Pyth Network (PYTH): A Game-Changer in DeFi Oracles
Smart contracts on a blockchain are autonomous and self-executing, but they lack the ability to natively fetch and verify data from outside their network. This limitation hinders their potential, as real-world applications often require such external data. Oracles serve as bridges that fetch and verify this external data for smart contracts. However, the reliability and trustworthiness of these oracles become a concern, as they have significant influence over the execution of the smart contracts. The data provided by the oracles can directly impact the outcome of a smart contract, making the selection of a reliable oracle crucial. This is the reason why Pyth Network, a decentralized oracle, has gained attention as a potential solution.
What is Pyth Network?
DeFi has promised to reshape how we manage our money, empowering individuals to take control of their financial destinies. Yet, traditional oracles fell short in providing ultra-low-latency, institutional-quality market data essential for sophisticated financial services on the blockchain. This gap prompted the birth of the Pyth Network in 2020.
Pyth Network is an innovative decentralized oracle that sources financial market data from over 90 first-party publishers, including major exchanges and market-making firms worldwide (e.g., CBOE, Binance, OKX, Bybit, etc.), and distributes the data across 40+ blockchains.
How Pyth Network Works
Picture Pyth as a decentralized marketplace for market data. Unlike traditional oracles that relied on nodes collecting data from public resources, Pyth stands out by incentivizing original owners of financial data to contribute it directly to the blockchain. This unique "first-party" data model future-proofs Pyth for the expanding world of DeFi. The network's data providers, consisting of global exchanges, trading firms, and market makers, are the true creators and owners of the data they contribute.
Three Components of Pyth Network
1. Data Providers
These are the contributors of Pyth. Global exchanges, trading firms, market makers, and other institutional and decentralized market participants form a diverse community that directly supplies their proprietary data. Pyth specializes in two types of price data—tradeable asset prices from exchanges and the most recent transaction prices from traders.
2. Pyth Protocol
At the core of Pyth lies a protocol designed to aggregate data from various providers, creating a unified price and confidence interval every 400 milliseconds for each price feed. This aggregation occurs on an application-specific blockchain named Pythnet, configured as a proof-of-authority chain, ensuring robustness and accuracy in the data.
3. Data Users
The end-users, which are applications on Pyth-supported blockchains, read these aggregated price feeds and seamlessly incorporate the data into their smart contract logic. What sets Pyth apart is its "Pull Oracle" architecture, allowing data users to request a price update when needed. This innovative approach is gas-efficient, meaning users only pay for the prices they require, avoiding wasted gas fees on unused updates.
Products of Pyth Network
Pyth Price Feeds
Pyth Price Feeds offer over 350 low-latency price feeds, updating every 400 milliseconds across various asset classes such as cryptocurrencies, equities, and more. This product is accessible without subscriptions or engagement with sales teams. Developers only need to integrate it into their applications.
Pyth Benchmarks
Pyth goes beyond real-time updates with Pyth Benchmarks. This product allows users to query a historical archive of prices from Pyth Price Feeds. It provides a standardized approach to calculations and presentations, bringing consistency to settlement and valuation processes.
Why Pyth Network is a Game-Changer Among Blockchain Oracles
The threefold model allows Pyth Network to address the limitations of traditional oracles by focusing on speed, coverage, and sourcing/quality of data:
- Low-Latency, High-Frequency Updates: While traditional oracles struggled with slow update times, Pythnet updates each Pyth Price Feed multiple times per second, ensuring that decentralized applications can access the most recent off-chain prices for every transaction. This approach provides a level of updates that was previously impractical.
- Price Feed Coverage and Multi-Chain Availability: Pyth's technical capabilities enable it to scale to thousands of price feeds. Supported by Solana's high-throughput and cost-effective transactions, Pyth Price Feeds are accessible on all Pyth-supported blockchains by default. This eliminates the need for individual deployments on each target chain, making Pyth a compelling oracle for launching new data feeds. Because of this, Pyth Network is able to support more than 40 blockchains at the time of writing.
- High-Resolution, High-Fidelity, Transparent Data: By focusing on "first-party" data, Pyth ensures accurate prices, as data providers actively participate in price discovery. The transparency of Pyth Network's aggregation mechanism allows users to trace each data point back to the public keys of the data providers. This transparency, combined with the reputational alignment of data providers, reduces the risk of unfair tampering.
PYTH Token as a Testament to Pyth Network’s Values
PYTH token is designed to propel Pyth towards decentralization, self-sustainability, and permissionless functionality - a mission underscored by the implementation of on-chain governance. Pyth Network's on-chain governance plays a pivotal role in determining critical network parameters, ranging from determining update fees and reward distribution for data providers, to approving software updates across blockchains. PYTH encourages transparency and contribution from various stakeholders of the Pyth Network.
PYTH goes live on Bitget
We are thrilled to announce that PYTH is now listed in Bitget’s Innovation Zone and DeFi Zone.
This is a prime opportunity for investors to be a part of the Pyth Network's oracle evolution. Join Bitget, trade PYTH, and embrace the limitless future of DeFi with confidence!
How To Trade PYTH on Bitget
Step 1: Go to PYTHUSDT spot trading page
Step 2: Enter the amount and the type of order, then click Buy/Sell.
For detailed instructions on how to spot trade in Bitget, please read The Uncensored Guide To Bitget Spot Trading.
Looking ahead, the future of Pyth Network and PYTH look promising. As the blockchain industry expands into new asset classes like energy, treasury rates, and real-world assets, Pyth Network's first-party data model is well-equipped to handle these advancements. Unlike legacy oracles that struggled with speed, pricing, and distribution constraints, Pyth can scale without compromising on these critical factors.
Trade PYTH now on Bitget!
Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.
