Pythiad #10: A Pithy Spring
Welcome to the 10th installment of the Pythiad, the Pyth network newsletter!
To our followers: thank you for all your support and good vibes! And to our newcomers, we say welcome.
We are delighted to have you on board. As always, there’s much to discuss.
- Pyth Developments
- Pyth End-Users
- Pyth Publishers
- Pyth Metrics
- Pythian Community
Price Feeds Reliability
Oracles need to be highly reliable since inaccurate prices or service outages can cause financial losses for downstream users.
For example, a lending protocol that receives an inaccurate oracle price could incorrectly liquidate its users. As an oracle secures more value, the consequences of failure become more serious. Even small failure probabilities become unacceptable.
With this in mind, Pyth network’s contributing developers spend a significant amount of time on data feed reliability.
Pyth uses a Bayesian network to systematically assess the reliability of the products listed. This model allows us to answer two important questions:
- Which Products Are Ready for Mainnet?
We typically add new products to testnet and then move them into mainnet once enough publishers are quoting them. We now incorporate explicit availability and accuracy thresholds into this process: every new product must be offline < 1% of the time, and the probability of publishing an inaccurate aggregate must be < 0.001%. (In practice, achieving < 1% offline is the main challenge. The probability of an inaccurate price or confidence is typically orders of magnitude below 0.001%.)
- Which Products Need Improvement?
One of our major efforts at the moment is to improve the reliability of all existing products in mainnet. This process requires us to recruit publishers who have prices for these products; recruiting publishers can be time-consuming. The model allows us to rank-order the existing products, and thereby focus our recruitment efforts where they are most impactful.
New Price Feeds
Most platforms cannot support a specific asset without an oracle price reference. Pyth network will not stand for such a world!
The network recently added:
- ONE/USD (Crypto)
$ONE is the token behind the Harmony Protocol. Harmony is an Ethereum layer-2 that aims to make it easier for developers to design dApps.
Pyth Infrastructure Providers
Our goal is to deliver the best HiFi financial data to the blockchain. Doing so requires not only high-quality publishers but also the best-in-class infrastructure to empower our network participants.
- Why is infrastructure paramount to Pyth success?
Performance: Publishers in the Pyth network need dedicated infrastructure to maintain a high-frequency update (on par with Solana speed). To generate ~10 million price updates daily (200k per asset), the Pyth network publishers initiate about 100 million Solana transactions every day.
Reliability & Decentralization: If Pyth publishers were to all rely on a single node provider, any defect originating from it would negatively impact the whole network and the applications that depend on it. A single defective infrastructure provider would affect the publishers relying on its services in today’s environment. However, all the others would still be able to operate and continue offering HiFi data to anyone. As of today, there are 55 publishers spread around seven infrastructure providers.
- Who are the Pyth Infrastructure Providers?
Read our blog for more details.
Pyth x NeonEVM
Neon, the first cross-compatibility and scaling solution for Ethereum built on Solana, has launched its Alpha version on mainnet! We look forward to the first wave of EVM-native dApps leveraging Pyth data on Solana.
Developers planning to use the NeonEVM can already leverage Pyth data!
Our repo includes two different interface types to read Pyth HiFi prices.
The Pyth Native Interface provides access to all Pyth-specific features, including the confidence interval while the second interface is designed to be familiar to EVM developers and replicates the Chainlink Data Feeds API — excluding the historical API. The latter provides an instant solution for EVM dApps to retrieve data but disregards the confidence interval, a key Pyth metric.
Read our blog for more details.
Pyth x Wormhole x Terra
Earlier this week (April 25th), the Chicago Terra Hacker House (“The Pit”) opened its doors to Lunatics developers for a whole month of building!
Pyth, Wormhole and Terra. What could this imply…?
Pyth data is natively available on Solana and is permissionlessly queryable (no paywall exists on the blockchain).
As the NEAR/USD price feed was added to the Pyth network, 01, a decentralized derivatives exchange, quickly released its NEAR-PERP. From now on, anyone may take up to 20x leverage positions on a fast-growing alternative layer 1.
Another Solana leading derivatives platform, Drift, has also taken the opportunity to spin up new markets as the Pyth coverage expanded. In April, Drift added a DOGE-PERP, NEAR-PERP, and SRM-PERP, with more to come.
Friktion has now established itself as the leading DOV on Solana. In less than 4 months, Friktion Volts have gathered over $130M in TVL and generated over $1.3B in options volume.
Friktion uses the Inertia protocol to determine the settlement price of its European Cash-settled options. The Inertia protocol generates a 30-minute TWAP for settlement by collecting Pyth’s prices.
As of April, Friktion’s Entropy Markets expanded its offering with Perpetuals, Power Perpetuals, and Volatility Perpetuals. Regular and Power Perpetuals will leverage Pyth’s feeds to determine the index price and the according funding rate.
Another leading DOV on Solana introduced a specific strategy for sideways markets a few days before Friktion: Katana’s ‘crab strategy’ is built on the power perpetuals tech stack from 01.
The core of Lending Launchpad is an isolated pool, offering isolated asset pools for SPL native tokens. (Isolated pools are separate lending markets that support a set of assets that can be used as collateral for loans against each other. This is in contrast to having a single cross-collateral pool in which any asset can be borrowed against any other.) Up until now, Larix has only offered cross-collateral pools for supported mainstream assets.
The first isolated pool released was including the $FIDA, Bonfida, token and the second focused on aggregating all staked Solana derivatives under one roof ($mSOL, $stSOL, $scnSOL, $JSOL) and SOL.
Congratulations to the Lifinity team on their fundraising! In less than a day, their community committed almost $10M!
Lifinity is the first proactive market maker with concentrated liquidity on Solana. Its objective is to improve capital efficiency and returns provided to liquidity providers. To achieve its goal, Lifinity leverages the Pyth network price feeds to rebalance its pools and prevent arbitrageurs from extracting value from the LPs.
We invite you to check out Lifinity’s Litepaper, released a few days ahead of their raise.
Snowflake is the first automation platform on Solana offering both a smart contract scheduling infrastructure for developers and a composable Zapier-like dApp for DeFi users to compose all kinds of on-chain automation. Here is a Snowflake template that lets you set up an automation that triggers a swap when one or more price conditions (determined by Pyth p) are met.
Soda protocol, focused on creating permissionless financial identity and providing financial services including lending and leveraged trading for Web 3.0, now supports mSOL (staked SOL) on its platform.
The top Solana borrow-lending platform introduced many new isolated pools this month.
One of these pools was dedicated to C98 following the appearance of a Pyth price feed for the asset.
The leading Solana synthetics platform: Synthetify, released the 1st ever Gold (XAU) derivative on the Solana blockchain. Leveraging the Pyth price feeds, users may now get exposure to XAU thanks to Synthetify. As a reminder, synthetic, assets, and in this case, synthetic gold omits the issues occurring with physical gold: capacity limit, need for storage and transportation, and infeasibility of division
This is a rather original end-user (and we aim for many more to come shortly) as Tsunami Finance isn’t built upon Solana but rather atop Terra.
Tsunami Finance is a spot and perpetual futures exchange that aims to provide a 0% slippage trading experience to users. In opposition to Solana protocols leveraging CLOB technology, Tsunami will use a basket of assets to enable trading and leverage a price oracle to determine the exact market pricing. We are looking forward to supporting many more innovative applications regardless of the blockchain they are built upon.
After many weeks of building, submissions to the Solana Riptide Hackathon (with up to $5M in prizes) have closed. Over 400 projects were submitted, with 60 on the Pyth track!
We want to congratulate and thank all participants for their grit and support. We look forward to seeing how you’ll change the world!
The Pyth Track Grand Winner is Neptune, a lending and borrowing platform featuring elegant features such as variable & stable rate loans, collateral swapping, and self-repaying loans. We had the Neptune team on a Twitter Space earlier this week, so listen in to learn more.
Other eye-catching candidates:
- Dual Finance aims to improve significantly existing DeFi DOVs by implementing streaming prices, rehypothecated collateral, and a novel staking offering.
- Prophet is a gaming hub on Solana whose 1st game is already live on mainnet. Users can participate in the SOL/USD price prediction game, where each event lasts 5 minutes.
- Incept Protocol is a synthetic asset protocol that offers an intuitive trading experience with supercharged liquidity. One Incept novelty allows liquidity providers to choose a single asset to back a concentrated position.
- V-DEX is a synthetic protocol whose key components include a synthesizer, exchange, AMMs, governing system, liquidating system, inflation system, and oracle.
Zeta, the premier under-collateralized DeFi futures & options platform built on Solana, has, throughout April, generated over $125M in options settlement.
Thanks to their FLEX program, Zeta already supports and benefits from other options protocols looking to deploy quickly and easily on Solana. For example, Ribbon Finance, the leading DOV on Ethereum launched its SOL vault directly on Solana through the FLEX stack. As of right now, Ribbon SOL vaults gather about $5M worth of SOL.
With this in mind, we are excited to see the next Zeta ‘Composer’: Lift Markets.
Not a month goes by where Pyth does not attract more top-class data owners to the network. In April, Pyth welcomed two new publishers:
- xbullion is a global network for the settlement of physical gold and silver bullion. It applies the benefits of blockchain to bring transparency, efficiency, and accessibility to users in order to access the largest bullion marketplaces in the world, and it does so without charging ongoing custody fees.
- xbullion GOLD and xbullion SILV are tokenized precious metals on the blockchain. Each token is secured by 1 gram of physical gold or silver respectively and is directly owned by the token holder.
- Profluent Trading is a global proprietary trading firm that leverages statistical and machine learning techniques to manage funds in the equities, futures, FX, and options markets around the world.
- With a presence in Puerto Rico, Japan, Korea, and the UAE, Profluent covers all major trading hubs around the globe for 24/7 high-frequency trading.
Total Value Secured
One of the most important metrics is the Total Value Secured (TVS) by the Pyth’s price feeds. Price feeds are crucial for your operations, whether you are a borrow-lending protocol or a synthetics platform.
At the end of April 2022, Pyth feeds were securing about $2B!
Consider the amount of trading volume dependent on Pyth data. Each protocol has its Pyth integration: perpetual contracts using a CLOB or a vAMM use Pyth as their index reference to set the funding rate. Synthetics platforms use Pyth price feeds as the exchange rate basis for swaps in between synthetic assets. Finally, futures or options protocols (specifically DOVs) integrate Pyth feeds for their derivatives settlement.
In April, Pyth has enabled over $3.7B in volume to be traded.
Data is king, and the Pyth network stands committed to onboarding only high-quality data sources and establishing a natural bridge — without intermediaries — between these sources and the end-users.
The Pyth network currently has 56 publishers!
NPM & Rust Downloads
Pyth network is open-sourced, and its data is freely queryable.
You can check Pyth’s adoption rate by looking at NPM and Rust downloads.
A (Rust) crate is a binary or library. The crate root is a source file that the Rust compiler starts from and makes up the root module of your crate. This enables you to call on-chain data and make your protocol works.
It was wonderful meeting so many inspired teams and developers at the Solana Miami HackerHouse. Whether you’re already leveraging Pyth data, seeking to learn about how Pyth can power what you’re building, or looking to take part in the next first-party financial oracle we’re here for you! And thank you for being there for us!
Bahamas HackerHouse x SALT Conference
For one week (April 24–29th), ecosystem supporters mingled with some of the most influential crypto stakeholders (including Pyth’s contributors)! Many of you will remember our panels, including DeFi Building Blocks.
Meanwhile, at SALT, Pyth contributors were everywhere. For instance, the Crypto Market Making and the Maturation of Digital Assets Panel was solely comprised of Pyth publishers: FTX, Jump Crypto, Hudson River Trading, and Susquehanna.
We also had the chance to spot a wild (and rare) Pyth hat on Frank Chaparro, moderator of the Panel: Institutional Crypto Adoption — From FAAMG to Sovereign Wealth.
Following the wonderful video (in French) from Le Journal du Coin on the Pyth network and their continuous support, we are now able to present you the English version!
Spaces & AMAs
Following a busy March (10 Twitter Space shows!), we continued meeting up with wonderful teams building the future of finance.
Our first one was with the Friktion team during which we talked about DOVs and Entropy, the newly released perpetual platform.
The second space was held with Neptune: a borrow-lending protocol that won, among others, the $30K Solana Riptide Pyth prize.
Meanwhile, Mike Cahill, a Director of the Pyth Data Association, participated in an AMA organized by SolanaTW, a Taiwanese community-driven effort to spread Solana-related knowledge. SolanaTW gathers close to 10K members across Telegram and Medium. Find the complete AMA summary here.
Our friends at Serum released a hyped NFT collection this past month: Serum Surfers. In partnership with Burnt Finance NFT Launchpad, 5000 Serum Surfers were available. The Pyth network was lucky enough to be able to offer 5 guaranteed mints to Pythians. In order to pick worthy Pythians, we organized an art contest with the goal to represent the Pythia herself surfing the “Serum liquidity waves”.
Here are a couple of submissions we loved!
We’ve got abundant love here at the Pyth team and we cannot be more grateful to all of you. With this in mind, we wanted to give a proper shoutout to some avid supporters and artists:
This is the end of Pythiad #10!
Future newsletters will continue to summarize Pyth’s monthly progress and exciting things happening in our ecosystem. They will be sweet, succinct, and pithy. Thank you for reading!