Proposal to add Tellor as additional oracle

Ampleforth Governance
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Greetings AMPL governance community,

This post summarizes ACCP-4, a proposal to add Tellor as an additional oracle to the Ampleforth system, and focuses on the reasoning behind it. Please refer to the actual proposal for more details.

Summary

The goal of this adding Tellor is to further decentralize the protocol and create a more robust, censorship-resistant price feed. Tellor is a decentralized oracle that uses a network of staked miners who compete to fetch off-chain data and place it on-chain.

Abstract

We propose that Ampleforth will use Tellor to bring on two values: the AMPL/USD value and the US Personal Consumption Expenditures (a key measure of inflation). The values will be medianized with the current price feeds provided by Chainlink and the Ampleforth team.

Motivation

In order for AMPL to do its daily “rebase,” it requires a price of AMPL/USD on-chain so that the protocol knows how to adjust the supply. It doesn’t peg directly to the dollar, but rather an inflation-adjusted dollar. Using the US Personal Consumption Expenditures Price Index, it can track the value of the US dollar versus costs. This means that AMPL will still hold a stable value versus goods and services, even if the US dollar collapses in value. There is no reliance on traditional banks or lenders of last resort to guarantee liquidity.

As an oracle that specializes in decentralization and censorship-resistance, we believe adding Tellor into the system greatly helps Ampleforth’s own efforts of decentralization and adds further security and robustness to the price feed.

Rationale

In order for the Ampleforth community to fulfill their vision as a decentralized financial primitive, the censorship resistance of the protocol must be the first and foremost priority. The communities of Tellor and Ampleforth have similar drives towards and beliefs as to what constitutes a decentralized protocol and the ability of the two projects to work together will help further the entire space.

Tellor’s system is a completely on-chain data feed that can be accessed by Ampleforth smart contracts. The design for integrating Tellor into Ampleforth includes creating an adaptor that pulls values from Tellor and pushes them to Ampleforth’s oracle medianizer, and configuring this adaptor as a new provider in the medianizer. Additionally, changes to Tellor are needed, which include an off-chain mechanism for both calculating the Ampleforth price and the CPI update as well as automated software for maintaining the liveliness of the oracle in a decentralized manner.

Tellor added the AMPL/USD price calculation in mid 2020 and has been updating it since and they have also created scripts for automating the price updates before they are needed by the AMPL system.

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Always a good idea to further decentralize the network with additional oracles

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I agree, but not just any additional oracle. I don’t believe this project is battle tested as an oracle.

This to me is a concern:

Of course people will bring up LINK’s XAG incident, but it’s quite pointless since LINK is universally used by many defi dapps with zero issues. I struggle to find who’s using TRB other than Liquidity Protocol as a secondary backup?

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There is no denying that the contract freezing was a major error in the history of Tellor. It was rough. There was cause for a lot of bad feelings, and yea…the chainlink community attacked Tellor online like sharks smelling blood in the water…But, lets not presume that the current tellor oracle is the same as the one that existed before the failure!

The Tellor team, the protocol, and the community has bounced back stronger than ever! Tellor 3 is live, TRB is now listed on Coinbase, and the Tellor team is expanding. The oracle is ready for use, and procedures are put in place to make sure that nothing like that ever happens again.

If anyone reading is in the mood for a long-form read on Tellor3 (the current deployment): Tellor3 Upgrade is Live!. This week we deployed a small but… | by Tellor Core | Tellor | May, 2021 | Medium

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Fair enough, but personally I believe Tellor’s current approach isn’t ideal in solving the oracle problem. Curious to see what others think.

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I think adding the Tellor Oracle would be a great addition. That said, I think adding Band Protocol would also be a great addition.

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Great to see Ampleforth is considering Tellor as a third oracle! Using multiple oracles is a great way to ensure that your protocol can handle a variety of adverse conditions, and the Tellor oracle is perfect for the job!

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Thanks for you thoughts.

Either way, it’s nice to have some real voting power for a token holder who believes in this project, thanks to the team for distribution of the voting tokens in the manner they did!

It’s nice to actually have a Vote!

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I want to see teller work to be honest, chainlink is not as decentralized as it should be considering how much faith the crypto ecosystem puts in it at the moment.

I’m just not convinced the risk reward ratio is there at the moment, considering we already have two oracles. I’m in the camp that I’d like to see the project be a bit more mature before introducing it.

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Hello kbambridge, thanks for the input! just a reply with some gratuitous Tellor info:
Did you know that the Tellor oracle has been live since mid 2019? The AMPL/USD 24H VWAP data point has been running on the main net for over a year. Check out https://www.tellorscan.com/
Have a great day!

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Hm okay you know what let me try running a node and see what I learn so I can have a more informed opinion on this matter. Will report back here.

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I would propose that if another oracle is necessary… (is it?) that the community look towards other oracles as well to consider (e.g., Band) and create a list of oracles and their pros and cons.