At the current stage, many DeFi projects have admin keys, which is why some DeFi projects are not completely decentralized and there are centralization risks. Tellor recently completed the transition from centralized to decentralized governance. It is foreseeable that more and more DeFi projects will achieve similar transitions in the future.
Destruction of TRB’s administrator key
If the project team has an admin key, it means that the holder of the admin key can upgrade the contract and make changes to the system. In the early stage of the project, the administrator’s secret key can understand that the early projects may be risky, need to be iterated, and need to run stably, but in the end, a gradual transition to the community is needed to reduce the risk of centralization and achieve long-term sustainability run.
(Destruction of Tellor’s admin key, Source: tellor)
At present, the Tellor project party has destroyed its admin key, and upgrading the Tellor protocol needs to be done through governance. The governance method is through the Tellor Improvement Proposal (TIP) process for resolution and implementation.
What is TRB
Tellor is an oracle project, and TRB is its token. V2 was completed before Tellor implemented V2.5. For Tellor, please refer to the previous article “” by Blue Fox Notes.
(Tellor’s main operating mechanism, Source: tellor)
V2 version of TRB
The V2 version has been upgraded in terms of scalability and security. The main improvements of V2 are as follows:
*Scalability
-Increase the number of data points per block to 5
-Double the speed (difficulty target reduced from 10 minutes to 5 minutes)
*safety
-Limit the reward for each miner (1 every 15 minutes)
-No time limit in disputes
-Multi-round dispute mechanism
-Change dispute cost calculation
-Allows to obtain the current mining ID to increase tip incentives when congested
*other
-General code improvements
-Automatically select the next challenge
-Delete request data on the chain
-Destruction of token fees
(Main improvement of Tellor V2, Source: tellor)
Among the improvements of V2, one of them allows TRB tokens to capture the value of the protocol, and it will burn 50% of the miners’ tips . This means that as Tellor’s business grows, the burned TRB will also grow. This makes Tellor’s business scale directly related to the value of TRB.
After Tellor destroys its admin key, all upgrades must go through the TIP proposal process. The V2.5 upgrade is the first practice of Tellor’s decentralized governance.
The V2.5 version is the first practice of Tellor decentralized governance
The V2.5v version of Tellor was implemented through the TIP-2 proposal process and is currently on the mainnet. In this TIP-2 proposal, 55 independent addresses participated in the vote, and TRB, which accounted for 18% of the total, voted in favor, which greatly exceeds the legally approved number of votes required for the total 10% of TRB tokens in Tellor governance . From this perspective, the current participation enthusiasm of the Tellor community is good. This is a good start for the Tellor project that has just turned to decentralized community governance.
1. TIP implementation process
Specifically, what are the processes required to implement Tellor’s TIP proposal?
First of all, Tellor’s TIP proposal is decentralized governance, and upgrades need to be proposed and voted by the TRB community. There are three main categories of TIP proposals:
*On-chain related
-Scalability: Improve throughput
-Safety: Any solution to improve safety
-General: any general code improvement, such as reducing gas cost, etc.
*Off-chain related
-New data: new
-Miners: Miners-related improvement proposals
-General: Proposals other than the above can include various proposals and even the optimization of the TIP process itself
*conventional
All proposals outside the above range.
Second, the TIP proposal implementation process includes the stages of drafting, review, voting, and implementation.
Before making a pull request in the repository’s GitHub, a thorough discussion of the proposal ideas is required. After full discussion, it can be formally submitted and a pull request can be initiated. The proposal will go through the following stages:
*draft
The community can view the complete written proposal, comment and give feedback. If the proposal includes changes to the Tellor code base, miner code base, or a complete fork, the first draft of the code should also be submitted at the same time.
Proposals that include changes to the code base need to go through the development, review, and audit (if necessary) processes, perform local testing with 100% coverage, then deploy, and verify on Etherscan, and on the testnet before final review carry out testing.
*Final review
The community can view the final proposal and the final code base deployed and verified on the mainnet (if necessary).
*Voting period
The community has a 7-day on-chain voting period.
*Implement/Reject
After the voting period, updates and voting on the chain are automatically executed or rejected. Proposals to improve the miner code base or other off-chain will also be implemented accordingly.
2.V2.5 opens the way for TRB’s decentralized governance
Since the admin key has been destroyed, the current development power is in the hands of the community. TIP-2, the first community governance proposal, adopted and implemented Tellor V2.5.
The core of the V2.5 proposal includes:
*First, the miner’s pledge is reduced from 1000TRB to 500TRB. According to the current price, it is approximately reduced from more than 20,000 USD to more than 10,000 USD
*The current miner reward has changed from “1TRB+tips/2” to “1TRB+tips/2+timeSinceLastMineValue/5Min”. The tips/2 here is because half of the tips will be destroyed, which has been implemented in the V2 of Tellor above.
The TIP-2 proposal (V2.5 version) reduces miners’ pledge tokens by half, with the purpose of incentivizing more miners to join the network and achieve more decentralization. The bigger change is the change in the reward mechanism. The previous reward mechanism was a fixed token reward for each block, 1 TRB reward for 1 block, and 5 minutes as the difficulty goal. This mechanism may be no problem for some liquid mining projects, but for Tellor, it is an oracle. If the gas cost is higher than the reward (1TRB + tip) during congestion, then no miner is willing to submit data at this time. This means that Tellor cannot operate normally. Of course, at this time, the miners can be motivated by tipping more, but this requires manual operation, and the network is already congested, which will further aggravate the congestion.
(Tellor’s mining event, Source: tellor)
The reward mechanism of the V2.5 version adopts a more flexible method, which is based on the duration of Tellor since the last block. Assuming that the block is produced in 5 minutes under normal circumstances, the reward is 1TRB. If the block is mined in 10 minutes, the reward will become 2TRB, and the reward calculation method becomes: 1TRB+tips/2+timeSinceLastMineValue/5Min, In this way, the normal operation of the miners can be encouraged and the operation of the Tellor oracle can be maintained.
(The miner reward composition of Tellor V2.5, Source: tellor)
Judging from the implementation of Tellor V2.5’s decentralized governance, the transition from centralized to decentralized governance has basically been achieved. Whether it can continue well, and we can continue to keep an eye on it.
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Risk warning: All articles of Blue Fox Note cannot be used as investment advice or recommendation. Investment is risky. Investment should consider personal risk tolerance. It is recommended to conduct in-depth investigation of the project and make your own investment decisions carefully.
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