eIP 56: Add the Tellor oracle

[eIP] Euler Improvement Proposals Formal submission
1

Title: [RFC] Add the Tellor Oracle
Author(s): Michael Zemrose & Ryan Hill
Related Discussions: eip 48, eip 18
Submission Date: 02/03/2023

Simple Summary

This proposal calls for the addition of Tellor as an oracle pricing type to the Euler protocol. It is submitted by Michael Zemrose & Ryan Hill, who are part of the Business Development team at Tellor.

Abstract

Currently, Euler leverages the ability to choose the oracle for each individual market between Uniswap or Chainlink. Adding Tellor would enhance the options in the following manner:

  • Censorship-resistance
  • Manipulation resistance
  • Flexibility of adding new feeds

Motivation

The design of certain oracle solutions can be limiting for the Euler protocol. Whether it’s relying on a multi-sig, being tied directly to limited onchain liquidity, or being at risk of attacks by the chain’s validators; getting oracles right is a hard task full of trade-offs. Tellor adds a dynamic layer for Euler’s users in multiple ways that open up more possibilities and solve different problems the current options fall short on. Namely: flexibility and liquidity manipulation.

  • Flexibility - Currently, Euler users are tied to limited optionality when it comes to their pricing type. This is because if Chainlink does not already provide a price-feed, they are forced to reside with the default Uniswap option, whose risk has been thoroughly discussed in the eip 18. Adding the Tellor oracle enables users of these smaller markets another option, as Tellor is permissionless. This means anyone can incentivize Tellor’s decentralized network of reporters to provide pricing data for any price pairings they like. This maps well to Euler’s motto of allowing users to lend and borrow almost any crypto asset.

  • Liquidity Manipulation - What allows the Tellor protool to be both decentralized and censorship-resistant is its crypto-economic incentives. Becoming a data reporter and using the oracle are both completely unbound from requiring any permission from the core team itself. This is because reporters have to stake a bond that can be slashed through its dispute mechanism. The dispute mechanism is a core tenet as it means that none of the data that gets reported by the oracle is automated, rather it is scrutinized by a network of selfish, anonymous actors.

Tellor has been a prominent secondary solution to Chainlink in the space, most notably Liquity and Ampleforth, so if the Euler community has been comfortable with the addition of Chainlink, they should feel assured they are in good company. With respect to Euler’s appreciation for permissionless fundamentals, adding Tellor to the mix addresses this specifically.

In adding the Tellor oracle pricing type as an option for Euler markets, the Euler community will have more optionality when it comes to oracles for newer markets (and new chains) open to it that align with its own principles of permissionless access to lending markets.

Specification & implementation

If passed, the respective contracts should be updated to reflect the new Tellor pricingType, similar to the code changes reflected in eip14.

This oracle alternative was made possible by the recently passed eIP 14 and the implementation is similar to that called for in eIP 16 1 1.

Conclusion

These changes will add a third oracle option for all markets on Euler, providing users access to an extra dynamic of pricing data that is flexible, permissionless, and censorship-resistant. We are eager to receive any and all feedback as we ultimately only want to see this proposal move forward if it adds significant value for the Euler community.

Helpful Links:

  • Yes, in favor of the proposal
  • No, against the proposal
  • Modify the proposal

0 voters

7 Likes
2

Hi @RaynHarr ! Thanks for the proposal. Not being an expert at the Oracle stuff sorry for some noob comments in advance)
Chainlink is considered to be the most secure one, however, as u rightly pointed out, the list of supported pairs is quite limited. In this regard, I wonder how many more assets Tellor supports than Chainlink? I mean how usable will it be from the quantitative point of view?

Another question is about chains. I did not find BSC in the list provided in the docs, so are u going to support it in the near future? Given the way the voting on eIP Deploy Euler to BNB Chain goes on, Binance chain is highly likely to be the one Euler will be developed on next

2 Likes
3

Hey @Raslambek , no apology necessary as these are great questions!

re: which assets we support
Tellor can be used to get any price feed (or any other verifiable data) onchain. It’s a permissionless oracle, so it wouldn’t have to go through us to get set up. (we would be happy to help, of course.)

New pairs can be added to our reporting client easily so that reporters can be ready to submit the data automatically when the new pair is tipped.

re: Binance Smart Chain
We’re actively working on this. On their testnet at the moment, but still working on a viable token bridge option in order to deploy on mainnet.

4 Likes
4

Title: eIP 56: Add the Tellor Oracle
Author(s): Michael Zemrose & Ryan Hill
Related Discussions: **
eip 48 , eip 18**
Submission Date: 03/08/2023

Simple Summary

This proposal calls for the addition of Tellor as an oracle pricing type to the Euler protocol. It is submitted by Michael Zemrose & Ryan Hill, who are part of the Business Development team at Tellor.

Abstract

Currently, Euler leverages the ability to choose the oracle for each individual market between Uniswap or Chainlink. Adding Tellor would enhance the options in the following manner:

  • Censorship-resistance
  • Manipulation resistance
  • Flexibility of adding new feeds

Motivation

The design of certain oracle solutions can be limiting for the Euler protocol. Whether it’s relying on a multi-sig, being tied directly to limited onchain liquidity, or being at risk of attacks by the chain’s validators; getting oracles right is a hard task full of trade-offs. Tellor adds a dynamic layer for Euler’s users in multiple ways that open up more possibilities and solve different problems the current oracle options fall short on. Namely: flexibility and censorship-resistance (including manipulation).

  • Flexibility - Currently, Euler users are tied to limited optionality when it comes to their pricing type. This is because if Chainlink does not already provide a price-feed, they are forced to reside with the default Uniswap option, whose risk has been thoroughly discussed in the eip 18. Adding the Tellor oracle enables users of these smaller markets another option, as Tellor is permissionless. This means anyone can incentivize Tellor’s decentralized network of reporters to provide pricing data for any price pairings they like. This maps well to Euler’s motto of allowing users to lend and borrow almost any crypto asset.
  • Censorship-Resistance - What allows the Tellor protocol to be both decentralized and censorship-resistant is built into the design on a smart contract level. It’s permissionless, in that, becoming a data reporter in our system, adding new data feeds, and using the oracle are all completely unbound from requiring any approval by a third party including the Tellor team. Data reporters are required to stake a bond in our smart contract, and that can be slashed through its dispute mechanism. This dispute mechanism robustly secures the data feeds and it also means that none of the data that gets reported by the oracle is trusted, rather it is scrutinized by an open network of incentivized actors.

Tellor has been a prominent secondary solution to Chainlink in the space, most notably Liquity and Ampleforth, so if the Euler community has been comfortable with the addition of Chainlink, they should feel assured they are in good company. With respect to Euler’s appreciation for permissionless fundamentals, adding Tellor to the mix addresses this specifically.

In adding the Tellor oracle pricing type as an option for Euler markets, the Euler community will have more optionality when it comes to oracles for newer markets (and new chains) open to it that align with its own principles of permissionless access to lending markets.

What price feeds does Tellor support?
Tellor can be used to get any price feed (or any other verifiable data) onchain. It’s a permissionless oracle, so it wouldn’t have to go through us to get set up.

New pairs can be added to our reporting client easily so that reporters can be ready to submit the data automatically when and update on the new feed is requested.

Specification & implementation

If passed, the respective contracts should be updated to reflect the new Tellor pricingType, similar to the code changes reflected in eip14.

This oracle alternative was made possible by the recently passed eIP 14 and the implementation is similar to that called for in eIP 16 1 1.

Conclusion

These changes will add a third oracle option for all markets on Euler, providing users access to an extra dynamic of pricing data that is flexible, permissionless, and censorship-resistant. We are eager to receive any and all feedback as we ultimately only want to see this proposal move forward if it adds significant value for the Euler community.

Helpful Links:

5 Likes
5

The Snapshot for this proposal is now live Snapshot

6

We have some questions regarding this proposal:

  1. What changes are required to Euler smart contracts to integrate an alternative oracle.

  2. Is the idea with integration of alternatives oracles is to use them as backup to Chainlink or as aggregation of all oracles and then taking the average/mean?

  3. How much work will this require from Euler Labs team?

  4. If answers to 1, 2 and 3 are satisfactory, will Euler integrate multiple oracles (not limited to 2)? If not, then the Dao should first do a comparative analysis on all the non-chainlink oracles available to it.

7

  1. That’s a question that’s ultimately up to the Euler team. But tellor is simple to integrate and can be done with a few lines of code.

  2. The idea would be to implement Tellor as a 3rd option (in addition to Uniswap & Chainlink) when selecting an ‘oracle type’ for users who are creating new markets. But if the Euler community wants to use it as a back stop for a more censorship-resistant system on the Chainlink oracles, that could be an option also.

  3. Very little. It’s not much code to add, and the tellor community would be happy to make a PR if requested.

  4. Its an interesting option! Would love to see what the markets demand if the options are there.

1 Like
9

Thanks @RaynHarr. I think we need to hear from Labs team on 1, 2 and 3 before moving an any additional oracle. And if those answers are satisfactory, to conduct a study as outlined in 4.

This, like some other decision (multi-chain) is not as simple as the dao voting Yes.