Categories
DeFi Ethereum Oracle

What the UMA token is used for

What is UMA?


UMA is a protocol for creating synthetic assets. With derivates it allows any user, entity, institution or DAO to access any type of financial risk.

UMA token is used for


How UMA works


UMA smart contracts consists of

  • Public addresses of both parties
  • A margin account for both partys.
  • Calculation of economic terms for the agreement
  • Choice of oracle
  • Add, withdraw, margin balance, remargin, terminate, settle

The smart contract becomes the counterparty of the derivates agreement. Without custoding or owning the underlying asset.

  • A smart contract would allow anyone to easily short for example a basket of altcoins.
  • The taker enters into a derivative contract with any maker willing to take the other side.

UMA Oracle


The oracle uses a Schelling Game with a token. Tokenholders vote and get rewarded for voting with the majority and penalized for not doing so. Similar to Kleros.

  • Someone request an off-chain data point.
  • The request is batched with other requests into a voting period.
  • Token holders commit a hash to the data they believe is valid during the period.
  • At the end of the period votes are revealed.
  • Token balances are snapshotted.
  • If > 50% vote for the same data point. That data point is returned to the requester. The voters for that data point get rewarded and the others get penalized.
  • If < 50 vote for the same data point. A median of the votes are returned. voters between 25th and 75th percentile are rewarded.

To protect the Oracle from Sybil attacks UMA uses an AMM that will buy back the token and burn it to not go below a certain price. Making it economically non-viable to attack it.

More on this in the white paper.

UMA whitepaper summary


  • Different use cases for synthetic assets and tokenization of risk.
  • How the protocol and smart contracts work.
  • Potential problems like oracles and margin security.
  • Another whitepaper will be published on an oracle solution
  • Future work: A blockchain agnostic approach.

Full white paper.

Full Oracle Whitepaper.

Token issuance


Total: 100 688 646

  • Uniswap – 2M
  • Developers and users – 35M (Distribution specs not finalized and will be subject to governance)
  • Future token sales – 14,5M
  • Founders, Early contribs, Investors – 48,5M

Founders, early contributors, and investor tokens are transfer-restricted until 2021, and all individual token grants are subject to a 4-year vesting schedule.

More here.

Docs


Docs

What’s the story?


  • DeFi Hype
  • Oracle
  • Oracle and synthetic assets in one

Competition


UMA price


Categories
Ethereum Oracle

What is TRB token used for?

TRB token is


TRB is the utility token for the Tellor oracle network.

TRB token is used for


  • Fees to miners.
  • Security deposits for miners.
  • Deposits for disputes.

How does the TRB token work?


Query off-chain data (p.4):

  1. User submits a query using TRB.
  2. Anyone can ‘tip’ to further incentivize selection of that data point by miners.
  3. Every 10 minutes, the Oracle selects the best funded query and provides a new challenge for miners to solve.
  4. Miners submit their PoW solution and off-chain data point. As soon as five values are received, the median of the five is selected.
  5. The miners are then allocated their payout.
  6. Anyone can dispute a data point by depositing a dispute fee. 

Refresh data

Dispute data

Why would value accrue to TRB token?


Potentially Staking/locking

  • Security deposits for miners
  • Deposits for disputes.
  • Transactions on Tellor require TRB.

Potentially negative

  • Inflation (3600 TRB / day)

What is Tellor?


Tellor is an oracle solution for off-chain data.

How Tellor works


Tellor uses a hybrid POW/POS-model:

  • The Oracle uses proof-of-work (like 0xBitcoin) where miners are also required to provide an off-chain data point.
  • Similar to POS; miners are also required to stake 1000 TRB before they are allowed to mine and risk losing their stake if their submitted values are successfully challenged.
  • The first five miners to provide the PoW solution and offchain data point are each rewarded with 5 TRB + tips.

More on the mining algorithm (p.8).

Security


Race conditions

  • Occur when a user can see a pending transaction on Ethereum and then submit their own transaction with a higher gas price to front run this transaction.

Mirroring

  • Is when parties copy the previous submission’s value.

How to Tellor attempts to mitigate these

  • All miners will receive equal rewards. If Tellor solely takes the first submitted value, the cost of attack for POW would decrease.
  • Race conditions will still occur but with less severity than when the median value is paid a higher reward. In addition, since they anticipate mirroring to be a problem and the only way to prevent it is to actually submit fake values on occasion.
  • To keep the system honest Tellor plan to police the environment by utilizing their devshare to submit malicious values if a sufficient number are not present. (p.6)

More on Tellor security.

Whitepaper / Docs


Price feeds and disputes


Similar projects


Token issuance


Current supply

  • The Tellor Oracle implements a 10% developers share.
  • Tellor will use the initial tokens to provide liquidity to users of the oracle. There is no pre-mine or token offering. Tokens will be sold on an as needed basis by Tellor to provide liquidity to the users and miners of the system.

TRB inflation

  • Tellor is a premium oracle service which provides 144 API queries per day to the applications needing a secure oracle.
  • (5TRB * 5)144 = 3600 TRB / day

TRB price


Categories
Ethereum Oracle

How is the LINK token used in Chainlink?

Link token is


The utility token for Chainlink oracle network.

LINK token is used for


  • Pay node operators for data feeds.
  • Bid on off-chain data queries.

How does the LINK token work?


  • Smart contracts need to pay their chosen ChainLink Node Operator using LINK tokens.
  • Prices are set by the node operator based on demand and supply for the off-chain resource.

Read more in whitepaper (p.21).

What is Chainlink?


Chainlink is a decentralized oracle technology that allows off-chain data to be connected to any chain.

How Chainlink works


To provide reliable oracles Chainlink uses (p.16):

  • a Validation System
  • a Reputation System
  • a Certification Service
  • a Contract-Upgrade Service to provide security.

For node operators

  • To increase decentralization ChainLink proposes aggregation of off-chain data.
  • To mitigate risks Sybil attacks and mirroring (p.19), ChainLink proposes trusted hardware and off-chain audits among others things long-term.

Off-Chain Queries (p.5-6)

  • An oracle services purchaser specifies requirements such as query parameters, the number of oracles, the reputation and aggregating contracts needed.
  • When an oracle service provider bids on a contract, they commit to it by attaching the penalty amount that would be lost due to their misbehavior, Bids are accepted for the entirety of the bidding window.
  • Once the SLA has received enough qualified bids and the bidding window has ended, the requested number of oracles is selected from the pool of bids. Penalty payments that were offered during the bidding process are returned to oracles who were not selected.

Whitepaper / Docs


Explanation video


Competition


Total Supply


Total supply: 1 000 000 000

LINK token price