portion of it, 10%, is taken by the company for ecosystem development. This developer share goes to the treasury of the founding team to finance the team’s effort.
Tellor says this is necessary to “maintain a decent token price for profitable mining and a secure network” consequently aligning incentives between miners and Tellor’s founding team.
Tellor: Decentralized Oracle and a Hybrid Consensus Algorithm
Tellor is a project that was built from a need. Its creators had earlier created a startup, Daxia, a derivatives protocol on Ethereum, which required an oracle.
Daxia would create tokens that represented long, or short sides of a trading pair. To function, an oracle was required for smart contracts to be executed.
For their needs to be met, the team built Tellor, a decentralized oracle that fully met their needs.
Aware that DeFi has the potential of being a multi-billion industry, Tellor has built a network of staked miners where through Proof-of-Work, they can reliably channel secure and stable pricing data for the burgeoning industry.
The Tellor Oracle is an on-chain data bank where miners compete to add data points in return for rewards called “Tributes” or TRB. For miners, they earn a base amount of 5 TRB for every submission and tips as incentivisation.
Interested parties then pay Tributes to submit a request for data to their decentralized Oracle. The oracle then settles on a best funded query and creates a Proof-of-Work challenge for the miner to solve. Each query collects pricing data and makes it on-chain.
As another cushion of security, miners are required to stake their Tributes. To take part, a miner must stake 1,000 TRB. This is to dis-incentivize those who may want to game the system.
The combination of Proof-of-work, a gold standard in consensus, and staking gives the decentralized oracle an edge over competitors. Besides, there is quality since queries are made every 10 minutes.
Tributes is key to Tellor, and their work is to:
- Provide security by incentivizing miners and required for dispute resolution—charged as fees. They are also needed for staking.
- For the building of a striving and robust Tellor ecosystem and community. This is only achieved by ensuring continuous distribution of the token.
- Ensure a sustainable system.
Brenda Boya is the CEO and co-founder. She is an Ethereum developer and a former economist in the US Government. Before that, she was the lead developer and VP of Daxia.
Nicholas Fett is the CTO. He’s actively designing and developing a system for off-chain data access and validation on Ethereum. Before that he was the founder and CEO of Daxia.
Michael Zemrose is the co-founder. He describes himself as an expert in developing, communicating, executing, and sustaining strategic initiatives. Before that he was the Chief Strategy Officer at Daxia.
Binance Labs, ConsenSys, and MakerDAO are investors and major partners.
Last year, they also partnered with Radar Relay, a P2P trading platform.
Tokenomics and Distribution
TRB, as aforementioned, is an Ethereum-based utility token that powers the Tellor system. Notably, they didn’t carry out an ICO. Instead, they opted for a developer share. 10% of miner rewards is diverted to the founders’ treasury.
“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 cutting-edge product that’s needed. If we don’t, then the token value will plummet and there won’t be any interest in Tellor, be it miners or actual projects using the oracle.”
“So instead of the project dying while already having raised millions in dollars, we would be left without anything in hand and a failed project. This commitment and proper incentive are what we are after.”
At the time of press, the token is trading at $6.61 with a 24-hour trading volume of $226,265 according to streams from CoinGecko, a coin tracker.
At this level, the token is up 17% in 24 hours and 130% month-to-date. It is down 22% from its all-time high of $8.73 and 35X from its all-time lows of $0.18 registered on Nov 10, 2019.
There will be 1.05 million TRB tokens in total and 960k are already in circulation. The token’s market cap stands at $6,437,774 and is therefore ranked at 270.
TRB is actively traded on IDEX, where the TRB/ETH is the most popular trading pair drawing daily trading volumes of $74,994. Other supporting exchanges include Vitex, Citex, and Bilaxy.
Furthermore, TRB is available at Bidesk.
Short term Catalysts
- Tellor is a project created out of necessity. The team understands what they are trying to solve and their solution resonates well for DeFi dapp creators. As a reflection of their goals, the token soared 33X from its all-time lows of $0.18.
- The team tight-knit and experienced. Tellor executives were part of Daxia, a derivatives protocol based on Ethereum.
- Tellor has received investments from DeFi industry leader MakerDAO and Binance Labs.
- There are rumors that Binance DEX could list the token. Binance DEX is massive and is powered by Binance’s technology. Should they list, the token’s liquidity will increase and that is a net positive.
- The idea of giving up and opting for a developer share instead of an ICO reveals their true intention and urge to see the project blossom.
- The amount of ETH locked up in DeFi platforms continue to rise. It recently surged past $1 billion mark. Supportive fundamentals from DappRadar further reveals that more people who interacted with blockchain experimented with Ethereum and specifically DeFi. This is huge and for a platform that serves DeFi dapps, it’s only a matter of time before they receive more investments from Fortune 500 companies and the likes.
- Their emphasis of security and decentralization is attractive for purists, and over the long term and if DeFi blossoms, this will be a major talk point more so if there is exploitation of other oracle solutions. The security of the network is directly proportional to TRB market rates. The higher, the more secure the platform. Additionally, Tellor’s smart contract has been audited by CertiK.
- TRB total supply is relatively low and fixed. There is no pre-mine. Tellor’s popularity will only mean more demand for TRB, and market forces will mean a repricing beyond the token’s all-time high.
- Tellor can work on any chain with smart contracting capability. This means gathering cross-chain information is possible.
- Development team is working on “creating a secure, scalable, and on-demand Oracle to help smart contracts achieve their true potential.” Research on Zero-knowledge submissions to reduce gas costs and to prevent mirroring, and automatic reporting and monitoring is already been done.
Catch Major Price Moves with MarketWizard App