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Pyth Network (PYTH) is a decentralized oracle solution that provides real-time market data to blockchains. It incentivizes data providers to contribute financial data directly, ensuring high accuracy and transparency. The platform is built on the Solana blockchain and supports over 50 blockchains, offering a broad asset selection and multi-chain availability. PYTH tokens power the network and can be staked for rewards or traded on exchanges.
Pyth Network (PYTH) is used to provide real-time financial market data to smart contract applications on over 50 blockchains. This data includes prices for various assets such as cryptocurrencies, commodities, and stocks. The network's flagship product, Price Feeds, offers near real-time pricing data, which is sourced directly from exchanges, market makers, and trading firms. This direct sourcing approach enhances accuracy and reduces delays in the DeFi industry.
Pyth Network's architecture incorporates a unique pricing structure called confidence intervals, which provide pricing data alongside a liquidity rating. This approach gives traders a more accurate representation of an asset's value. The network leverages three types of participants: feed users, publishers, and delegators. Feed users are Dapp developers, DeFi networks, and web3 applications that use Pyth's services. Publishers provide data from the source to the network and receive rewards in PYTH tokens based on metrics such as accuracy and timeliness. Delegators stake their tokens to publishers and earn rewards based on the accuracy of the publisher's data.
Pyth Network offers its services to all blockchain networks via bridges, with off-chain networks paying a small fee to use Pyth's oracles. This flexibility has helped the network expand its operations, with 25% of Oracle dapps currently leveraging a Pyth solution. Additionally, Pyth Network users on the Solana blockchain enjoy zero fees, which helps drive further expansion of the Solana ecosystem.
To store Pyth Network (PYTH) tokens, you can use any type of wallet, including hardware wallets, Web3 wallets, or paper wallets. Some popular wallets that support PYTH tokens are Trust Wallet, Token Pocket, Assure Wallet, Coinhub, OKX Wallet, and Solflare. It is recommended to use a non-custodial or self-custodial wallet to maintain full control over your private keys.
To buy Pyth Network (PYTH) tokens, follow these steps:
Create an account: Register on a cryptocurrency exchange that supports PYTH, such as Gate.io, Binance, or KuCoin. Ensure you provide necessary information, including your email address and a secure password. Complete any identity verification steps required by the exchange.
Choose a funding method: Select a payment method to deposit funds into your exchange account. Common options include credit or debit cards, bank deposits, peer-to-peer trading, and third-party payment channels.
Navigate to the Buy & Sell section: Find the section where you can place orders to buy or sell cryptocurrencies. Choose the cryptocurrency you want to buy, which in this case is Pyth Network (PYTH).
Select an order type: You can use different order types such as Market Order, Stop Order, Limit Order, or TWAP Order, depending on your trading strategy and preferences.
Set the amount: Enter the amount of PYTH you want to buy. You can purchase a fraction of a PYTH if you cannot afford a full token.
Execute the order: Confirm your purchase and wait for the order to be executed. The PYTH tokens will be added to your exchange account.
- Transfer to a wallet (optional): If you want to store your PYTH tokens securely, consider transferring them to a personal cryptocurrency wallet like Metamask, which supports multiple assets and blockchains.
Remember to research the exchange, read user reviews, and compare different exchanges to choose the most suitable one for you.
The Pyth Network, an oracle network providing real-world pricing data for various assets to blockchain-based smart contracts, has a rich history. Here is a brief overview:
Founding and IncubationPyth Network was developed through an incubator program run by Jump Crypto, a division of Jump Crypto Group, a large trading firm based in Chicago. This connection to traditional finance (TradFi) helped establish relationships for retrieving real-world data.
Key Founders and TeamThe team behind Pyth founded Douro Labs in 2023 to oversee the project’s development. Douro Labs is based in Porto, Portugal and led by Michael Cahill (CEO), Ciarán Cronin (COO), and Jayant Krishnamurthy (CTO). All three have backgrounds at Jump Trading, along with various experiences in finance and software engineering.
Launch and Early PartnershipsPyth Network launched as a Solana-based protocol in April 2021. By December 2023, it had almost 100 data providers. One of the earliest data providers was Bitstamp, who joined in 2021. The network has partnered with and fundraised from several large players in both TradFi and crypto spaces, including Jump Trading, Virtu Financial, Multicoin Capital, CoinShares, and the now-defunct FTX and Alameda Research.
Growth and MilestonesBy March 2024, Pyth had secured over $5 billion in total valued secured (TVS) assets, accounting for nearly 10% of the oracles space. At that time, nearly 10% of all Solana transactions were attributable to Pyth. The development team focused on making Pyth a cross-chain solution, supporting multiple blockchains such as Arbitrum, Avalanche, and Hedera.
Token Launch and GovernanceThe PYTH token was initially launched in November 2023. Community members can obtain PYTH tokens to participate in votes that direct Pyth’s development, including setting fees, guiding rewards for data publishers, approving updates, and defining how assets are listed on the network.
Token Economics and DistributionThe maximum total supply of PYTH is 10 billion. Tokens were set to be unlocked at 6- to 12-month intervals over the course of 3.5 years (ending in 2027). The allocation includes 52% for ecosystem growth, 22% for publisher rewards, 10% each for protocol development and private sales, and 6% directly to the community and through the initial launch.
Core Mission and ValuesPyth Network aims to disrupt the flow of financial data between traditional markets and the blockchain world. It is designed to be trusted, trustless, and community-focused, with contributors from around the globe working to redefine the capabilities of Web3 tooling available for developers.
Name and InspirationThe name "Pyth" is inspired by the Pythia, a high priestess in ancient Greek society who relayed divine truth from the gods to the masses. The Pyth Network's core contributors designed a new kind of oracle to bring the truth of the world to the blockchain, following in the Pythia's spiritual footsteps.
Pyth Network is an oracle that provides real-world pricing data for both crypto and non-crypto assets to blockchain-based smart contracts. It aims to be highly accurate and efficient, ensuring that the data it provides is correct and delivered quickly. The network uses a two-participant system, consisting of consumers and publishers.
Consumers are users of smart contracts that pull from Pyth’s pricing feeds. They are charged a flat rate per request, known as an "update." Publishers, on the other hand, are market participants like trading companies, exchanges, and other financial institutions that provide price data to the network. These publishers collect fees from consumers for their services. By using first-party sources of data, Pyth can promise speed and accuracy.
The network operates on Pythnet, an application blockchain that is a fork of Solana. Each publisher runs a validator on a Proof of Authority (PoA) network. Pythnet aggregates prices from all publishers, creating a single reference price for each asset. This price is then broadcast across blockchains through pre-existing cross-chain messaging protocols to on-chain contracts, allowing Pyth’s data to reach users on any number of networks. The data is only transferred when users request it, making it more gas-efficient than other oracles that push data regardless of demand.
The PYTH token is used for governance of the Pyth Network. Community members can obtain PYTH tokens to participate in votes that direct Pyth’s development, such as setting fees, guiding rewards for data publishers, approving updates, and defining how assets are listed on the network. The token was initially launched in November 2023, with a maximum total supply of 10 billion PYTH.
Pyth Network (PYTH) has several strengths that contribute to its effectiveness and popularity in the DeFi space:
Direct-from-Source Oracle Data Feeds: Pyth Network sources data directly from exchanges, market makers, and trading firms, ensuring that the data is accurate and reliable. This approach adds consumer confidence to applications and gives Pyth Network dapps a competitive edge in certain market conditions.
No Fees for Solana Network: Pyth Network users on the Solana blockchain do not incur fees, which helps drive the expansion of the Solana ecosystem and ensures timely and quality data for Solana dapps.
Versatility: Pyth Network offers its services to all blockchain networks via bridges, allowing it to expand its operations. Off-chain networks pay a small fee to use Pyth's oracles, enabling the network to offer free services to Solana users.
Confidence Intervals: Pyth Network's architecture incorporates a new pricing structure called confidence intervals, which provide pricing data alongside a liquidity rating. This approach gives traders a more accurate representation of the asset's value.
Real-Time Market Data Access: The Pyth Network API allows developers to access real-time market data seamlessly, including prices and trading volumes for various assets. This ensures that applications can access reliable real-time data without compromising security or transparency.
Low-Latency Updates: Pyth Network 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, making it 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.
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.
Reputational Alignment: Pyth's data providers include established businesses in the traditional financial industry, ensuring reputational alignment and reducing the risk of unfair tampering.
- Governance: The PYTH token is used for governance of the Pyth Network, allowing community members to participate in votes that direct Pyth’s development.
These strengths collectively make Pyth Network a reliable and efficient oracle solution for the DeFi space.
Pyth Network (PYTH) faces several risks that can impact its reliability and security:
Inaccurate Data: The network is vulnerable to inaccurate data from publishers, which can cause financial losses for downstream users. This risk can be mitigated by involving stakeholders outside of data publishers to address the issue.
Service Outages and Congestion: Failures can occur due to Solana network congestion, RPC node outages, or issues with the publisher’s own hosting. These failures can simultaneously affect multiple publishers, making it crucial to estimate the probability of such events and their impact on the aggregate price and confidence interval.
Price Manipulation: The network’s aggregation algorithm helps mitigate the risk of price manipulation by limiting the influence of any single data provider. However, this risk is still present and needs to be monitored.
Reward Exploitation: Pyth rewards data accuracy and timeliness rather than just consensus to prevent publishers from gaming the reward system. This approach helps reduce the risk of false claims and ensures the reliability of data.
False Payout Claims: A commit-reveal scheme with decentralized judges verifies claims about data inaccuracies, reducing the risk of false claims and maintaining the integrity of the network.
Centralization Concerns: Some critics view Pyth’s use of first-party data sources from financial institutions as a form of centralization within the DeFi space, which can raise concerns about the network’s decentralization and potential vulnerabilities.
- Token Governance: The PYTH token is used for governance, and its distribution and token economics can impact the network’s development and decision-making processes. Ensuring fair and transparent governance is essential to mitigate potential risks.
By acknowledging and addressing these risks, Pyth Network can continue to improve its reliability and security, providing high-quality data feeds to DeFi applications and maintaining its position as a leading oracle solution provider.
- Michael Cahill: A prominent figure in the Pyth Network, involved in keynotes and discussions about the network's mission and governance.
- Jayant Krishnamurthy: A key contributor, focusing on token-led governance and ecosystem roles.
- Ciaran Cronin: A team member involved in the development and growth of the Pyth Network.
- Harnaik Kalirai: Another team member contributing to the network's infrastructure and operations.
- Abhimanyu Bansal: Head of Partnerships at Douro Labs, involved in strategic integrations and partnerships for Pyth Network.
- Marc Tillement: A member of the Pyth Data Association team, contributing to the network's data management and governance.
- Giulio Alessio: Involved in both the Pyth Network and Pyth Data Association teams, focusing on data management and ecosystem development.
- Nicholas Diakomihalis: A team member contributing to the network's infrastructure and operations.
- Nic Von Rupp: A team member involved in the development and growth of the Pyth Network.
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