$TRB Analysis: A Decentralized Oracle with a Whale Problem?

Decentralized oracle network Tellor (TRB) has seen a resurgence of late. After enduring four consecutive months of losses, Tellor’s native token TRB rebounded as much as 198% in May 2024.

TRB’s surge has come at a time when the broader crypto market has seen sluggish price movement due to absence of market catalysts and uncertainty over U.S. Federal Reserve’s rate cut policy.

Crypto market observers suspect there can only be one reason behind TRB’s wild price movement – whales.

In this article, you will find all you need to know about Tellor and whether investors should be concerned about TRB’s high whale concentration.

Table of Contents Table of Contents

1. Key Takeaways
2. What is Tellor?
3. TRB Tokenomics
4. TRB Price Analysis
5. Tellor Tokenomics & Concentration
6. The Bottom Line
7. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. What is Tellor?
3. TRB Tokenomics
Show Full Guide
4. TRB Price Analysis
5. Tellor Tokenomics & Concentration
6. The Bottom Line
7. References

What is Tellor?

Tellor is a decentralized oracle network that provides real world (offchain) data to blockchains.

The network is permissionless which means that anyone can provide data to the system and anyone can check the validity of the data available on Tellor.

The TRB token plays a key role in providing crypto-economic security to Tellor. To become a “reporter” of data, users will have to stake a minimum amount on TRB. If a dataset submitted by a reporter is successfully disputed, they risk losing their staked tokens.

It is critically important to ensure that uncorrupted data is fed to smart contracts as the data delivered by oracles determines the outcomes of autonomous smart contracts. Therefore, oracles like Tellor are often referred to as the “backbone” of the crypto industry.

Tellor data is used for price feeds, prediction markets, bridging assets across blockchains and more.

TRB Tokenomics

For most crypto enthusiasts, their first interaction with Tellor will be through the Tellor Tributes tokens (aka TRB). Let’s understand what it is all about.

According to Tellor’s whitepaper, the “main” Tellor token exists on the Ethereum (ETH) blockchain, although Tellor can be launched on multiple chains.

TRB is designed to align incentives between users, data reporters and the Tellor community. It is used for the following functions:

• Rewards – Reporters are paid time-based inflationary rewards. According to Tellor, these rewards grow at a constant rate of 0.5 TRB per 5 minutes before resetting to zero.
• Tips – Users can tip Tellor reporters in TRB to receive priority service.
• Security – Data providers on Tellor are required to stake a certain amount of TRB tokens as collateral to prevent malicious actors and bad data. For Ethereum, reporters have to deposit 100TRB or $1,500, whichever is greater in value.
• Disputes – Any TRB holder who is suspicious of a reporter’s activity can initiate a dispute by depositing a fee in TRB. The community of TRB holders come together to vote on the dispute. Dispute fees are 10% of the stake amount.

According to crypto research firm Messari, TRB did not have an initial coin offering (ICO) or pre-mine. All the TRB tokens were created by reporters participating in the network.

CoinMarketCap data showed TRB’s total supply stood at over 2.62 million, as of May 15, 2024. TRB does not have a supply cap.

TRB Price Analysis

TRB/USDT data on Binance from August 2020 showed TRB opening the month at a price of $45.

During the 2020-2021 crypto bull cycle, TRB peaked early at about $164 in May 2021. The Tellor token was unable to break fresh all-time high later that year when Bitcoin surged to a then all-time high of $69,000 in November 2021.

The crypto winter that followed saw TRB fall to an all-time low of about $6.6 in May 2022. Despite showing signs of revival, the TRB token was still languishing close to $7 over a year later in June 2023.

As July 2023 came along, TRB finally saw some respite as the token snapped a four month losing streak to end the month 10% higher. The token built on the bullish movement to post its best monthly performance ever (+256%) in September 2023.

On December 31, 2023, TRB hit an all-time high of $629, Binance’s TRB/USDT data showed. Within 24 hours, TRB price plunged to a low of $121 as Tellor whales began booking profits.

According to onchain analytics service Lookonchain, Tellor’s team deposited 4,211 TRB tokens worth $2.4 million on Coinbase during the trade session.

In the past 24 hours, $TRB soared to $600 and then plummeted to $137, causing $68M of assets to be liquidated, making it the most liquidated token.

We noticed that the #Tellor team deposited 4,211 $TRB($2.4M) after the price of $TRB skyrocketed.

Address:https://t.co/efHPXCiMiG pic.twitter.com/IBty2Wf2gI

— Lookonchain (@lookonchain) January 1, 2024

Later on January 4, 2024, onchain sleuths at Spotonchain reported a whale dumped his entire TRB stake of 68,490 TRB after holding it for three months for an estimated profit of over $5.7 million.

Selling pressure increased on TRB as whales began to dump their coins leading to the token posting consecutive monthly losses between January and April 2024. During this time, some whales took the opportunity to pick up TRB tokens at discounted rates.

After TRB surged about 200% in the first eight days of May 2024, TRB whales pulled off the same playbook by booking profits at elevated prices. According to Spotonchain, eight Tellor whales were estimated to have booked profits worth $3.56 million in early May 2024 after holding TRB tokens for two months.

8 whales have taken $3.56M in profits from $TRB after the price surged 100%+ in the past week!

These whales withdrew a total of 82,849 $TRB from #Coinbase at only ~$80.2 between early Mar and May, then deposited $TRB away at ~$123 (+53.6%), after around 2 months of holding.… pic.twitter.com/YHb09vmhS2

— Spot On Chain (@spotonchain) May 12, 2024

Tellor Tokenomics & Concentration

Data from IntoTheBlock showed Tellor token’s concentration by large holders at 94%, as of May 16, 2024.

In comparison, Bitcoin’s concentration by large holders stood at 11%, Ether’s (ETH) concentration by large holders stood at 50% and TON’s concentration by large holders stood at 62%.

According to IntoTheBlock, a token’s concentration by large holders shows the percentage of circulating supply held by whales (addresses holding over 1% of supply) and investors (addresses holding between 0.1%-1%).

At the time of writing, 5.9% of total TRB supply was held by retail, 12.54% was held by investors and 81.57% of total TRB supply was held by Tellor whales.

Onchain data also showed that, at the end of April 2024, about 86% (2.26 million out of 2.62 million) of total TRB supply were held by cruisers – addresses that hold tokens for one to twelve months.

8.7% (~228,880 tokens) of total TRB supply was held by holders – addresses that hold tokens for over a year. Remaining 5% of total TRB supply was held by traders – addresses that hold tokens for less than a month.

The Bottom Line

Whales are influential undercurrents of the crypto market. Over the years, market participants have grown to adapt to these forces. Some have even used blockchain transparency to their advantage by closely monitoring crypto whale transactions in a strategy called whale watching.

However, the most important point is that you should always conduct your due diligence before investing. The information in this article does not constitute investment advice and is meant for informational purposes only.