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What is Telos: A simple explanation

Posted by
Ian Kane

The blockchain platform designed for Web 3.0

Telos is a decentralized computing network, global economy, and app ecosystem, powered by their scalable smart contract blockchain and TLOS cryptocurrency. Telos promises fast, scalable distributed applications (dapps) with feeless transactions. 

Since launching its mainnet in December 2018, the Telos network has been working to power the decentralized economies and provide scalable solutions. These goals include governance features that empower organizations to shift influence and decision-making to a more collaborative and transparent model.

The main features of the Telos ecosystem include:

  • Economic and geographic decentralization to ensure security and safety.
  • Equitable pay structure to incentivize node operators.
  • Developer-friendly tools and low-cost deployment.
  • On-chain governance
  • Community support, including the Telos Works proposal system and grant-making for new projects, from the independent Telos Foundation.

Team and Vision 

Telos has a team of more than 30 core developers, over 50 validator teams and, dozens of apps complemented by 100s of active community contributors. Together these stakeholders and contributors are working to improve the Telos network on an open-source basis. The broader Telos community includes more than 500,000 user accounts on the network.

Developers are working to build over 100 dapps on Telos as of early 2021, including the music rights-trading platform Zeptagram, gaming platform QUDO, social media platform Appics, and the payments system Sesacash. A full list of dapps on Telos is available here.

Against the Competition

Telos has several advantages over other platforms and importantly it can be used as a full-stack alternative or as a scaling solution depending on the needs of a project. Knowing that performance is always a priority for developers, the Delegated Proof-of-Stake (DPOS) consensus method utilized by Telos is worth particular attention as it carries 4 important pluses for developers:

1. Transactional Speed and Validator Accountability

Telos has 21 active validators voted on by Telos token holders entrusted with maintaining the network. Other validators are called “stand-by” validators and are paid to serve as a back-up to the top 21. This means that the Telos blockchain automatically rotates in standby validators to test their readiness and validator elections take place roughly every two and a half minutes giving Telos a 0.5 second block time, which is 24x faster than Ethereum. 

Additional validator accountability on the blockchain measures includes automatic kick-outs from the schedule for failing to produce blocks handled by smart-contract and consensus-driven kicks for failing to comply with validator minimum requirements.

2. No transaction fees incentivize user adoption

On a proof-of-work (PoW) chain users must pay a transaction or gas fee for every action on the network. So for example, if a user was to ‘like’ or ‘share’ a post on a dapp that was built on a PoW network a ‘gas fee’ would be charged for that single action. Something which has damaged the success of games and low-value collectibles on Ethereum. Moreover, at a time when most resources and services offer free access, a gas fee can slow down widespread adoption. 

The Telos blockchain solves this problem for dapp developers by allowing applications to stake TLOS for their users. Thus, an application can purchase or rent the amount of TLOS that their users need and remove the transaction fees from their particular application. This allows free and frictionless experiences for application users. In the event that application developers do not want to stake resources for their users, users can stake resources themselves. Allowing them to use applications without a per-use cost. Overall,  no transaction fees coupled with fast transaction speeds mean that arguably users will not even know they are using an application built on a blockchain. Interestingly, Ethereum 2.0 will become a PoS blockchain with its imminent release after operating as a Proof of Work network since its inception. 

3.  Speed and Scalability

A Delegated Proof-of-Stake network allows Telos to scale more and easier when compared to traditional proof-of-work networks. Currently, the network can process over 10,000 transactions per second, and that capacity grows with code updates, sidechains, and other growth mechanisms. This kind of transactional speed puts Telos on par with centralized entities such as Visa and Mastercard and potentially gives Telos the ability to process thousands of transactions.

4. Low impact energy usage compared to traditional POW models

One issue that has become more of a hot topic lately has been how energy-efficient blockchains claim to be. The EOSIO software, that the Telos Network is based on, is roughly 17,000 times more energy-efficient than networks such as Ethereum. The network just requires the coordination of validators using the same software to verify transactions. The tokens are sold on participating exchanges, allowing anyone to own the TLOS tokens and stake them for resources. This system makes the mining process virtual. Since no real-world resources are being exploited and energy is not being wasted on server farms needed to solve puzzles.

For developers looking to build highly scalable decentralized applications, Telos can offer low-cost dapp deployment with enhanced security and EOSIO chain compatibility. Furthermore, Telos is compatible with the EVM or Ethereum Virtual Machine and solidity contracts meaning dapps can be easily ported from Ethereum to Telos. Moreover, the platform offers dapp developers grants and funding. Furthermore, they also have a built-in network development funding via the worker proposal system, which has now distributed 3.37 million TLOS. For a full list of benefits and more information for developers about grants, funding and support click here

For the wider community and stakeholders such as TLOS token holders, Telos offers a blockchain with a developer focus. Importantly no ICOs (Initial Coin Offerings) on the platform can give assurances about its regulatory standing in most jurisdictions and piece of mind that potentially worthless projects are not launching on Telos. Moreover, the platform is aiming to provide a vibrant ecosystem of dapps to end-users that offer truly scalable solutions, fast and cheap transactions, and safety. 

The TLOS Token 

TLOS is the utility token that powers the blockchain and rewards users for staking their TLOS by paying them additional TLOS for each day that they stake. Users can use TLOS to stake for resources i.e. CPU or NET as previously mentioned or TLOS can be leased to developers.

Projects stake TLOS to use network capacity to pay for user transactions and activity. In early 2021 the release of dStor was intended to drive the use of TLOS as payment for storage even further as it sets to compete against providers such as IPFS and Amazon. 

In 2020 Telos released its first major liquidity pool called Telos Swaps. These liquidity pools allow users to swap between one token to another instantly. Telos swaps use TLOS as the primary asset for projects to lock up value against. Any project wishing to list on tswaps.com must therefore purchase significant amounts of TLOS. Additionally, In 2021 we will start to see more dapps accepting the native asset as a form of payment. One such example is the Area X NFT platform using Telos’ Marble asset standard. Area X NFT is a platform for users to create and sell digital art and collectibles along with the network’s unique fundraising technology – T-bonds.

Telos wanted to find a creative way to support the launch of TLOS, on both decentralized and centralized exchanges that didn’t impact negatively on their long-term goal. T-Bonds are a combination of DeFi and NFTs, each featuring a unique design. Ultimately, providing the liquidity to fund the ERC-20 token presale, and the Uniswap launch that followed. Each T-Bond contains a locked amount of TLOS tokens, in a transferable NFT, which is unlocked when the maturity date or maturity conditions are met. 

Telos In-Summary 

The Telos blockchain is a Proof of Stake blockchain offering users and developers gasless transactions with speeds of up to 10,000 transactions per second. Additionally, the network has a robust developer funding and grants process in place to support the building of decentralized applications. Dapps that Telos hope will be the key to mass adoption for their network.  

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