Rethinking Oracle Comparisons: Shifting from TVS to TTV for Deeper Industry Insight

For years, blockchain oracles have been measured and compared according to Total Value Secured (TVS), a metric that ties an oracle’s success to the value of assets it helps secure on-chain. However, while TVS has shaped how oracles are perceived, this metric only captures part of the picture.

As decentralized finance (DeFi) evolves, Total Transaction Volume (TTV) has emerged as a more insightful way to measure an oracle's impact. TTV offers a clearer view of the value oracles bring to blockchain ecosystems and their potential to generate sustainable on-chain revenue.

Shifting the industry’s focus from TVS to TTV is essential for three reasons: first, this change in perspective will lead to a deeper comprehension of the role that oracles play in the DeFi landscape; second, this metric highlights the opportunities and innovations that are yet to be unlocked in the oracle space; and third, this shift in thinking about DeFi activity is key to preparing the next growth stages for the industry and pushing us closer to mass adoption.

Understanding TVS: One Measure of Success

In the early days of DeFi—also known as DeFi 1.0—the primary focus for oracles was solving issues related to security and trust. During this period, TVS emerged as a key metric for assessing oracle adoption, usage, and market share.

TVS measures the total value of assets locked or secured by an oracle, signaling how much trust is placed in the oracle’s data feeds. This metric made sense when securing value was the paramount concern, and TVS was seen as a reflection of an oracle’s security and reliability. DeFi 1.0 chains were slower, with longer block times, making the protection of value a top priority.

However, DeFi is graduating into its next era, DeFi 2.0. The focus has shifted from security to speed and efficiency as demand for high-throughput trading has become the norm. With the rise of decentralized perpetual futures and on-chain derivatives, transaction volume, rather than asset value, is a better indicator of on-chain activity. So while TVS might still be useful for assessing worst-case security risks, it is not pertinent to true demand for oracle services today.

Evaluating oracles by TVS can also be problematic since this method conflates value with activity. While TVS measures the size of the asset pool secured by an oracle, it does not account for the actual activity or transaction volume that the oracle supports. For example, a high TVS does not necessarily mean an oracle is facilitating many transactions or driving high levels of activity—it could simply mean that large amounts of value are locked up in a protocol without frequent movement.

Furthermore, oracles are typically not compensated based on the value of the assets they secure; the typical model is that an oracle generates revenue through the number of oracle calls it processes. Whether a user transaction involves 1 BTC or 1 million BTC, the oracle's function remains the same: to provide accurate, timely data to facilitate that transaction. TVS can overstate the significance of large asset pools and understate trading volumes or the raw number of transactions an oracle supports. Given the high-frequency nature of today’s DeFi landscape, key metrics for analyzing oracle usage and sustainability should focus less on how much value is secured and instead underscore how much volume the oracle processes.

As Blockworks highlights in a recent report on oracle performance analysis, TVS "overstat[es] the importance of asset pool size, and greatly understat[es] oracle activity. This deficiency is visible in TVS across and within sectors, all of which obscure the market’s understanding of oracle demand and market share.”

Introducing TTV: A New Way of Analyzing Oracle Potential

While TVS has historically been used to gauge success, this metric does not capture the most important growth drivers of DeFi today—transaction activity and volumes. In the DeFi 2.0 landscape, where speed and transaction frequency are paramount, Total Transacted Volume (TTV) provides a more accurate measure of an oracle's usage, adoption, and market share.

Next-gen blockchains such as Arbitrum, Sui, Solana, and many others specialize in high-speed transactions, meaning developers require access to high speed oracles. To measure the adoption of high-frequency oracles, analysts need to focus on transaction and trading activity facilitated by oracle providers for any ecosystem, as oracle calls or price updates correlate directly with their usage by high-frequency applications such as perpetuals.

Take decentralized exchanges (DEXs) as an example. Many of today’s leading DEXs rely on oracles to enable user transactions. One way to gauge a blockchain ecosystem's market share is by comparing the volume of transactions an oracle facilitates within that ecosystem to the total oracle-powered volume. The share of this volume gives a rough proxy of the oracle's market share within the ecosystem. TVS, while better suited for measuring oracle activity for borrow-lending, would not capture the majority of DEX activity such as perpetual trading.

Transaction volume is a key indicator of both oracle activity and revenue potential. With the rise of next-generation pull oracles designed to support high-speed applications by delivering price data on demand, a new revenue model has emerged. This model introduces fees for each oracle price update requested by downstream applications, aligning revenue more closely with transaction activity. To assess an oracle’s on-chain revenue potential, analysts can look at the number of paid transactions it facilitates—an activity metric that correlates with the volume of value secured.

Higher transaction volumes do not only drive network growth—they also create the demand needed for scaling decentralized applications. Recognizing this shift in how oracles generate value will be key to unlocking the next growth opportunities and advancing DeFi’s global adoption.

Pyth Network: Leading the Charge in TTV

As the shift from Total Value Secured (TVS) to Total Transaction Volume (TTV) redefines the role of oracles, Pyth Network has already positioned itself as a leader in this space. Pyth's dominance is evident in its ability to facilitate massive transaction volumes, especially in the high-demand derivatives market. Today, 60% of derivatives protocols now rely on Pyth Price Feeds, demonstrating the network's essential role in processing high-frequency, high-value transactions across DeFi.

In July 2024, Pyth powered over $100 billion in derivatives transactions, surpassing major players like Coinbase and outperforming all other oracle solutions combined. This milestone highlights the rapid adoption of Pyth Price Feeds, driven in part by its innovative pull oracle design, which scales across multiple price feeds and blockchains to serve large user bases. TVS would not have capture this surge in activity, and the spike in Pyth Price Feeds usage would remain unseen without looking at transaction volume.

"In recent years, DeFi has undergone significant changes, with users seeking faster and more transaction-intensive on-chain experiences,” says Rachel Lin, cofounder and CEO of SynFutures. “SynFutures uses Pyth's oracles to meet this demand and provide popular perpetual markets through our permissionless listings feature. Thanks to Pyth's low-latency price feeds, SynFutures has consistently been the leading perpetual DEX in terms of volume among those powered by Pyth."

"From $0 to $45.68 billion in trading volume, Pyth has been right by our side from day one. Its forward-thinking, pull-based oracle architecture, delivering sub-second price updates, has been key to our success, notes Shu Tsy, Core Contributor at HMX. “Pyth isn’t just a part of our protocol—it’s the backbone. Without it, providing such a seamless trading experience to our users would have been unimaginable. The TTV speaks for itself: Pyth is here, and it’s leading the way!”

A New Era for Oracles and DeFi

As DeFi expands, it is becoming clear that measuring oracles by Total Value Secured no longer captures their full impact. Shifting the focus to Total Transaction Volume offers a better understanding of an oracles' true influence within the blockchain space. TTV not only reveals an oracle’s real revenue potential and protocol usage, but also highlights the market’s demand for high performance that was not serviced by incumbents.

“For DEXs to compete with CEXs on market share,” Blockworks notes, “Oracles will need to compete on offering blazing fast price feeds so that DEXs can compete with CEXs with single servers and high performance matching engines. When we look at the DEX landscape today, none have reached CEX scale, but clear leaders are emerging.”

"The DeFi space has evolved considerably in the last several years, adds Chris, Core Contributor at Drift. “Users demand faster, more transaction-heavy experiences on-chain, which is why oracles like Pyth that specialize in speed have emerged. Drift leverages Pyth’s oracles to offer the most in-demand perpetual markets. Over the past 24 hours, Drift recorded $156M in perpetuals volume, thanks to Pyth’s low-latency price feeds powering our markets.”

Pyth Network, with its dominance in transaction volume and extensive use among derivatives protocols, is at the forefront of this shift. The future of oracles is not just about securing value—it is about processing vast transaction volumes to power decentralized ecosystems. The move from TVS to TTV will reshape our view of oracles and reveal which new opportunities developers, investors, and the wider DeFi community can support next.

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