Pyth Network (PYTH)

From CryptoWiki

Pyth Network is an oracle that publishes financial market data to multiple blockchains.

Basics

History

Audits & Exploits

"The Pyth software has undergone a number of audits from different firms. All of the audit reports are available in the audits github repository."

Bugs/Exploits

Governance

  • From a commissioned Messari report (23-5-2024):

"The Pythian Council was inaugurated in March 2024. It can be delegated the power to vote on Operational PIPs that involve updates to the oracle program and verification mechanism, adjustments of oracle update fees and denominations, and the management of PGAS (the gas token on Pythnet that is allocated/delegated to validators). Four members are replaced every election, which occurs every six months. Eight members and the Operations Wallet holder are signers of the Pythian 7-of-9 multi-sig wallet. The eight newly elected members include Afif Bandak (Synthetix), Marc Tillement (Pyth Data Association), Robinson Burkey (Wormhole Foundation), Guillermo Bescos (Douro Labs), Jayant Krishnamurthy (Douro Labs), Guilhem Chaumont (Flowdesk), Shu Tsu Wei (HMX), and Nope (Solend).

The Price Feed Council was inaugurated in March 2024. It can be delegated the power to vote on Operational PIPs that involve managing the set of offered price feeds, selecting publishers, and setting price feed requirements (i.e., minimum and maximum publishers per feed). Three members are replaced every election, which occurs every six months. Seven members and the Operations Wallet holder are signers of the Price Feed 5-of-8 multi-sig wallet. The seven newly elected members include Giulio Alessio (Pyth Data Association), Lawrence Samantha (NOBI), Nicholas Diakomihalis (Douro Labs), Antoine Bellanger (SwissBorg), Harnaik Kalirai (Douro Labs), Robert (ReactorFusion), and Matt Losquadro (Synthetix)."

  • From their new Gov blog (20-11-2023):

"Pyth Governance runs on the Solana mainnet-beta blockchain, but applies to the Pyth Network across all of the various chains where it operates. The governance system uses Wormhole messaging to communicate with Pyth contracts on other blockchains. Community governance proposals proposals can relate to all of the following:

  1. Determine the size of update fees.
  2. Determine the reward distribution mechanism for publishers.
  3. Approve other software updates to on-chain programs across blockchains.
  4. Determine the price feeds are listed on Pyth and their reference data (e.g., number of decimal places in the price, reference exchanges).
  5. Choose the publishers that are permissioned to provide data for each price feed"
  • From their docs (12-2022):

"Pythnet is powered by Solana technology: it runs the same validator software, but is a separate network that is specially configured to be a proof-of-authority chain. The network depends on a tightly controlled supply of the chain's native token, called PGAS, which is currently controlled by the Pyth Data Association. Once governance is live, it will take over management of the PGAS token from the Pyth Data Association."

Admin Keys

DAO

  • From their docs (5-2023):

"Governance will be using a coin-voting system that will help determine high-level parameters. Parameters include what types of tokens may be used for data fees; which products are listed on Pyth; the share of data fees allocated to publishers, delegators, and other uses; the number of PYTH tokens that publishers must stake or enable claims to be filed against a product, and more."

Notable Governance Votes

Treasury

Token

Launch

"There have been no announcements about fundraising, tokens, or anything of the sort."

Token Allocation

  • Gave a retroactive airdrop to ~75k wallets (1-11-2023):

"Up to 6% of the total supply (600 million PYTH Tokens) are available to eligible participants, including 100,000,000 PYTH Tokens for dApps, 200,000,000 PYTH Tokens for on-chain activity by DeFi participants, and 10,000,000 PYTH Tokens for active community members.

The PYTH Token is in the Solana Program Library (SPL) standard, meaning it is native to the Solana blockchain."

Utility

  • From Messari (10-2023):

"PYTH will serve as an on-chain governance token used to determine high-level parameters, including but not limited to the size of update fees, the reward distribution mechanism for publishers, software updates to on-chain programs, how new feeds are listed on Pyth, what the feeds' reference data consists of, how data providers will be permissioned to provide data for the feeds, and other topics determined by governance."

  • In the whitepaper docs (5-2022) it mentions PYTH as a governance and staking token. In others (12-2022) it is called PGAS.

Other Details

Coin Distribution

Technology

"Price feeds are available on multiple blockchains and can also be used in off-chain applications. Pyth offers two sets of price feeds for different applications:

  1. Solana Price Feeds are available in mainnet for Solana
  2. Pythnet Price Feeds are available in mainnet for most EVM chains, including Ethereum, BNB, Avalanche, and more. These feeds are also available in Aptos mainnet and will be coming soon to Cosmos chains and other ecosystems."

How it works

  • From a commissioned Messari report (23-5-2024):

"Pyth (PYTH) is an oracle network that aims to offer accurate prices for cryptocurrencies, equities, foreign exchange pairs, ETFs, and commodities. Pyth fosters a network of first-party (primary source and aggregator) data providers and coordinates a “pull” oracle model. This model scales price feeds across many chains and lowers network costs by offloading update fees to data consumers (applications and developers). Pyth offers three core products:

  1. Price Feeds (live updates for smart contracts)
  2. Benchmarks (historical market data)
  3. Pyth Entropy (secure random number generator)

The integrity of Pyth’s data is dependent on its contributing publisher network, which comprises over 100 data providers from global exchanges, trading firms, market makers, institutions, and DeFi. A few notable providers include Jane Street, Chicago Trading Company (CTC), Binance, Raydium, Osmosis, Galaxy, and 0x. "

  • From their docs (2-2023):

"The protocol is an interaction between three parties:

  1. Publishers submit pricing information to Pyth's oracle program. Pyth has multiple data publishers for every product to improve the accuracy and robustness of the system.
  2. Pyth's oracle program combines publishers' data to produce a single aggregate price and confidence interval.
  3. Consumers read the price information produced by the oracle program.

Pyth's oracle program runs simultaneously on both Solana mainnet and Pythnet. Each instance of the program is responsible for its own set of price feeds.

The critical component of the system is the oracle program that combines the data from each individual publisher. This program maintains a number of different Solana accounts that list the products on Pyth and their current price data. Publishers publish their price and confidence by interacting with the oracle program on every slot. The program stores this information in its accounts. The first price update in a slot additionally triggers price aggregation, which combines the price data from the previous slot into a single aggregate price and confidence interval. This aggregate price is written to the Solana account where it is readable by other on-chain programs and available for transmission to other blockchains."

Disputes

  • From their blog (18-1-2022):

"If the aggregated price is ratified as wrong, the specific at-fault publishers are identified, and their stakes are slashed and paid out to the end-users. Overall, the claims process will determine whether a payout occurs. The purpose of this process is to verify that the aggregate price and confidence interval for a product were incorrect in comparison to some ground-truth off-chain data. The process will use HUMAN protocol — an open-source software package provided by Pyth — to collect the necessary off-chain information from impartial judges and then feed that information into a predetermined algorithm that determines the outcome of the claim. Finally, PYTH token-holders will vote to ratify the output of the algorithm. Anyone will be able to file a claim against the protocol to (possibly) trigger a payout by bonding PYTH tokens. The latter is returned if the claim is ratified by governance; this requirement prevents spam."

Fees

  • From their docs (3-2022):
  1. "Publishers publish price feeds and earn a share of data fees in exchange. Publishers are typically market participants with access to accurate, timely price information. The protocol rewards publishers in proportion to the quantity of new pricing information that they share.
  2. Consumers read price feeds, incorporate data into smart contracts or dApps, and optionally pay data fees. Consumers can either be on-chain protocols or off-chain applications.
  3. Delegators stake tokens on a specific product and publisher to earn a share of the data fees in exchange for potentially losing their stake if the oracle is inaccurate."
  • From their docs (5-2023):

"Data fees from consumers [get] distributed to delegators (initially set at 80%). The remainder (20%) goes into a reward pool that is distributed among publishers."

Upgrades

Staking

  • From their docs (12-2022):

"Pythnet is powered by Solana technology: it runs the same validator software, but is a separate network that is specially configured to be a proof-of-authority chain. The network depends on a tightly controlled supply of the chain's native token, called PGAS, which is currently controlled by the Pyth Data Association. Operating a validator on the network requires a large stake of PGAS tokens. The Pyth Data Association allows each data provider to operate one validator by delegating them the necessary stake. Each data provider is then given a sufficient quantity of PGAS tokens to publish prices to the network. The network is configured such that account creation is very expensive, preventing anyone without a substantial quantity of PGAS from deploying programs to the network. Once governance is live, it will take over management of the PGAS token from the Pyth Data Association. The Pythnet blockchain has built-in redundancy to ensure high availability: it is operational as long as 2/3+ of Pythnet validators are online."

  • From their docs (5-2023):

"Data staking allows delegators to stake tokens to earn data fees. The delegators in aggregate also determine the level of influence (stake-weight) that each publisher has on the aggregate price. In addition, this mechanism determines whether delegators’ stakes are slashed. Finally, the mechanism collects data fees from consumers and distributes a share to delegators (initially set at 80%). The remainder (20%) goes into a reward pool that is distributed among publishers."

Validator Stats

  • At the end of Q1 2024, 85% of circulating PYTH was staked.
  • From their blog (5-12-2023):

"600M PYTH tokens have been staked on the governance platform."

Scaling

Interoperability

  • From their docs (12-2022):

"Pythnet is an application-specific blockchain operated by Pyth's data providers. This blockchain is a computation substrate to securely combine the data provider's prices into a single aggregate price for each Pyth price feed. Pythnet forms the core of Pyth's off-chain price feeds that serve all blockchains (except Solana mainnet). The Pyth protocol needs to be able to combine these prices to produce a single aggregate price. This computation needs to be performed securely -- prices must be combined correctly -- and reliably -- prices must always be available for applications. Pythnet solves both of these problems. First, anyone can validate that the price computation is done correctly by replaying the network's transaction log. The Wormhole guardians perform this validation when constructing the Pyth price update messages that are delivered to other blockchains. Consequently, as long as 2/3+ of the Wormhole guardians are honest, users of Pyth prices can trust that they were computed accurately."

Other Details

Oracle Method

  • From their docs (2-3-2023):

"Our market data is contributed by over 70 first-party publishers, including some of the biggest exchanges and market making firms in the world. We offer price feeds for a number of different asset classes, including US equities, commodities, and cryptocurrencies."

According to a Dune Dashboard there were 44 of the publishers actually active last week (7-3-2023).

  • From their docs (12-2022):

"Pythnet is powered by Solana technology: it runs the same validator software, but is a separate network that is specially configured to be a proof-of-authority chain. The Pyth Data Association allows each data provider to operate one validator by delegating them the necessary stake. Each data provider is then given a sufficient quantity of PGAS tokens to publish prices to the network. Once governance is live, it will take over management of the PGAS token from the Pyth Data Association."

Their Other Projects

Roadmap

  • Can be found [Insert link here].

Revenue

  • Revenue has grown from $0.01 in Q1 2023 slowly up to $1754 in Q1 2024. The user costs (gas usage) went up to $2.35M.

Usage

"Pyth Network has recently added support for more price feeds and now has exposure to over 500+ real-time price feeds, covering a diverse range of asset classes including cryptocurrencies, equities, foreign exchange (FX), rates, and metals. Here you can dive deeper into the diverse feeds Pyth offers. Pyth has 650+ upcoming price feeds across multiple chains."

  • From a commissioned Messari report (23-5-2024):

"Pyth’s total value secured grew 322% QoQ to $7.2 billion (including Ethena). It added support for 41 new price feeds, expanded to 9 new blockchains, and was integrated into 35 new applications. The top five protocols that Pyth secures are all Solana-based applications: Kamino, marginfi, Jupiter, Drift, and Solend. Collectively, these five protocols accounted for 42% of Pyth’s TVS by the end of Q1. The other protocols in the top 10 operate on other chains. These include ZeroLend, Orbit Protocol, Avalon Finance, Aries Markets, and Synthetix. Collectively, these protocols accounted for 21% of Pyth’s TVS. As such, 63% of Pyth’s TVS is concentrated in the top 10 applications across 13 blockchains."

  • From their blog (5-12-2023):

"The network has grown to support nearly 400 real-time price feeds across more than 45 blockchains, serving over 230 on-chain and off-chain applications. Furthermore, the network continues to grow at a rapid clip, with three new applications on average integrating Pyth every week. Pyth Price Feeds also now power more than 25% of all blockchain applications that use an oracle. On top of that, the publisher network has grown to more than 90 data providers, including some of the largest market makers and exchanges in the world."

  • "We are the biggest oracle in the Solana ecosystem, where we secure >$2B of value" from their job page (7-3-2022), could be outdated.
  • According to a Dune Dashboard there were 82 daily active consumers (1-2023), mainly Solana based projects. However, quite some of the providers are only online during office hours. During the month of February 2023, around 50 SOL per day was used as gas, with Pyth taking care of 40-50% of all Solana tx..
  • It also stated ~3000 daily active users (7-3-2023). "Users are defined as addresses that have signed transactions interacting with programs using Pyth price feeds."

Projects that use or built on it

Competition

  • Due to its direct API model, it is most closely related to API3 and ICP's built in oracles.
  • From Pyth's website (7-3-2022):

"Pyth’s data comes directly from data owners. This includes exchanges and trading firms. The data owners have full rights to the distribution of their price data. Chainlink's data comes from the node operator relaying it. While it is possible to find out where that data originates from by reaching out to the node operators, the operators themselves are rarely data owners.

Pyth does not use price triggers to prevent certain prices from being pushed. Pyth uses Confidence Intervals to ensure continuous price availability. This allows projects to consume Pyth’s price feeds during the most volatile market conditions. Chainlink does use price triggers with an accepted bound established when a feed is created.

On Pythnet, Pyth price feeds continuously update every 300ms. Chainlink is built as a push model oracle whereby applications can only get an updated price when certain conditions are met. For Ethereum, Chainlink updates its prices once an hour or at every 0.5% or 1% price deviation."

Pros and Cons

Pros

Cons

  • Someone made the case for Pyth oracles simply reporting whatever Chainlink reports, as Chainlink is faster and had a significant predictability of what Pyth's prices would be (23-5-2024).
  • Currently uses PoA (12-2022).

Team, Funding and Partners

Team

  • Full team can be found [here].
  • Douro Labs

Funding

  • From their blog (5-12-2023):

"This round expands the Pyth community to new stakeholders and individuals dedicated to advancing decentralized capital markets. These new community members include Castle Island Ventures, Multicoin Capital, Wintermute Ventures, Borderless Capital, CMT Digital, Bodhi Ventures, Distributed Global, and Delphi Digital."

"There have been no announcements about fundraising, tokens, or anything of the sort."

Partners

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