AMA Highlights: Tellor

By Gabriel Tan, Analyst.
March 26, 2021–6 min read.

On Friday 26 March we welcomed Michael Zemrose and Ryan Hill from Tellor into the Hillrise Capital Telegram Chat for a conversation about oracles and their importance in the blockchain technology stack.

Tellor is a decentralised oracle solution for bringing off-chain data into Ethereum (and Eth-based layer-2 protocols). It follows a hybrid staking-PoW system for data validation and provisioning.

Among many achievements of late, V2 was recently implemented and increased speed by a multiple of 10. This year promises to bring Tellor V3 that will significantly advance the entire ecosystem and help push towards critical mass.

In this post, we have compiled key questions and answers from the event.

Ray Reijnders
Hi guys, happy to have you here today. We’ve seen Tellor around for a long time, and you’ve made a lot of strides with your decentralised oracle solution. I’m very curious to learn more about your progress so far and what you’re working towards for the future!

Could you please introduce yourself and Tellor?

Michael Zemrose
Hi Ray, and Hillrise Capital Community! We are glad to be here. I’m Mike, Chief Strategy Officer, and co-founder of Tellor.

As you mentioned, Tellor is a decentralized oracle. But we like to think of it as more than just a protocol; it's a combination of that, the network of data providers, a community of validators and voters, and only together do we get secure data on-chain.

This is Tellor’s secret sauce.

But in brief — Tellor is an oracle that uses a network of staked miners, who compete in PoW competition to bring off-chain values into Ethereum.

Ryan Hill
Thanks Ray! Glad to be here! I’m Ryan and I’m the biz dev associate. I actually just joined Tellor back in October.

Ray Reijnders
Thank you for the introductions, one of the things that we’ve noted about Tellor, is your very active and friendly community.

As you both know, communities are a critical part of any blockchain ecosystem. Tellor Improvement Proposals (TIPs) have been implemented for community involvement. So far, 9/10 proposed TIPs have been implemented.

However, overall contributions from the community appear to be in an early stage. Would you say that this sentiment is accurate? Would be interested to hear about any lessons learned and future plans on this.

Ryan Hill
Actually, all of our TIPs passed. Some of our TIPs are just to add data points to the oracle, the bigger ones are actually token governed upgrades and these are the ones we are most proud of. We’ve surpassed our quorum of 10% very comfortably each time.

Keep in mind that the team itself doesn’t even hold 10% of the token supply. So in order to pass these upgrades through it took real participation from the community.

But yes, we are definitely in an early stage. Our vision is to one day take a complete back seat while the community takes over. We have a lot of growing to do to get to that stage. There are projects that are farther along in this process that we can look to for inspiration and guidance. MakerDAO being the obvious one. They are investors of ours and will be helpful to us as we grow in that direction.

Ray Reijnders
Thank you for the clarification, that really shows the dedication in the community then. I can imagine a shared vision for a decentralized future being an important driver.

Ray Reijnders
To jump to one of your recent exciting developments, you’ve launched Tellor TOO for Matic. We’ve heard talks about how Tellor will be the only oracle solution able to scale with layer-2 solutions.

Could you dive deeper into this and share some of your insights with us?

Michael Zemrose
Well, I think we’ll all be scaling with layer-2. I think for us especially, layer-2 is very necessary. Transactions on Ethereum are way too costly for our PoW network to stay viable at these gas prices. Nobody could have predicted this. So this is why we’ve looked to solutions like Polygon (Matic). They are a great team and as far as layer-2s go, we think they make a ton of sense to build on.

Tellor Optimistic Oracle (Tellor TOO) is a structure we designed specifically for Matic. It’s basically a centralized oracle that uses the main Tellor on Ethereum for security.

This isn’t the only structure we are implementing on Polygon and other layer-2s. We have something coming out very soon called The Fellowship.

We think this will be a very viable and compelling solution for many users on any chain, while we wait for Eth to scale, and while we finish our development of the next iteration of mainchain Tellor (Tellor X).

Ray Reijnders
Do you see these layer-2 implementations leading to more integrations over time? I can imagine working with a layer-2 like Polygon (Matic) with a very extensive partner network being a big opportunity.

To tie into this, Ethereum-based, Polkadot-based, cross-chain, and BSC competitors have popped up all over. The trend is clearly multi-chain — at least for now until Eth2’s future is clearer.

How is Tellor approaching this development and how do you see this development impacting Oracles moving forward? Can you share your thoughts on a cross-chain Tellor?

Michael Zemrose
Yes, I do see it leading to more integrations. But just because you move to a layer-2 doesn’t mean integrations will come. It still has to make sense, and the demand has to be there. This is why we don’t rush to implement something on every single layer-2 out there. That and we have limited resources as a small team.

We definitely are keenly aware that we are moving into a multi-chain future. Its been a big part of our shifting strategy. The Fellowship is our first foray into addressing this reality with something we can get out the door, in the hands of users, and provide a viable service no matter which layer-2 that user is on.

Beyond that, we have a lot of plans for Tellor X, lots of designing and problems yet to solve. There’s a lot of cool things we could do in a cross-chain or multichain world. Right now, all our token inflation is on Ethereum, but in a multi-chain world does this make sense? Will Tellor’s validation layer move off Ethereum? Perhaps we could split up our inflation across layer-2s and layer-1s, depending on how we set up our system, and who’s doing the work to secure or provide data, and where demand is.

Interesting stuff to tinker around with, and I’m just glad there are people way smarter than me on the team to figure it out.

Daniel Dal Bello
Hey guys, thanks for being here… so to build on all of this, and compared to other Oracle platforms, it seems like you don’t actively try to market yourselves as aggressively.

Is this just not a point of focus and what is the marketing strategy moving forward?

Ryan Hill
Our marketing strategy is both pragmatic and philosophical. We were (and still are) a modestly sized/funded team. Our strengths are development so that’s where we had to focus. Especially coming out of the post-ICO era, we had to rise above the junk out there and show we were a credible and very tangible product that shipped code. Quite a rarity back then. HA!

That said, our philosophy around marketing has always been to focus on education, and sharing tangible news. We didn’t want to get pulled into the hype-based marketing games, that were more about pumpamentals than reality.

Yes, we don’t have a steady stream of faux-partnerships, but we do have a steady stream of development and are consistently building relationships with developers in the space. This is our target audience so we strategize towards them. The rest will follow suit naturally.

Hillrise Capital is an independent research and advisory firm exclusively focused on blockchain startups and crypto-assets.

Tellor is a decentralised oracle network that cryptographically secures the settlement of real-world data on-chain.

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We’re an independent research and advisory firm focused on blockchain startups and crypto-assets.

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