Can Tellor (TRB) make money from Open-Sourced Security?
Tellor (TRB) is trying to make money from open-sourced security. To explain, Tellor is trying to decentralize blockchain security through an oracles.
An oracle is a data feed that puts data from off-blockchain sources on the blockchain. Blockchains, like Ethereum (ETH), need oracles because smart contracts cannot access off-chain information. Yet many smart contracts need off-chain data to do their jobs
To elaborate, a smart contract is a digital robot that performs tasks on and off the blockchain. For example, the smart contract in a stablecoin, such as Tether (USDT), makes payments in fiat currency from an off chain contract. Hence, Tether’s smart contract needs bank information to make payments in US dollars. Without an oracle, Tether becomes worthless because its only value is the ability make US dollar payments.
Thus, some smart contracts need to transmit data to off-chain apps. For example, Tether needs to communicate with a bank’s platforms to make US dollar payments. Moreover, Tether’s smart contract needs to know how many dollars are available and what accounts they are in.
What is Tellor (TRB)?
Tellor (TRB) is a synergetic oracle platform that operates on the Ethereum blockchain. Synergetic means people cooperate for a common purpose.
They claim people all over the world to operate Tellor through on-chain functions and smart contracts. Theoretically, this allows users to monitor data and provide security.
Smart contracts face many security threats. For example, crooks try to hack Tether in order to steal US dollars. Similarly, fraudsters try to fool contracts with false data. For instance, a fraudster could fool a smart contract with a fake ID.
Tellor uses OpenZepplin Defender to detect security threats. OpenZepplin Defender is a security operations (SecOps) platform built for Ethereum.
OpenZepplin Defender allows people they call sentinels to monitor data for suspicious activity. If sentinel sees suspicious activity she reports it through a Discord message. They try to identify sentinel messages as authentic through JavaScript snippets they call autotasks. OpenZepplin tries to distinguish between malicious data (attacks) and bad data. For example, the difference between a fraudulent ID and an incomplete ID.
Tellor claims they can build for autotasks for specific purposes. For example, they have an autotask for identifying a fake price feed. Another autotask can can check suspicious values. They integrate OpenZepplin Defender with Discord to make communication easy.
How Tellor (TRB) works
Tellor is an oracle system where “reporters” answer questions about security threats.
To encourage people to report threats. Tellor mints the Tributes (TRB) native token. The system pays threat reporters “TRB tips” for valid information.
They try to keep reporters honest by having them buy TRB and post it as a bond. To explain, a bonded worker, such as a security guard, posts an amount of money. If the worker violates the job’s work. He or she loses the bond.
People post $1,500 worth of TRB as a bond when they become a reporter. A Tellor reporter who violates the platform’s rules will lose the TRB he or she stakes as a bond. For example, a reporter who lies about her ID will lose the $1,500 TRB. The hope is that requiring a bond will discourage crooks from using Tellor for crime.
All bonded Tellor reports receive 2% of the available TRB as Tips. Tellor also pays reporters time-based inflationary rewards. These rewards start at zero and grow by 0.5 TRB every five minutes.
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Uses For Tellor (TRB)
I think there are uses for Tellor (TRB) in the financial services industry. For example, Know-Your-Customer (KYC) and Anti-Money-Laundering (ALM).
Know-Your-Customer and Know-Your-Client (KYC) require banks and brokerages to verify all customers’ identities. Hence, a stablecoin that pays in US dollars from a bank account will need comply with KYC. Tellor could support KYC compliance by checking and verifying customers’ identities.
OpenZepplin Defender could investigate suspicious and incomplete identities. Theoretically, OpenZepplin could also investigate all transactions to verify the user.
Tellor (TRB) for KYC and AML Compliance
Anti-Money-Laundering (AML) laws such as the US Bank Secrecy Act require financial institutions to report any suspicious activity. For example, payments made by a person using a fake ID. Or money with no obvious source.
Authorities can shut down organizations that violate AML laws and even charge those entities’ executives with racketeering and other crimes. AML’s puprose is to keep crooks from using the banking system to move money. The term money laundering means to wash dirty money to hide its true origins. Targets of AML include terrorists, organized crime, and fraudsters.
Any decentralized finance (DeFi) protocol will need to comply with AML and KYC laws to operate in the financial system. For example, a stablecoin needs AML and KYC compliance to make payments from bank accounts.
There is no evidence, Tellor (TRB) is performing such compliance for any organization. However, a bank, investment bank, blockchain, blockchain company, payments provider, FinTech company, or technology company could buy Tellor to provide such compliance.
What Value does Tellor (TRB) offer?
There is interest in Tellor (TRB). It was CoinMarketCap’s ninth most trending cryptocurrency on 28 August 2023.
Mr. Market thinks Tellor offers some value. CoinMarketCap gave TRB a $14.80 Coin Price, a $25.086million Market Capitalization, a $35.956 million Fully Diluted Market Cap, and a $23.975 million 24-Hour Market Volume on 30 August 2023. They base those numbers on a 1.703 million TRB Circulating Supply, and a 2.442 million TRB Total Supply.
There is a market for Tellor’s service, verification. However, there is no evidence anybody is paying for that service. My advice avoid Tellor until they can show somebody is paying for its synergetic oracle services.