What are FTSO's: A Complete Guide

What are FTSO's: A Complete Guide

What is the FTSO or Flare Time Series Oracle?

In short, it’s one of the Flare Networks features that sources token pair pricing data in a decentralized manner. Moreover, it provides an additional passive income vehicle. 

Throughout this FTSO guide, you’ll learn about the Flare Network and its FTSO feature. Also, you will understand how the mechanism works and a couple of simple ways you can use FTSO to generate a passive income.

What Is the Flare Network?

In the Flare Network, smart contracts are converted into computer-friendly instructions using the Ethereum Virtual Machine (EVM). Because of this, the network can run Turing complete smart contracts.

With these contracts, you’re able to run almost any computational task if your network has enough memory.

Flare also uses a protocol dubbed Avalanche that works with Federated Byzantine Agreement (FBA). FBA is a consensus mechanism used on networks like Stellar and XRP Ledger (XRPL).

The Flare Network’s native token is Spark (FLR). You can use this token to participate in protocol governance as collateral when using decentralized applications (DApps) and give data to an on-chain oracle.

What Is the FTSO?

The FTSO is a Flare Network feature that provides externally sourced decentralized data estimates. For example, instead of gathering data in a centralized manner from an exchange, a Flare Time Series Oracle provider would collect data from primary FTSO contributors.

How FTSO Works

For Flare Time Series Oracle to work, you need to first break FTSO down into four areas:

  • Data providers
  • Token holders
  • Rewards
  • Voting rounds

FTSO Providers

Everything involving FTSOs begins with data providers. These providers will source data from various exchanges using their own methods. Afterward, they will provide an average price estimate.

Keep in mind that most providers will employ different methods—each varying in accuracy. Therefore, when choosing a provider, your goal is to opt for the most accurate data provider. 

Who Are Primary FTSO Contributors?

Token holders are primary FTSO contributors to price data estimates. Whether you hold FLR or F-Asset (e.g., FLTC or FXRP) tokens. The delegators who cast their votes contribute to a decentralized external price feed into the Flare Network.

The Flare Network rewards FLR tokens to those who vote with Spark. However, when token holders delegate F-Assets, they assist in maintaining the integrity of existing smart contracts.

Voting Rounds

These voting rounds are based on a governance variable, which Spark holders decide. They will also occur every (X)-amount of minutes. Every voting round will result in a group of FTSO providers as winners for that voting round.

How does a voting provider win a round? First, a provider must send its voted price estimate to the Flare Time Series Oracle that’s around the median of all submitted price estimates. Moreover, the FTSO removes providers from consideration who fall into the top or bottom 25% of the price estimates.

Rewards

Each provider isn’t rewarded equally. Moreover, the different types of token holders aren’t rewarded equally. For example, while FLR holders receive Spark tokens, F-Asset holders benefit from incentives from data providers.

Our Flare Whitepaper dives into the various award rates and periods.

How To Make Money With FTSO

You’re likely wondering how to make money with Flare Time Series Oracle. There are a couple of ways. Best of all, they’re passive income, which means that you can invest your time elsewhere.

Token Delegation

If you don’t have much technical knowledge to build an FTSO provider, you can select an existing FTSO provider and delegate your tokens to them. First, however, you will want to ensure your FTSO provider has excellent performance. Because your provider’s performance will determine your earnings.

Some providers will offer an incentive for your delegations (or votes), so these types of providers would be great places to use F-Assets. However, keep in mind that you won’t receive Spark in return if you delegate F-Assets to a provider.

Build an FTSO Provider

Once you familiarize yourself with FTSO, you can use your expertise and build an FTSO provider for yourself. You will do this by using APIs like Web3 to interact with the blockchain. However, a part of this method to monetize FTSO that isn’t as passive is that you’ll need to build a community.

The community you create will have to trust your software and delegate tokens to profit.

4 FTSO Tips for Finding the Best Performing Provider

By now, you’re likely wondering how to find the best FTSO to get the best profits. Keep the following tips in mind, and you’ll be able to spot potentially ideal FTSOs:

  1. View the rewards of the previous payout
  2. Distribute your tokens equally: otherwise, if voting power reaches over 10%, reward rates will significantly drop
  3. Aim for signal providers who offer lower fees: while the standard is 20%, some providers may offer 15% or lower
  4. Follow signal providers on social media platforms in case they offer incentives to use their service

Final Thoughts on FTSO

Now that you have a better idea of what is the FTSO, how it works, and what the Flare Network is, you have an additional means to expand your cryptocurrency portfolio.

FTSO also offers a couple of ways to make passive income. Whether you want to delegate your own tokens or would like to create a property where other community members can delegate their tokens.

Discover what exchanges support Spark. Then, start your journey toward expanding your portfolio and building a passive income stream from FTSO.

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