Teller’s Network Is Almost Live, Powered by Chainlink Oracles
We’re excited to announce that we have successfully integrated with Chainlink to power Teller’s distributed cloud network. The Teller protocol is gearing up to go live with three cryptocurrency price feeds via Chainlink’s Price Reference Data oracle networks, these feeds will include DAI, ETH, USDC and LINK. Teller will be the first DeFi protocol to combine off-chain pricing data with consumer credit to calculate risk for unsecured loans.
Understanding how Teller works
Teller is an open-source protocol that interacts with consumer data to calculate default risk and offer unsecured crypto asset loans. Users can supply liquidity to the protocol’s lending pools and earn interest from repaid loans. Teller leverages borrowers’ credit history to calculate an annual interest rate (APR) that is based on market conditions vs. consumer credit risk, reducing or eliminating the need for collateral.
The Teller Protocol calculates consumer credit risk as a measure of personal financial data, e.g. debt to income ratio. The latter translates into APRs that are not only based on money market interest rate, but also takes into account consumer credit risk. Variable loan APRs in turn result in variable APYs for the protocol’s liquidity providers. For the consumer, this means an affordable user experience that leverages positive credit history to lower DeFi’s exorbitant collateral ratios.
An overview of Chainlink
Chainlink is a decentralized oracle network that helps resolve connectivity issues with smart contracts, enabling users to build blockchain-based smart contracts that securely access off-chain data feeds, web APIs, and traditional bank payments. By doing so, Chainlink transforms the role that smart contracts can play in a vast number of sectors, including financial services, insurance, and supply chain.
“In collaboration with Chainlink, off-chain to on-chain credit assessment is our first mission to bridge the world of traditional finance with that of DeFi. The integrity of such decentralized oracles will be paramount for our credit risk algorithms. Chainlink’s accuracy and speed will enable us to quickly evaluate loan requests to generate terms, such as collateral asset price, through our credit risk algorithms. This in turn generates varying APRs per consumer loan terms, which are settled on chain through their oracles. We are confident in our efforts to bring secure credit assessment and unsecured loans to the DeFi ecosystem thanks to our confidence in the Chainlink network.” — Guillermo Salazar, Senior Engineer at Teller.
Integration of Chainlink’s Price Reference Data feeds will allow Teller to capture real-time price information on the protocol’s assets under management, ensuring that all APR calculations for unsecured loans reflect real market conditions. Adding Chainlink Reference Data also ensures Teller’s security, safeguarding against price manipulation by malicious parties.
Chainlink’s oracles capture this information off-chain from numerous high-quality data aggregators and make it available on-chain for any smart-contract-enabled blockchain. This allows Teller to leverage a decentralized network of independent, Sybil-resistant oracles to obtain volume-adjusted market data that is accurate, highly available, and resistant to various data manipulation attacks.
Where we’re headed next
According to DeFi Pulse, there is now more than $9 billion worth of crypto locked in DeFi protocols, up more than 500% since June. However, that is still only a fraction of the $215 trillion debt market the Teller team aims to disrupt.
Following the successful integration of Chainlink, Teller will operate as a DeFi adoption bridge, enabling the acquisition of new users by lowering the industry’s barrier to entry and increasing capital efficiency.
Contact us or learn more
You can keep up with Teller’s upcoming Alpha on Twitter, and join our community on Discord. To learn more, check out our whitepaper or visit www.teller.finance to join our waitlist. See you on the other side.
Note: chainlinkecosystem.com does not claim any ownership of this content, all credit to Teller, view official announcement.