Pyth Network is designed to supercharge DeFi apps and bridge the gap between traditional and on-chain finance. The launch of Pyth Price Feeds in 2021 marked a pivotal step in this mission. As DeFi expands, the needs of builders and users continue to evolve. The demand for heightened security and reliability in Web3 capital markets by smart contract developers and market participants has never been greater.

Enter Oracle Integrity Staking—an innovation to Pyth Price Feeds that introduces enhanced data source accountability and creates a more secure DeFi ecosystem through decentralized staking rewards and slashing mechanisms for network participants.

• Pyth Publishers (data providers) will programmatically earn rewards from the Pyth protocol for maintaining high-fidelity data contributions to the price oracle. If they deliver faulty data that negatively impacts protocols, their stake will be slashed. The Pyth DAO can vote on what to do with this slashed amount, such as distributing it to impacted parties or using the slashed amount for another purpose.

PYTH stakers can delegate their stakes to Pyth publishers to enhance those publisher’s potential rewards for providing high quality data. This contribution strengthens the resilience and security of Pyth Price Feeds; in return, PYTH stakers are programmatically rewarded for helping secure the oracle network and protect DeFi.

Oracle Integrity Staking covers all 500+ Pyth Price Feeds, setting a higher standard for oracle technology and the way market participants can participate in the DeFi ecosystem. This launch marks a significant milestone in Pyth Network’s mission to deliver reliable, accurate price data to all blockchains while addressing the growing demands of decentralization and sustainability.

This blog post will explore how Oracle Integrity Staking empowers developers to build fearlessly thanks to increased data accountability and price feed security.

What Oracle Integrity Staking Unlocks for Builders

The most pressing challenges in the oracle space center around the trustless delivery of high-quality, reliable price data across all of the assets and blockchains required by developers.

Currently, the data infrastructure available to developers does not provide thorough accountability measures to ensure data quality. Legacy oracles that do feature on-chain incentives for quality control only offer this for a select few markets which are already safe.

Scaling asset coverage also remains a complex challenge for push oracles. While the Pyth pull oracle has established a new paradigm for how to scale price feeds to new chains rapidly, applications using Pyth still stand to benefit from access to new, trending, or strategic yet unpopular assets.

Oracle Integrity Staking directly addresses data quality and scalability by holding Pyth publishers economically accountable for price accuracy and asset coverage.

Price Accuracy

Publishers must stake PYTH tokens to become eligible for on-chain rewards, and will programmatically receive rewards only for contributing high fidelity price data.

Conversely, if a publisher provides faulty or malicious data, a portion of that publisher’s stake will be slashed as a penalty. Additionally, the Pyth DAO can vote on what to do with the slashed amount, including delivering some or all of it to those affected by the misprint or using the amount to support Pyth Network in other ways.

For developers, these outcomes means greater confidence in the data they rely on, enabling them to build fearlessly without concern over data integrity and security. These assurances are in addition to Pyth Price Feed’s existing reliability practices, including on-chain aggregation to remove outlier data contributions and conformance testing of newly launched feeds.

Asset Coverage

Oracle Integrity Staking also enables publishers to increase their potential rewards by increasing the number of symbols (price feeds) they support. Furthermore, potential rewards will increase if the publisher begins publishing data for less popular symbols, rather than liquid or popular pairs that many other publishers already support.

This incentive mechanism positions Pyth to become the go-to oracle for smart contract developers building across a wide range of applications; no matter where a team chooses to build, or what asset types they need data for, Pyth Price Feeds can expand to cover these needs.

Protect the DeFi You Know and Love

The Pyth community also plays a critical role in Oracle Integrity Staking, as now PYTH stakers can get programmatically rewarded for contributing to the security of the oracle network. By delegating stake to a Pyth publisher, stakers reinforce the resilience and accuracy of Pyth Price Feeds by enhancing the potential rewards for that selected publisher. The staking rewards mechanism delivers rewards first to publishers based on data quality, and then to stakers for their contribution to the network.

This mechanism gives stakers a unique lever to guide publishers to support more symbols and asset types, in addition to maintaining high standards for price data. It is important to note that Oracle Integrity Staking’s reward and slashing mechanisms affects both publishers and their supporting stakers. Publishers are accountable for the data they provide to the oracle, while stakers help strengthen the oracle by choosing which publishers to support.

How Oracle Integrity Staking Works

Oracle Integrity Staking allows anyone to help secure Pyth and protect the DeFi ecosystem. The program introduces decentralized staking rewards and slashing mechanisms to incentivize publishers and PYTH holders to stake tokens to reinforce the integrity of the oracle.

The Staking Rewards and Slashing Process

At the heart of Oracle Integrity Staking are stake pools, with each one corresponding to a different publisher. Each participating publisher can stake PYTH tokens to themselves to become eligible for performance rewards for their published data. PYTH stakers—members of the Pyth community—select the publisher(s) they wish to support and can stake PYTH tokens to any publisher’s pool to help secure the oracle.

The total amount of rewards a stake pool generates is determined by the total number of tokens staked in the pool (by both the publisher and stakers). The reward amount increases with the size of the total stake, up to a limit called the stake cap. Publishers can raise their stake cap by supporting more symbols. In turn, stakers can incentivize publishers to support more symbols by choosing to stake with publishers that support symbols that are important to the ecosystem. Rewards are programmatically distributed between publishers and stakers, with rewards first going to publishers, and remaining rewards going to stakers.

The Pyth DAO sets a maximum annual reward rate for stake pools to balance between sustainability and meaningful participation. This rate is currently 10%, and can be adjusted by the Pyth DAO. The maximum reward rate is achieved when the total stake in the pool is below the stake cap. However the total amount of rewards can never exceed the maximum reward rate times the stake cap; this means that if the stake cap is exceeded, stakers will receive a lower reward rate. This arrangement incentivizes stakers to evaluate the full list of publishers in the network when deciding on who to stake towards to help secure the oracle. Learn more about how rewards are calculated in the documentation.

In summary, Oracle Integrity Staking rewards for strengthening oracle integrity are determined by several key factors—which can be adjusted by the Pyth DAO:

• Stake Cap: This is the maximum amount of tokens that can be staked with a publisher (by the publisher themselves and additional stakers) that can be eligible for rewards. A higher stake cap allows a publisher to attract more stakers and increase the pool’s notional reward.
• Number of Symbols Supported by a Publisher: Publishers can support more symbols to increase their stake cap for higher potential rewards. These additional rewards compensate for the increased risk of slashing from covering more symbols.
• Maximum Reward Rate: The DAO sets a cap on the maximum reward rate, calculated as an annual percentage yield (APY), that can be earned in a stake pool. While a higher maximum reward rate can increase the overall yield potential for participants, the DAO should carefully manage this parameter to maintain the balance between incentivizing participation and ensuring the long-term sustainability of Oracle Integrity Staking and Pyth Network.
• Delegation Fee: Publishers charge a fixed percentage (currently 20%) of the rewards from stakers in their stake pool as a delegation fee, net of any slashed amount. The DAO can vote to adjust this fee amount and structure.
• Slashing: In the event that data from a set of publishers fails to meet standards, both the publisher(s) and stakers supporting them can face slashing penalties. This shared responsibility model encourages careful evaluation of publishers, promoting a culture of accountability throughout the network. Currently, the slashing mechanism is capped at 5% of the total stake, and this rate can be adjusted by the Pyth DAO. The DAO can also vote on how to use any slashed amounts, including whether the slashed tokens will be delivered to those impacted by the error or used to support Pyth Network in another way.

How Stakers Can Get Involved

PYTH stakers play a crucial role in Oracle Integrity Staking by staking their tokens to publishers to strengthen the oracle’s security and data integrity.

To get started, anyone holding unlocked PYTH tokens can access an interface like the Pyth Staking Dashboard and navigate to the Oracle Integrity Staking program. Eligible participants* can begin exploring the list of publishers and selecting which ones to stake towards in order to help secure the oracle.

Stakers can sort and evaluate the list of publishers based on pool composition, publisher quality rankings, the number of price feeds the publisher supports, or whatever criteria is most important to them. When ready, stakers can stake to any publisher stake pool. These tokens enter a Warmup Period before they become officially staked and actively help secure the oracle. Stakers can then manage their stake allocations across the publishers depending on their preference and strategy for maintaining the oracle network’s integrity.

PYTH holders who have previously staked their tokens to Pyth Governance will see these same tokens in the Oracle Integrity Staking program, and can start staking them directly to publishers without withdrawing first to their wallets.

Finally, participants can stake the same tokens to both the Oracle Integrity Staking program and the Pyth Governance program to simultaneously secure the oracle and obtain voting power for Pyth Improvement Proposals. Participants can also choose to stake only to Pyth Governance and not Oracle Integrity Staking.

The Role of the Pyth DAO

The Pyth DAO determines the parameters that govern Oracle Integrity Staking, such as stake caps inputs, delegation fees, slashing amounts, and more. These parameters ensure incentives align with maintaining high data standards. Current parameters settings can be found in the documentation.

The Pyth DAO is also responsible for overseeing critical updates to the staking and slashing mechanisms, such as deciding the source of rewards for publishers and stakers. To bootstrap this initiative, Pyth Data Association has allocated 100M unlocked tokens. The Pyth DAO can vote on additional reward sources, such as on-chain revenue generated by the Pyth oracle

The Pyth DAO can also vote on how to handle any slashed amounts from faulty publishers. While slashed tokens programmatically return to the DAO treasury, the Pyth DAO can vote, for example, to deliver slashed amounts to any parties affected by a misprint or use the funds for any other purpose permitted by the DAO’s governance.

Additionally, the DAO can change the reward structure, such as incorporating other digital assets in the reward set to allow for broader staking participation to further enhance the oracle’s security and reach.

Through these responsibilities, the Pyth DAO empowers the community to shape the future of Oracle Integrity Staking, ensuring the ongoing resilience and scalability of the Pyth Network.

Price Feeds V3 and Beyond

In decentralized finance, the reliability and accuracy of oracle feeds are paramount. As more value flows through blockchain ecosystems, the risks of inaccurate or manipulated data grow.

While Pyth Price Feed’s current reliability practices have been critical for upholding today’s DeFi, the ever-evolving DeFi landscape necessitates more advanced security mechanisms. Cryptoeconomic security was the logical next step for Price Feeds.

Pyth Network first launched on Solana with Price Feeds V1, pioneering high-frequency on-chain data from first-party sources. Leveraging Solana's speed, Pyth set a new standard for reliable data delivery. With Price Feeds V2, Pyth became the first pull oracle, expanding its reach across multiple blockchains in the EVM, Move, Cosmos, and Bitcoin ecosystems, giving developers access to high-fidelity, low-latency prices on any chain.

Oracle Integrity Staking unlocks Price Feeds V3—a significant advancement for Pyth Price Feeds that introduces enhanced data source accountability to every feed. The key component of Price Feeds V3 is the establishment of Oracle Integrity Staking to empower Web3 developers to build fearlessly without worrying about inaccurate or malicious data.

Oracle Integrity Staking introduces a new paradigm in the oracle space—one that actively prioritizes data source accountability and protection across the entire oracle’s data feeds offering, setting a higher industry standard for price oracles.

To date, Pyth Network is the only data infrastructure solution offering this level of data accountability and security across every one of its live feeds, from its most commonly used price feeds to low liquidity, long-tailed assets. Oracle Integrity Staking ensures that every price feed is secure, every user is protected, and every publisher is accountable.

Pyth Network is redefining the future of DeFi. Join us on this transformative journey and be a part of shaping history, no matter which ecosystem you hail from or how you choose to contribute.

We want to hear your feedback. Join the Pyth Discord and Telegram, and follow Pyth on X and LinkedIn. You can also learn more about Pyth here.

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