Pythiad #2 — Liberating First-Party Data
Welcome to the second installment of the Pythiad, the official Pyth network newsletter!
For those who missed Pythiad #1, you can check it out here. We covered just about the entire history of the Pyth network, from our ‘hello world’ moment to our recent parade of data providers and integration partners.
To our followers, we say thank you again for all your support, feedback, and positivity! And to our newcomers, we say welcome.
We’re delighted to have you on board. As always, there’s much to discuss.
- Pyth Network Developments
- Our Publishers!
- Our Consumers!
- The multi-chain world is about to open!
- The Pythian Community!
Pyth Network Developments
Since the release of our Pythiad #1 on July 9th, more great things have happened. Some updates made the headlines; others were lowkey, though discoverable for the most dedicated Pythians. Everyone’s work the past month represents another critical step towards the next generation of DeFi. We’re pleased to have you along for the ride.
REMINDER: Market data shown on the website is currently sourced from the Solana testnet & devnet. As the name suggests, testnet & devnet are for testing and should be seen as a demonstration only — prices may not reflect real-world data.
New features galore!
- Have you checked out the Markets page? There’s more than meets the eye. Click on any of the listed pairs to see the feed’s price and its various components like confidence value, TWAP, TWAC (TWAP of the confidence value), and more!
- Got talent? Got love for Pyth? Let’s talk. Check out our job boards link on our website to learn more.
- Ever scrolled down on the main page? We now offer direct links to the Medium articles, just below our price update counter!
The Pyth network will continue to share announcements on the Pyth Medium. Medium continues to be one of the main publication platforms for crypto projects to update their communities and showcase deep dives into their protocols.
We’ll also be kicking things up a notch and throwing another popular channel into the mix.
Without further ado — the Pyth network substack: HiFi for DeFi.
Our substack blog will go out twice a month and represent all things pithy. Be sure to subscribe and spread the word!
Taking Fate into your Own Hands: Reading the Docs
Self-determination is near (and HiFi data too)!
Whether you’re a consumer looking to integrate Pyth data into your app, or a publisher with authorized access to data, you’ll want to get started with our docs.
If you’ve been around for some time, you might have also noticed a transition to our new Gitbook!
The action continues to originate from our Github too, of course. Please also note our switch from Pyth V1 to V2.
Any questions? Come join the Discord and ask questions directly.
In our Pythiad #1, we explained the process and rationale behind onboarding only high quality data providers to act as first party sources. We also touched on the reasoning behind onboarding providers that have not been traditional data publishers before.
Going beyond just names, have you noticed all the different types of new data sources on the Pyth network?
Consider that data is now being published by or from the following:
- FTX — one of the largest and fastest growing crypto exchanges in the world that recently achieved a record of >$400 billion in monthly trading volume in last April
- LMAX Group — the leading operator of institutional execution venues for FX and crypto currency trading. Average daily trading volumes across the Group’s exchanges exceed $30 billion (including over $2 billion/day in spot crypto-assets)
- Virtu Financial — one of the worldwide leaders in trading and execution services that accounted for nearly 10% of the total US stock trading volume in December 2020
- Genesis Global Trading — a registered broker-dealer and worldwide leader as a well established partner in over-the-counter digital currency trading who launched one of the first US OTC Bitcoin trading desk in 2013
- Serum — the first decentralized exchange built with an on-chain orderbook on which almost $6B were traded since its inception
These five names alone can be categorized into roughly 3 types of providers according to their business operations and technical structure.
FTX and LMAX are traditional centralized exchanges. These exchange’s primary operation is to act as the middleman to enable a buyer and a seller to meet and trade anonymously.
Serum is also an exchange, but it is a decentralized exchange protocol built on Solana with a CEX-like orderbook. However, Serum’s DeFi capabilities brings greater flexibility to traders as they can create their own markets; if enough liquidity is brought by other players to that listed pair, a brand new marketplace emerges.
Genesis Global Trading and Virtu Financial (among others) are not exchanges but rather, they are “traders”, or “customers” (participants) of different venues. As financial services providers and traders, these companies trade both on exchanges and off exchange (alternative trading system and over the counter), either on behalf of themselves or their clients.
Why does it matter? The diagram below is a helpful visualization:
Participating traders contribute their data, irrespective of where they’ve traded (on or off exchanges). The market structure of cryptocurrencies enables price dislocations for various reasons (such as trading fees): when trader X is active on the BTC/USD market across various exchanges, ATS and OTC, trader X is highly unlikely to face the same pricing on each venue at any point in time.
Traders themselves, when looking at their transaction prices of the same asset over many exchanges act similarly to an oracle: discovering prices from their activity in multiple markets and aggregating it into a consolidated value for them to decide where and how to trade.
The Pyth network will receive from trader-type data providers a quote derived from the consolidation of many trades that they have executed occurred in various places.
Meanwhile, exchanges — middlemen between market participants, or these same traders — produce a single price feed: the midpoint of the best bid and the best offer within the same closed marketplace. In short, exchanges contribute their data irrespective of which traders’ orders they use.
The BTC/USD price available on FTX will most likely vary from the one offered on LMAX Digital. But if the market is efficient, dislocations will not persist for a long period of time.
By combining data from trading firms and exchanges, the Pyth network covers a large share of market activity and is well positioned to produce reliable, secure, and fair price feeds.
For more details on this topic, we advise you to have a look at our Pyth and Financial Market Data article.
Who has joined the network since the last Pythiad?
- KGI Securities (Singapore) is a pioneer Securities & Derivatives, Trading and Clearing Member of Singapore Exchange as well as a pioneer member of ICE Futures Singapore & ICE Clear Singapore
- KGI Securities (Singapore) is a market leader in a broad range of areas, including brokerage, proprietary trading, and a variety of derivatives products
- Bitso is the largest cryptocurrency exchange in Latin America with now regular daily traded volume surpassing $10 million
- Founded in 2014, Bitso has now welcomed more than 2.5 million users — with half of them onboarded only during the last year!
- XR Trading is a proprietary market-making firm that provides liquidity in a full range of financial instruments across multiple asset classes
- With an innovative trading strategy that integrates technology with a quantitative automated market-making approach, XR Trading is a leader in the global derivatives marketplace
- Since 2014, Cumberland is a specialized crypto asset trading company within DRW, a well-established and diversified principal trading firm that has 25+ years of experience in traditional markets
- Cumberland DRW is one of the founders of the DeFi Alliance in 2020 that aims to bring DeFi to a billion users
- CoinShares is Europe’s largest digital asset investment firm, managing approximately 3 billions dollars.
- CoinShares Group offered the 1st regulated Bitcoin hedge fund, 1st exchange-traded Bitcoin product, 1st private fund denominated in Ether as well as the 1st exchange-traded Ether product
- CMS is a principal investment firm that operates in the cryptocurrency space.
- As a principal investment firm, CMS is both an investor and heavy user on many of the crypto ecosystem’s leading centralized and decentralized venues
- IEX Cloud, a cloud based financial data platform introduced in 2019, makes it easy for more people to access and use high-quality financial datasets from across the industry
- IEX Cloud is owned by IEX Group (IEX), a financial technology company that also operates the Investors’ Exchange LLC (IEX Exchange), a U.S. securities exchange committed to serving all market participants
- Founded in Chicago 2011 with a focus on options market making using its proprietary technology
- Akuna has been trading crypto currency since 2017 with teams trading spot, futures and options
We’re excited to have such powerful financial players join our roster of publishers. Many readers will know the other participants in the line-up:
Who’s Integrating with Pyth?
Below is a curated list of projects that have joined since we published Pythiad #1–9th July 2021
Once again, the list may not be comprehensive, as protocols can currently retrieve Pyth data from the Solana blockchain. If you are using Pyth feeds, please ping us — we’d be happy to know about it!
01 Protocol is built to become a fully community owned derivatives exchange empowering the next generation of innovative DeFi trading. We look forward to seeing Pyth play its role in both the market resolution of their autonomous binary options, as well as for their upcoming derivatives protocol!
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 leveraged long/short, interest-bearing collateral tokens, isolated lending and credit markets, among other things.
To make all of this work, Solend uses Pyth for their price oracle feeds whenever the asset is supported!
You can now try out their mainnet!
We are very pleased to continue working with Solfarm’s amazing team.
Sub-second price updates derived from high quality sources can better enable the platform to efficiently handle liquidations when users positions are at risk!
Pyth HiFi feeds will work as an additional check against the risk of liquidation during highly volatile periods where the prices on exchanges diverge severely from spot oracle prices!
We look forward to seeing them in action on any Solana dApp offering leverage to users, regardless of whether they are integrating Pyth feeds or not.
HXRO parimutuel protocol is designed to support fully on-chain, peer to peer liquidity and market functions for a simplified dual-outcome parimutuel market.
In addition, HXRO is building THEO, a decentralized hybrid AMM / Orderbook offering liquidity to both sides of options contracts, will access HiFi market data updating on par with Solana’s latency (400ms).
We cannot wait to see this innovative project launch and finally offer DeFi users a decentralized options platform with diverse products and significant liquidity.
Project Larix aims to become the ultimate lending gateway on Solana by offering various types of valuable assets to its users. With Larix, crypto tokens, stablecoins, NFTs, and more will be accepted as collateral to borrow crypto assets, generate yield, and power the real economy
We are thrilled to have them within the Pyth network and look forward to their application release!
The multiple award winner at the Solana Season Hackathon: we are proud to have Everlend Finance integrating with the Pyth network!
Leveraging HiFi market data and corresponding calculated confidence values will enable Everlend to determine users’ overall positions and maintain the platform’s health even during highly volatile periods!
Further details in Everlend Medium.
Bonfida (Audaces Protocol)
We are happy to see Pyth feeds working as market indices to provide both secure and accurate market data to the platform users!
See it live in action here! About $14 million worth have already been traded with the support of Pyth network feeds on $BTC, $ETH and $SOL!
We are thrilled to have the Solana lending protocol Port Finance integrating with Pyth network to source price data for its supported products. We look forward to Port Finance expansion to the multi-chain world!
Apricot Finance is a lending protocol built upon Solana and offers a collateralized loan platform that gives borrowers best-in-class borrowing power and lowest liquidation penalties with the highest predictability.
Synthetify is a 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 also recently listed on FTX.
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.
A multi-chain world!
By now, we believe that you know that the Pyth network protocol is built directly upon Solana. Solana was chosen for being an ultra-fast, high-throughput, and low-latency blockchain with 400ms block times and very low-cost transactions on which Pyth HiFi data will natively be available.
However, the DeFi ecosystem is not limited to a single blockchain — with Ethereum having the lion’s share of the DeFi market with more than $100B of TVL across dApps vs $1B for Solana or Terra — and as time passes by it looks more and more likely that the world of crypto will become even more multichain, each having its own perks and drawbacks.
It is thus important for Pyth to move data from Solana to other well-developed chains that often have completely different structures and capabilities (specifically block times). However, the Solana ~400ms block time serves as the lowest common denominator across major public blockchains in that dimension and gives us the privilege of being able to disseminate our HiFi prices to other chains at their native block speed.
Whether your protocol is located on Ethereum, Terra, or the Binance Smart Chain, you will gain access to HiFi data directly sourced from some of the worldwide biggest financial service providers (see Publishers section).
With the newly launched Wormhole 2.0
What is the Wormhole? And how does it work?
Wormhole is not a blockchain but is instead a decentralized attestation engine that leverages its network of guardians to trustlessly bridge information between the chains it supports.
The Wormhole is leaderless — all guardians perform the same computation upon observing an on-chain event and sign a so-called Validator Action Approval (VAA). If a 2/3+ majority of all guardian nodes have observed and signed the same event using their individual keys, then it is automatically considered valid by all Wormhole contracts on all chains and triggers or not actions according to the attestation made.
As of today , the new version of the Wormhole supports bridging in between Solana, Ethereum, Terra and the Binance Smart Chain. “Incorporating new chains is a straightforward governance process and requires no disruption of the activities on the rest of the network.”
Why is this a big deal?
Because somewhere in the near future, teams that are ramping up their projects on Ethereum, Terra or BSC (with more chains to be supported by the Wormhole in the future) can start #buidl-ing and implementing a HiFi oracle into their protocol.
More than the oracle perspective, the new Wormhole capabilities unlock many new possibilities for projects and developers that are active on the various Layer-1 protocols supported by this bridge.
Any questions Wormhole related, be sure to join their Discord and ask!
Contests, Celebrations, Encomiums: the Pythian life!
What does it mean to be a Pythian?
For us, it means being part of a tight-knit community that values camaraderie, learning, and long-term thinking about the industry and all the participants within.
The same goes for our Discord server and Telegram group in which we continue to run regular contests and special events with special prizes — including physical merch! — for everyone to showcase what they’ve got.
Think you’re a true Pythian? It’s always your time to shine.
Let’s reflect on some past events where our supporters demonstrated their passion and what they’re capable of.
Pythian Fashion Show
You may have noticed some recent buzz on Twitter with CT denizens showing off their new Pythian swag. Stay cool, stay hydrated, and stay pithy, everyone.
Pythiad Art Expo
Beauty is divine, and to be a Pythian is to partake in divinity. In this spirit, we kicked off the first Pythiad Expo in July.
Among many submissions, a top 10 was decided by the community, from which you may get a glimpse below.
You can see all the exhibits and artists on the Discord! Our artists are just warming up, so stick around for the next expo. There will even be additional rewards for the next batch of distinguished sculptors.
Every Pythian here plays a key role in Pyth development. We look forward to journeying alongside everyone in our quest to accelerate the growth of DeFi. With such a journey ahead of us, we will all need to be prepared — with knowledge and confidence.
Top performers in our quizzes are memorialized in our highscore boards and the best of the best win special rewards, including unique roles and even Pyth swag!
Even though rewards have stopped for the best performers, you may still take on the challenge to test yourself and your knowledge!
Unironically, David’s Michelangelo (or @estertttt) won the random selection! Congratulations!
Old school Pythians will also remember a golden era of NFTs from Pyth earliest days back in April. Since the infamous wen-token NFTs from the Pyth network founding, Pythians have had ample time to prepare for the next NFT contest! Stay tuned…
We’ve got abundant love here at the Pyth team and we cannot be more grateful to all of you.
But love and camaraderie goes beyond metrics. We also want to give a proper shoutout to some avid supporters and artists:
SolFarm on Twitter: “Honored to announce our continued partnership with @PythNetwork and their amazing team in our leverage product, utilizing their high quality price feeds to maintain an orderly market. #Solana https://t.co/RTmWHEerS0" / Twitter
And from an anonymous Pythian who really made our Friday: https://twitter.com/PythNetwork/status/1413505867719364609/video/1
This is the end of our 2nd issue of the Pythiad!
If you want to catch up on the first → Pythiad #1 : The Journey so Far
Future newsletters will continue to summarize Pyth monthly progress and exciting things happening in our ecosystem. They will be sweet, succinct, and pithy.
Thank you for reading!