Pythiad #1 — The Journey So Far
Welcome to the first installment of the Pythiad, the official Pyth network newsletter!
Pyth network is a vision coming to life: one that imagines the world of decentralized finance (DeFi) gaining comprehensive access to high-fidelity (HiFi) financial markets data securely and reliably.
Pyth connects high-fidelity market data from the world’s largest professional traders and exchanges to any smart contract, anywhere.
To our followers, we say thank you for your incredible support and energy! And to our newcomers, we say welcome aboard. We’re so happy to have you all with us.
This month’s newsletter has something for everyone. This issue will most likely be longer than our future installments. There’s much to discuss.
- What is Pyth? (The pith of it)
- What has Pyth been up to?
- Our Publishers!
- Our Consumers!
- Other Network Roles
- Going Cross-Chain
What is Pyth? (The pith of it)
Pyth network is a specialized oracle network being built by some of the biggest names in TradFi and DeFi with the goal of providing the infrastructure for DeFi to leverage reliable, institutional grade market data.
Pyth is focused on continuous real-world and crypto-related market data originating off-chain and streaming it at sub-second speeds with cross-chain publishing and sophisticated aggregation to capture data richness and foster conviction in that data. We envision Pyth becoming complementary to other oracle solutions.
Pyth is built on the Solana blockchain, which allows our data providers to continuously update prices at every slot: that’s once every 400ms — more than 200,000 updates daily! Pyth’s throughput will also increase alongside Solana’s scaling. Our oracle solution will also extend to Ethereum and Terra, thanks to Wormhole.
Our network has attracted some of the largest traders, exchanges, and financial services players who own unique, high quality market data but for whom selling this data is not a primary business. This includes real world market data in equities, bonds, FX, futures, and commodities.
Pyth network will harness their data to create alternative, reliable, and decentralized sources of high quality composite market data. Alternatives to such data are not readily available, as this data normally resides behind the walled gardens of some of the world’s largest organizations
Pyth network is intended to accept only first party providers who are the authorized owners of their data. In our network, the data provider is also responsible to maintain his own stream of quotes to the blockchain.
Data providers, with global reputations and proven performance in one of the most competitive environments out there, will have the expertise and incentive to maintain reliable, accurate, and fair data feeds.
Our aggregation method promotes the reliability and accuracy of our data feeds without sacrificing decentralization. Further network mechanisms (to be detailed in due course) will help to ensure that publishers, including smaller quoters joining in the future, will not behave maliciously and even go the extra mile to support our marketplace.
What has Pyth been up to?
What steps have we taken to get there? How far have we come since Day 1?
Hackathon and Integrations
We released the Pyth network Github to the public shortly after the launch of the Solana Season Hackathon on May 15.
We deeply enjoyed this opportunity to test and demonstrate Pyth’s capabilities through live demonstrations and proven integrations with ambitious ecosystem projects, including many of the Hackathon participants.
We had an incredible time working closely with so many innovative projects integrating with Pyth. In the Hackathon spirit, we also offered a $25,000 reward for the best hackathon project integration with Pyth network. A big congratulations to SolFarm, the first yield aggregation platform built on Solana with auto-compounding vault strategies!
If your project needs Pyth network data feeds, you’re always welcome to reach out to us. Our team is more than happy to guide you through the process and provide you the right resources.
As the Hackathon came to a conclusion, we collected extremely helpful and thorough feedback from the dev teams and their users.
This feedback informed our release of Pyth V2 in early June, an upgraded version of our protocol boasting an even better aggregation method and space for up to 32 data providers for a single asset.
Thank you to all our publishers and integration partners for coordinating with us in migrating from the V1 to V2 code — a mandatory but crucial move to benefit stakeholders and achieve greater scalability, security, and reliability.
As we continued to build out our network, we ramped up our website and introduced some nifty features:
- Price feeds! You can check out our live devnet prices for cryptocurrencies, FX, equities, and even commodities.
- Prices are fully streaming and come with a calculated Confidence value.
- Want more live visuals? You can also watch the historical data accumulate on each price pair’s price action chart.
- Documentation for consumers and publishers are available in the Developers page. Take fate into your own hands!
Who do we have onboard as data publishers and why?
Decentralized finance relies on high-fidelity, time-sensitive, real-world data, but has no way to access it.
As discussed earlier, reliable institutional grade market data oracles with sub-second latency and constant streaming capabilities are lacking in DeFi. We hope to fill this gap.
There are idiosyncrasies with this type of latency sensitive data that require a special oracle solution. Existing solutions focus on wisdom of crowds to source data or a traditional data distribution workflow wherein data may be delayed or not sourced from where the best market data happens to be.
Thanks to Solana, Pyth is able to continuously stream such data at affordable costs instead of relying on constricted models like a request for quotes architecture. Our publishers can continuously update prices at every slot — currently once every 400ms (Solana’s current speed, with plans to optimize these specs).
We therefore need publishers with the technical expertise, proven performance and track record in their field, as well as credibility to support and become aligned with our network.
More specifically, we need both (a) data owners who have not historically operated in the data distribution space and (b) primary data sources. The former provides the network a new and cheaper way to source data. The latter helps avoid the latency cost of hops and allows for the most expedient way to get data on-chain.
Jump Trading Group
- Globally-positioned, proprietary trading firm that remains on the cutting edge of algorithmic trading
- Active in futures, cryptocurrency, and equities markets globally
- Designated Market Maker (DMM) on NYSE
- Trades approximately 50,000 financial instruments across multiple asset classes globally
- Leading operator of institutional execution venues for FX and crypto currency trading
- Average daily trading volumes exceed $30 billion (including over $2 billion/day in spot crypto-assets)
- Recognized and listed (NASDAQ) global leader in market making and execution services
- Provides liquidity for over 25,000 securities, spread over 235 venues and 50+ countries
- The Bermuda Stock Exchange (BSX) is the world’s preeminent, fully-electronic, offshore securities exchange, offering domestic and international issuers an affordable, well-regulated listing venue
- The BSX is wholly owned by Miami International Holdings (MIH)
- Registered broker-dealer and worldwide leader and established partner in over-the-counter digital currency trading
- Facilitates billions of dollars on a monthly basis in digital currency trades, loans, and transactions
- Cryptocurrency exchange built by traders, for traders
- Offers innovative products, including industry-leading derivatives, options and volatility products, tokenized stocks, prediction markets, leveraged tokens and an OTC desk
- Leading provider of liquidity and pricing on derivatives exchanges around the world
- Recognized leading provider of liquidity and pricing on derivatives exchanges around the world, trades more than 20 hours a day, six days a week.
- Decentralized exchange and ecosystem that brings unprecedented speed and low transaction costs to DeFi
- Composable fully on-chain central limit order book
And more to come.
What’s expected of our publishers?
Our expectations are strict. Onboarded publishers will utilize their technological capabilities and market expertise to continuously disseminate their data on-chain and aggregate it securely.
Our aggregation methodology is based on formal likelihood methods to combine individual quotes.
- All quotes are responsible for generating and broadcasting an aggregated price, a confidence interval, volatility measures, TWAP, and other price indicators.
- These measurements improve the informativeness and conviction behind this data for consumers.
All oracles are first party and responsible for their data’s accuracy and uninterrupted streaming.
- In our first stage, we have partnered with formidable industry participants to act as publishers whose reputations deeply disincentivize them from manipulating their own streams on Pyth Network.
- In the future, publishers will be incentivised with on-chain rewards and slashing to further align incentives and provide additional assurance to consumers.
In scientific and engineering fields, an observation or measurement is almost always accompanied by a measurement uncertainty. Measurement uncertainty indicates how much precision or uncertainty there is in a single observation.
Market participants are typically not accustomed to thinking about measurement uncertainty when it comes to price in financial markets, but the concept can easily be extended there. Pyth data providers stream a price along with the confidence/uncertainty that they estimate using information available to them.
Multiple data providers on the Pyth network are reporting a measurement of the price of an asset. Each of them may be considering different data sources (which they are legally entitled to use for these purposes), and reporting at most once per Solana slot (~400ms) and asynchronously (so quoter A and quoter B might report prices they observed 200ms apart from each other in the same Solana slot).
In practice, a data provider focused on a particular market could represent the confidence value as the bid-ask spread on that venue. If they’re focused on multiple venues for the same asset, a publisher could represent confidence as a function of where they expect trades to occur.
In different markets, uncertainties will vary due to market structure but can quickly be understood when looking at its visual representation.
The Pyth network empowers data consumers by continuously publishing a consolidated estimate of these important dislocations.
Who are our consumers?
Strictly speaking, Pyth network data consumers are the protocols integrating our feeds and retrieving prices and confidence values to operate their dApps.
Of course, those protocols have their target audience and consumers: their daily users interacting with the dApp.
For Pyth network, anyone interacting with a protocol leveraging the Pyth feeds is not ‘a consumer’, but rather, a beneficiary of some of the highest quality data sources for financial assets.
But who are those protocols choosing Pyth network as their data sources?
During the Solana Season Hackathon, we onboarded and integrated our oracle solution with dozens of promising projects — both hackathon participants and pre-existing projects.
The list below is not comprehensive. Data provided by the Pyth network is publicly available on-chain: anyone can query it!
Hackathon Integration Partners
Zeta Markets — Solana Season Hackathon Winner
Zeta (ζ) is the premier under-collateralized DeFi options platform, providing liquid derivatives trading to individuals and institutions alike. The Zeta team looks to build the world’s fastest on-chain options pricing and liquidation engines by accessing high-frequency price data on-chain.
TL;DR: The confidence value enables Zeta to provide short-term binary options without having to worry about if the oracle price has a huge candle on the very last second of trading. How?
Zeta’s binary options settle to half their payout for both longs and shorts if the strike is within this uncertainty interval. This allows us to provide tradeable, short-term products whilst preventing the risk of random price disagreements close to expiry!
We are extremely excited to see this kind of product innovation made possible thanks to confidence values provided from the oracle side!
SolFarm — Pyth Track Winner
SolFarm is the first yield aggregation platform built on Solana with auto-compounding vault strategies.
Although a successful protocol prior to the Hackathon, SolFarm nevertheless participated and took the chance to expand its protocol services and enable users to open leveraged yield farming positions with their vaults. Doing so also enabled the creation of liquid borrow and lending markets, allowing for additional interest earning activities. Learn more here!
The SolFarm team won the Pyth Track Prize for the best integration of not only Pyth’s feeds but also the SPL token lending program.
Track and Prize Winners (in no particular order)
Solend — Winner of the DeFi Track
Solend is an algorithmic and decentralized protocol for borrowing and lending which enables users to earn interest on their assets and borrow to leverage their exposure to an asset.
Solend aims to unlock leverage long/short, interest bearing collateral tokens, isolated lending and credit market, among other things.
Solend is now live on Devnet for you to try out! Currently, users can supply liquidity, borrow, withdraw, or repay their (devnet) loans.
To make all of this work, Solend uses Pyth for their price oracle feeds!
Francium Protocol aims to provide diverse yield targets and strategies with leverage allowing users to open leverage positions on multiple strategies such as portfolio management, yield farming, algorithmic trading strategies, etc. The platform also offers a visual toolbox for building strategies.
In the first phase of Francium, Pyth feeds will be integrated for the various liquidity pools to enable users to lend and earn interest or borrow to leverage their position in the yield aggregator.
Francium is looking to extend its reach to various other financial markets and assets (stocks, precious metals, etc.) while keeping a high quality data source. We are thrilled to engage with projects who also seek to onboard what we consider the best potential data providers not just for crypto, but also for traditional assets.
Solaris is a non-custodial lending and borrowing protocol with trading features such as flash loans, open leveraged positions, as well as margin trading. Solaris is currently available in an Alpha version.
Pyth Network will provide price feeds to Solaris’ lending markets. The graphic below presents a great overview of how Solaris will operate:
Laguna Finance is an asset management platform that enables users to passively access the best yields on Solana through 3 different products:
- Cove offers composable strategies variably applied to pools of liquidity
- Surge is an auto-compounding solution that maximizes yield farming returns
- Whirlpool is a liquid staking where users can deposit their stSOL tokens for additional yield
Laguna Finance is currently on Devnet.
Pyth Network price feeds will be integrated into their strategies and yield optimizer to deliver live prices to the platform.
Apricot’s debut product, Apricot Lend, is a collateralized lending protocol that seeks to maximize users’ borrowing power while minimizing liquidation penalties and uncertainties.
Pyth is currently integrated for the pool prices and we look towards the future to see further interaction between Apricot and Pyth feeds.
Apricot is also planning to launch a rich set of related products in the near future that would need to retrieve market data, such as orderbook-based fixed rate loans, low-to-no collateral loans, template-based high frequency operations, and more to accommodate a wide range of user needs.
Port Finance is a lending protocol that aims to provide a whole suite of fixed income products including: variable rate lending, fixed rate lending, and interest rate swap.
Current features offered also enable cross-collateral for loans and flash loans. Later on, protocol-to-protocol lending will be introduced as well as margin trading.
Port Finance looks to integrate with Pyth feeds once they are released to mainnet.
Having Port Finance on board, in part for our native TWAP availability in our price accounts, showcases the usefulness in oracles providing not only live prices but also other types of “prices” alongside.
Everlend Finance — Eastern Europe Track Winner & Serum Prize Winner
Everlend Finance is a decentralized cross-chain lending protocol with leveraged yield farming and liquid staking. Congratulations to Everlend for receiving the Serum prize and first place for the Eastern European track for their Hackathon submission!
Everlend Finance’s current features enable users to use different tokens as collateral as well as offer flexible borrower instructions. Later on, the dApp will look to support cross-chain borrowing and lending through the Wormhole, offer leveraged yield farming, and use staking derivatives as collateral!
Everlend uses on-chain price quotes for assets to correctly identify the value of collateral and liquidity loans. This allows Everlend to estimate the position’s health and establish the borrow limits, liquidation threshold…
We are pleased to see Pyth becoming a key component to such a promising protocol.
DAGG Trade is a DEX aggregator protocol initially focused on Solana but will expand to provide cross-chain access for enhanced liquidity.
DAGG aggregator, designed for splitting up trades to minimize slippage, is integrating the on-chain price from all of Pyth’s Price Reference Contracts into the UI and will serve as the basis for calculating the USD value of user balances and token amounts.
Soteria aims to introduce an interest-bearing stablecoin that is price stable, censorship resistant, and backed 100% by a delta neutral position using derivatives.
Soteria already exists as an Alpha version here, from which you can deposit your assets and convert them in USDS (Soteria stablecoin) to earn some yield on your stablecoins.
Pyth feeds and prices are integrated for Soteria perpetual swaps and could later see a greater implementation in the Soteria app.
General Integration Partners
Projects from before and during the Hackathon have announced integrations with us:
Synthetify is an upcoming synthetic assets platform which aims to provide a bridge between cryptocurrencies, stocks, fiat currencies and other financial instruments directly from one decentralized exchange.
You can try Synthetify on the Devnet. $SNY was recently listed on FTX. Developers will also be interested in the Pyth integration made by Norbert (Synthetify’s founder), enabling Pyth feeds to be used from Anchor for Project Serum.
Pyth feeds (BTC, SOL, and SRM) are integrated into the dApp to determine the exchange rate between assets to enable users to trade synthetic products.
Solrise Finance is a decentralized fund management and investment protocol built on Solana and Serum.
Prior to its successful IEO ($SLRS) on FTX, Solrise held a two staged incentivized testing period (DAWN) which received approximately 50K registrations to try out the platform and have the opportunity to win prizes.
Solrise Finance will primarily leverage Pyth Network’s price feeds to determine and display the current value of funds and calculate each pool share.
Saber is a Solana-based DeFi protocol allowing anyone to securely trade and earn with pegged assets, like stablecoins and tokenized bitcoin.
Starting early July, users are now able to trade both renBTC and wBTC (Sollet) using Saber’s low slippage stableswap AMM. Additionally, investors can earn returns from trading fees by supplying liquidity to the renBTC-wBTC pool.
Saber implemented a USD price conversion on the frontend using Pyth Network for the BTC stable pool.
Bonfida, known as the flagship Serum GUI and which offers a full product suite (API access, Token Vesting Contract, and Solana Name Service) is again expanding its reach to introduce on-chain perpetuals based on the whitepaper of the Audaces Foundation.
Inspired by the Ethereum Perp Protocol, and built upon Solana, Bonfida seeks to resolve the time symmetry issue which forced the Perp Protocol insurance fund to continuously pay funding to long traders during the past year uptrend.
Audaces vAMM will leverage Pyth Network feeds in its architecture to effectively implement the fastest possible liquidation solution on Solana. Pyth feeds promise time resolutions on par with Solana slot times (400ms).
Solstake is an open-source and non-custodial interface that makes staking SOL effortless.
Try out Solstake.io: create a stake account, choose validators, and manage all your staking activities in a single place.
For now, one Pyth price feed (SOL/USD) is currently integrated into the Solstake.oi UI.
Fabric is a protocol for issuing and trading synthetic assets on Solana. Users will be able to stake $FAB to mint SPL synthetics at a collateralization ratio of 1000%. Minting assets as SPL tokens will enable them to be traded across Serum DEX.
Pyth feeds are to be integrated when minting/burning Synthetics or when calculating a user’s collateralization ratio.
Mango Markets is a decentralized trading platform currently offering spot margin trading. To achieve such, the initial margin protocol introduced a borrowing and lending layer on top of the Serum Dex v3.
More than just spot margin, Mango Markets aims to also release Perpetual Futures on Solana. Mango makes use of an on-chain CLOB and cross-margin with Serum DEX to enable easy hedging. Pyth price feeds support funding rate calculations (via comparison between market price and the index price coming from the oracle).
Moet Finance is a decentralised perpetuals and options protocol built on Solana and ProjectSerum with a hybrid virtual AMM and orderbook.
Pyth price feeds enables Moet Finance’s perpetual architecture to accurately mark accounts margin values for immediate PnL updates and real-time liquidations.
For further safety in highly volatile market conditions, Moët Finance will also be able to natively leverage Pyth TWAP pricing, which is provided for all assets alongside their live prices.
Sypool is a synthetic asset management protocol which enables you to build, manage, and trade your portfolio tokens easily.
Sypool will have four products gradually released, which are index-tracking SAP (Synthetic Asset Pool), trader-based SAP, structured yield fund, and assets-backed quantitative trading SAP.
Sypool will leverage Pyth feeds to deliver real-time on-chain market data.
The Parrot Protocol is a DeFi network built on Solana that will include the stablecoin PAI, a non-custodial lending market, and a margin trading vAMM. These are all use cases designed to solve one single problem: making value locked in DeFi systems accessible.
Currently offering stablecoins swaps (USDC, USDT, PAI) to its users, new products requiring external sourcing of prices like FX will see Pyth integrated into the Parrot solution.
Whew! That’s quite the list. There’s more where that came from, so stay tuned.
1Sol is a cross-chain DEX aggregator for decentralized protocols on Solana enabling seamless, efficient and secure operations within the DeFi world.
Thanks to their internal Smart Calculator, 1Sol aims to find the best swapping path among the various chains (Solana, Ethereum and Binance Smart Chain) and venues (DeFi, CeFi, OTC).
Pyth network feeds will be integrated within this Smart Calculator to help 1Sol offer more efficient swaps to users.
DeFi Land is a multi-chain agriculture-simulation web-game created to gamify decentralized finance and further the adoption of DeFi to the general population. More than gamifying the DeFi experience, DeFi Land will offer all the features that centralized & decentralized traditional platforms have in only one place.
DeFi Land is currently working on their V1 of the game — which will soon be released — and will include the following:
- Liquidity providing
- Staking & yield farming
- Customizable lands
- Educational land (practice mode)
Are there other roles?
There are multiple roles in our network and we’re excited to announce further details in due course.
Which of these roles do you identify as?
- Data Providers — who have legal access to distribute unique data sets.
- Delegators — who help demonstrate confidence in the data from a particular Pyth data provider by selecting them based on historical performance and accuracy.
- Consumers — who use the data.
Pyth, being built directly upon the Solana blockchain, presents some significant advantages: all Pyth data is on-chain and publicly accessible, including its highly computing intensive calculations.
But if Pyth data is natively available on Solana, how will it reach the other regions of DeFi?
Pyth will go cross-chain via the Solana Wormhole, the bi-directional decentralized bridge between ERC20 and SPL token standards. Wormhole allows projects, platforms, and communities to move tokenized assets seamlessly across these blockchains.
Oracle prices are also expected to be supported and be live on Ethereum, Terra and the Binance Smart Chain shortly after our mainnet launch on Solana!
Plugging into the Ethereum network is almost self-explanatory. While Solana allows us to stream data continuously and inexpensively, the vast majority of dApps still reside in the Ethereum domain. Wormhole is readily extendable to any EVM based chain, meaning we can bring Pyth data into the Ethereum world.
Terra is one of the fastest growing and most promising blockchains with an ever-growing developer community and we look forward to synergizing with the Terra ecosystem. As IBC grows into adoption, we will also look to expand into other Cosmos based chains, whether through Terra or onto other individual chains.
That was a lot for our first Pythiad issue!
Future newsletter will summarize Pyth’s monthly progress and exciting things happening in our ecosystem. They will be sweet, succinct, and pithy.
Thank you for reading!