Pyth Network X GMB LABS AMA Recap

McCoy | GMB LABS

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AMA

2023-12-29

  • On December 28, 2023, we held an AMA at the GMB LABS Investor Protection Center with Ande Zheng, who is in charge of development and ecosystem growth at Pyth Network. Thankfully, many people submitted questions in advance of the AMA, and we forwarded all of them to Pyth Network, including pricing questions, and all of the questions were selected by Pyth Network.

Q1. What role does pyth network play in solana systems?

Pyth Network is the largest first-party oracle network for publishing financial market data on-chain. The network sources its data from over 90 first-party data providers, including some of the biggest exchanges and market makers.

Pyth offers real-time price feeds for cryptocurrencies, equities, foreign exchange pairs, ETFs, and commodities to smart contract developers on more than 40 blockchains. Pyth started its journey from Solana and quickly expanded to other ecosystems. As an infrastructure provider, Pyth supports dApps from different ecocsystems to build their products by leveraging the best data in the world.

Q2. What are the key features and objectives of the PYTH project, and how does it contribute to advancements in its respective field or industry?

The Pyth Network is designed to solve these three limitations. These shortcomings arose because traditional oracles were designed based on a fundamental misunderstanding of how financial data works.

The implicit premise behind many legacy oracles is that all data, including financial data, is freely available in the Web2 space. According to this approach, the oracle provider simply needs to incentivize network participants to fetch this data, come to a consensus, and bring it on-chain.

A network of nodes will collect or scrape data from public resources, including aggregators compiling third-party data from other undisclosed sources. This method of data sourcing may work for public datasets such as weather or sports data. However, when it comes to financial data, the oracle must make compromises in terms of data quality, costs, and scaling. Furthermore, some financial data cannot be redistributed freely due to IP laws.

The Pyth Network is built on the understanding that financial data is valuable and not freely attainable. Instead of serving a rough approximation of this data, the Pyth protocol empowers and incentivizes original owners of financial data to contribute it directly to the blockchain. The network’s data sources are called “first-party” because they create and own the data that they contribute.

It is helpful to visualize Pyth as a decentralized marketplace for market data. On the one side, creators of proprietary data represent the suppliers. Applications using this data represent the consumers. In the same way that Airbnb brought more vacation homes and spare rooms to the travel industry, Pyth Network unlocks more high-quality data for the blockchain industry by incentivizing data owners to contribute.


Q3. Are there any plans to expand Pyth Oracle's support outside of crypto?

Pyth offers real-time price feeds for cryptocurrencies, equities, foreign exchange pairs, ETFs, and commodities to smart contract developers on more than 40 blockchains. So as you can see, Pyth does not only cover crypto data, it also provides financial data including other major asset classes.


Q4. What sets PYTH apart from other similar projects? I'm curious about  PYTH 's strengths

One might ask why Pyth Network’s architecture will remain the industry’s new go-to financial oracle. The answer lies in the long-term implications of first-party price data.

Pyth Network’s first-party data model future-proofs it for DeFi’s expansion into new asset classes such as energy, treasury rates, and real-world assets which do not have free-to-access equivalents online. The distribution rights that come with Pyth's first-party data provider community ensure that the network is prepared for DeFi's expansion. If DeFi grows to serve millions or even billions of users, we should expect that it will offer new markets. Oracles need to be where DeFi grows.

Pyth Network is the largest publisher oracle network with over 90 first-party data sources publishing directly to the network. In this network, the nodes own and publish their data directly on-chain.

Because Pyth’s data providers are the owners of the data they contribute, the financial data can be freely distributed across the blockchain space and beyond. This data distribution model also maximizes access to information and removes middlemen costs for data consumers. The design brings speed and cost advantages which enables Pyth to scale to thousands of symbols and near limitless blockchains in coverage.

Although there is no single right way to design an oracle network, the Pyth Network is designed to scale without speed, pricing, or distribution constraints. The goal is to enable the next generation of Web3 capital markets.


Q5. Can you explain the ecosystem of this project? What services/infrastructure does the ecosystem include, and what is the goal of the project?

The Pyth Network allows market participants to publish pricing information on-chain for applications to use. The protocol is an interaction between:

  1. Data providers 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. The Pyth Network data provider community is comprised of global exchanges, trading firms, market makers, and other institutional as well as decentralized market participants. These providers are the creators, and therefore owners, of their price data. The data providers contribute their idea of the price of assets.

  2. The Pyth protocol combines providers' data to produce a single aggregate price and confidence interval. The Pyth protocol aggregates the data providers' inputs to produce a single aggregate price and confidence interval every 400ms for each price feed. This aggregation mechanism lives on an application-specific blockchain called Pythnet. Pythnet is configured to be a proof-of-authority chain. It runs a version of the Solana validator and is a completely separate network from Solana mainnet-beta. The Pythnet appchain processes data from various providers, combining their inputs to produce a unified price and confidence interval for each price feed.

  3. Data users read the price information produced by the oracle program. Data users on any Pyth-supported blockchain can read the price feeds and incorporate the data into their smart contract logic.

Pyth Network introduces a unique architecture called the Pull Oracle. With the Pull Oracle design, data users can “pull” or request a price update from the Pyth protocol when needed. This architecture is gas efficient because users only pay for prices they want.

Thanks to this design, decentralized applications can request a new price update from the Pyth protocol when needed. A user would submit the signed price payload to the Pyth contract on their blockchain, which verifies its validity, and then use the resulting price. This process allows Pyth price updates to reach any supported blockchain.


Q6. What does the name Pyth mean and why did they make it pyth?

We get that a lot — and while our GitHub does provide a Python client, the name “Pyth” is actually a callback to a much older and spiritually profound legacy, rooted deeply in ancient Greek history and mythology.

The name ‘Pythia’ refers to a long line of high priestesses who delivered oracular prophecies to members of the Greek poleis and travellers from across the Mediterranean. The Pythia was one among many oracles throughout the Greek world — diviners who could channel prophecies from the gods, including Poseidon, Themis, and finally, Apollo.

The Pythia — Oracle of Delphi and priestess of Apollo — was the most popular oracle in the Greek world. Visitors from the Greek poleis and beyond would travel to the Temple of Delphi to consult the Pythia on profound matters, including career, harvest, conquest, and colonization.

Pyth is taking the helm and spearheading a new generation of DeFi: one that marries the worlds of TradFi and DeFi, unlocking powerful data from both sides and delivering that data to those who need it.


Q7. There are many ways to judge the trust of a project, one of which is the disclosure of transparent team members. Please tell me the approximate experience or history of the project team members.

The contributors to the Pyth Network come from both Pyth Data Association and Douro Labs. The Pyth Data Association could not have accomplished this alone. Many talented contributors, in addition to the PDA, have made the Pyth Network possible. The network’s data provider community consists of crypto and traditional exchanges, the world’s top trading firms, and leaders in both traditional and decentralized financial services. Binance, Bybit, Wintermute, Cboe Global Markets, Optiver, LMAX, Susquehanna International Group, and Flow Traders are just some of the household names contributing their valuable data to the network.

Douro Labs is a timely addition to the Pyth Network, as contributors gear up for the growing demands of high-throughput DeFi. Duoro Labs brings full-time contributors from Goldman Sachs, BNP Paribas, Amazon Web Services, Jump Crypto, and Chorus One to help build the tooling and infrastructure for the Pyth Network.

  • We then opened up the floor for three minutes of questions, and we were inundated with nearly 300 great questions, proving that interest in Pyth Network is huge. As with the pre-questions, the questions were handpicked by the Pyth Network.


Q8. How did you get the community involved in developing the project and how do you build a strong community to grow globally?

The Pyth Network is heading towards a decentralised, permissionless mainnet and token-led governance structure.

This will enable community members and token holders to vote for the key features and figures for the Network to grow, including the data fees, data publisher metrics, rate limits etc.


Q9. Have you done any audit of smart contract?

All audit reports and security measures are available on the documentation on the official website: http://pyth.network

Please go and check it out! It is also helpful if you visit the official YouTube channel of the network for a detailed explanation video of the security and reliability efforts done by the network.


Q10. Why did Pyth, a price oracle project that supports multiple blockchains, choose Solana among many blockchains?

Solana offers a great infrastructure setting for the network to build the specific appchain - Pythnet which has the fastest block time (400ms). With this in mind, we are able to keep updating prices in an ultra-low latency!

Final info would be this article: https://pyth.network/blog/what-is-the-pyth-network

  • This concludes the official AMA, and we'll continue to host AMAs with promising projects in 2024.


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