🔮 What is Pyth?
The vast majority of smart contracts need external data from the real world to perform their services. Oracles perform as gateways between the blockchain and these external data sources.
Pyth network is an oracle which unlocks once-exclusive financial markets data and makes it available for DeFi and the general public.
The goal of Pyth is to make every asset price available on every chain for the world, and in doing so, empower data owners and users. Pyth currently specializes in pricing data for crypto, FX, equities, and commodities.
You may think current oracle solutions already meet the requirements of decentralized finance. Unfortunately, this is not true.
Legacy oracles update infrequently, use questionable (and sometimes illegally procured) data sources, usually cannot hold their data sources accountable, and often just scrape data from free internet resources and charge users for this service. Downstream users pay the price.
Pyth, on the other hand, sources its data directly from best-in-class global financial market participants, including market makers, global exchanges , and trading firms. These include some of the biggest names in traditional and decentralized finance who truly know what the price of any asset is at any time.
By gathering data directly from the widest range of experienced data owners, Pyth provides highly accurate financial data on-chain and at the lowest latencies. In fact, data of this quality is often accessible only to a select group of users. This type of data is critical for DeFi to scale to global adoption.
Anyone betting on Web3 (and DeFi in particular) to grow needs to first solve the oracle problem and solve for scalability. The solutions before Pyth were incomplete and unlikely to scale in robustness to support multiple asset classes at high fidelity.
The future of blockchain needs the best financial markets data, delivered securely, transparently, and reliably. That’s why we built Pyth.
⚗️ Why Developers Choose Pyth
There’s many reasons developers choose to be #PoweredByPyth. We summarize the main reasons below:
Data Offerings and Features
- Pyth has the most frequent oracle updates: Pyth prices updates every Solana slot (400ms, which is >200K updates a day!). Lower latency means more precise operations!
- Pyth’s confidence intervals protect protocols and users. No other oracle offers this safety feature.
- Pyth offers diverse data including hard-to-get data: live US equities, FX pairs, and even the prices of metals.
- Publisher performance metrics, EMA/EMAC, cross-pair support, basketing (indexing or compositing), and more.
- Pyth is open-source and its data is free. Pyth’s unique model will soon let protocols choose to pay data fees to hedge against oracle risk too.
Quality, Security, and Reliability
- Pyth sources data from the widest variety of best-in-class market participants in traditional and decentralized finance. This design choice ensures data quality and reliability.
- Pyth’s operations are transparent, and aggregation happens fully on-chain. Legacy oracles often aggregate off-chain and run opaque processes vulnerable to manipulation.
- Pyth upholds extremely high standards for security and reliability: reliability measures include confidence bands, minimum publisher rules, rigorous data feed conformance testing, and economic recourse for protocol developers.
- Pyth’s unique design removes data middlemen from the process: that means no intermediaries charging you to relay data from data sources to end users.
- Data publishers on Pyth are held accountable for the data they submit: these publishers are well aware that their data is securing potentially billions in value.
- Pyth is designed to incentivize publishers to be honest and publish their proprietary pricing information instead of copying each other to submit similar prices.
- Thoughtful network roles mechanisms keep publishers accurate, provide protection assurance to users, and allow anyone to contribute to network robustness and earn rewards.
⌛ Pyth’s Progress and Roadmap
Pyth network has made extraordinary progress since day one! Since its release in April 2021, Pyth reached devnet in just four months, before going live on Solana mainnet in August 2021.
In less than a year, the network secured more than 90% of Solana’s TVS and supported over $25B in total monthly trading volume. Today, there are 65+ publishers supporting the network and more than 80 price feeds supported.
Developers can’t get enough either: Pyth has surpassed 500K total client downloads. These milestones are a testament to Pyth’s trailblazing growth and popularity. And we’re just getting started.
Who’s Using Pyth Data?
Current data users include borrow-lending and yield applications, decentralized exchanges, AMMs, options and derivatives platforms, structured products and DOVs, Stablecoins and CDPs, automation and infrastructure, payment platforms, off-chain data anlytics, and trading institutions.
Who’s Publishing Data to Pyth?
Current publishers are comprised of market makers, traditional exchanges, crypto exchanges, trading firms, and decentralized exchanges — market participants who partake in price discovery and truly know the prices of assets.
We’re extremely grateful towards the Pythian community — from our beloved members across our socials, to our data providers who have been publishing their proprietary market data for months, to our integration partners who continue to build incredible solutions alongside us. Thank you for all of your dedication and support!
⚖️ Network Design, PYTH Token Utility, and Governance
The goal of the PYTH token’s design and mechanics is to make Pyth network self-sustaining and decentralized.
Warning: There are no PYTH tokens in circulation. Any entity claiming to distribute PYTH tokens is fraudulent. There have been no announcements about fundraising or tokens outside of the Pyth whitepaper. All important updates will come through Pyth’s official channels.
Publishers will stake PYTH to publish price feeds to Pyth. They will earn a share of data fees in exchange (or face slashing if they submit bad data).
- Publishers will be held accountable for their performance. Publishers will have to stake PYTH to be able to publish data.
- Pyth’s on-chain Aggregation and thoughtful incentive mechanisms are designed to prevent publishers from manipulating the oracle.
Consumers read Pyth’s price feeds to incorporate data into their smart contracts or dApps.
- Consumers will be able to choose to pay PYTH (or any other governance-approved token) as data fees for a data feed they’re consuming.
- In exchange for these fees, consumers may receive a payout from stakers (publishers and delegators) if the oracle price is inaccurate.
Delegators will stake PYTH on a specific price feed (and its publishers) to earn a share of the data fees.
- Delegation contributes to network robustness and the bootstrapping of new price feeds.
- Delegators’ stakes are paid out to consumers in the event of a successful claim against faulty publishers causing a bad pricing event.
The Claims Process occurs when a network participant tries to trigger a payout to consumers for a specific feed.
- Doing so requires to bond PYTH tokens which are then returned if a claim is successfully ratified.
- PYTH tokens are used to vote and ratify the HUMAN Protocol’s results for resolving a claim process.
Governance will follow a coin-based voting system.
- Governance encapsulates actions such as: approving software updates, determining which feeds to list on Pyth; determining the reward distribution between publishers and delegators; and more.