The problem Tellor RNG (Random Number Generator) solves

The general problem with on-chain RNGs

As is well known by this point, this formula for churning out random numbers is vulnerable to miner attacks and the like. Block variables can be manipulated and any amount
of complex math can be reverse engineered.

To build a genuine on-chain random number, the random number generated must be a function of values that neither the contract, nor the caller know before the caller calls a random number generator function. Moreover, these 'unknown' values must be terribly hard to manipulate and fix, beforehand.

Tellor helps us accomplish both. This project leverages 1) Tellor's nature as an oracle, providing a periodically updating feed of values not known beforehand, and 2) the security provided by Tellor's proof of work system.

The architechture of a Tellor RNG

Let's say a protocol like Pool Together wishes to use this RNG. Simply put, the flow will be as follows:

• We implement RandomNumGenerator.sol i.e. the random number generator. View contract.
• Some protocol, like Pool Together, makes a request for a random number. They are added to the queue in RandomNumGenerator.sol.
• The requesting protocol will implement the IRandomNumReceiver interface and can be called back from

  generateRandomNumber

  when the number is available.
• Anyone can call

  generateRandomNumber

  post a new price update. I have an express server listening for the

  NewValue

  event on Tellor's core contract on Rinkeby, here.

Challenges I ran into

A major part of the effort went into the architecture of the random number generator. I spent a long time thinking about wha complicated math formula mixed with block dependent variables and Tellor price feed values would produce a good amount of randomness. As I later realized, this was all futile. I took a deep dive into how miners can perform attacks that manipulate block variables and reverse engineer math formulas that depend on them.

The second biggest challenge was to engineer good UX. Generally, one expects a random number generatos to spit out a random number instantly, upon request. Since the each Tellor block is only mined every 30-40 minutes, as of now, a new source of randomness would only be available every 30-40 minutes.

In the end, I decided that such a periodical andom number generator only makes sense with a random number receiver to go along with it, which it cal call whenever a new source of randomness is available i.e. when a new Tellor update happens.