Pyth Network is a blockchain oracle that provides financial market data. It aims to deliver low-latency, high-frequency data updates for various on-chain financial applications. With over 90 primary data providers, including major exchanges and leading market makers, Pyth ensures the accuracy and reliability of data, enhancing transparency in on-chain data.
Data consumers in the Pyth Network request price updates as needed using a "pull oracle" model. This approach avoids unnecessary updates, saves gas fees, and allows adjustments based on the requirements of decentralized applications. Publishers in the Pyth Network require dedicated infrastructure to maintain high-frequency updates, comparable to the speed of Solana updates. Pyth Network publishers initiate around 100 million Solana transactions daily, generating approximately 10 million price updates per day (20,000 updates per asset). These updates are provided by third-party data providers, including Alameda Research, Chicago Trading Company, CMS, CoinShares, Cumberland DRW, FTX, Galaxy Digital, Genesis Global Trading, Jane Street, IEX Cloud, Jump Trading, 3AC, Wintermute, and others.
To maximize effectiveness, leveraging a large number of highly skilled infrastructure providers enhances the reliability of the Pyth Network in any scenario. In fact, relying on a single node provider by Pyth publishers could have negative impacts on the entire network and applications dependent on it if there were defects in that provider. In today's network environment, a defective infrastructure provider could trigger a domino effect for all publishers relying on those services. However, other devices would still be able to operate and continue providing high-fidelity data to anyone. Currently, there are 55 publishers distributed among 7 infrastructure providers.
Mike Cahill, Director of Pyth Data Association, states, "As more publishers and developers join the Pyth Network ecosystem, ensuring participants engage in a simple and secure manner is crucial. Collaboration with infrastructure partners across different protocols will also be key to Pyth's expansion strategy."
Compared to Chainlink, Pyth Network offers faster updates. Chainlink's relatively slower pace is attributed to how it obtains data, relying on a "decentralized" alliance of third-party data providers and node operators to report information. Chainlink's price information refreshes at set intervals or dynamically responds to market fluctuations, possibly speeding up with new delay-centric updates.
In contrast, Pyth directly obtains data from first-party financial institutions, including both traditional and cryptocurrency-centric entities like Jane Street and Binance. While this institution-driven system carries a sense of "centralization" — a curse in the decentralized world of cryptocurrency — it brings significant speed improvements, surpassing competing services by several orders of magnitude.
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