Exploring Pyth: Supported Asset Classes

In the vast landscape of financial markets, market participants have access to a wide variety of asset classes, each with distinct characteristics.

Traditional financial institutions predominantly offer trading and exposure to assets such as foreign currencies, equities, exchange-traded funds (ETFs), futures, options, and derivatives. The decentralized finance (DeFi) markets share similarities with these instruments but with unique variations: cryptocurrencies, stablecoins, non-fungible tokens (NFTs), perpetual futures, synthetics, and more.

However, there is a significant gap between the offerings of the traditional markets and what is available in decentralized markets. This is true for both individual investors as well as developers building in the Web3 capital markets.

Smart contracts require oracle infrastructure to access financial data and events from the crypto and traditional markets. But many oracle solutions serve mostly cryptocurrencies and digital assets data—sometimes exclusively. This lack of offerings restricts smart contract developers from offering important markets to DeFi users. It is challenging to acquire and consolidate the data needed to support other non-crypto asset classes.

Enter the Pyth Network, a financial oracle designed to seamlessly source data for both traditional and decentralized assets. This capability gives DeFi builders more options in what they can build on-chain, thereby unlocking a new world of trading possibilities for DeFi participants.

Supporting the Assets that Developers Need

To date, Pyth offers over 400 real-time price feeds across these assets across more than 50 blockchains across EVM, Cosmos, Move, and Rust-based chains such as Solana. Pyth Price Feeds update once every 400 milliseconds—more than 200,000 times a day—meaning DeFi applications can get the freshest, most up-to-date price from Pyth. Finally, integration with these price feeds is permissionless. Developers do not need to contact a sales team or sign a paper contract to start building with Pyth Data.

The Pyth Network currently supports five major asset classes for smart contract developers to integrate with when building Web3 applications.

Cryptocurrencies

Cryptocurrency or “crypto” is a form of virtual or digital form of currency that relies on cryptography for security and operates within a blockchain network. Cryptocurrencies serve various uses, including digital payments, acting as a store-of-value, and facilitating unique functionalities within decentralized applications.

Cryptocurrencies exist in two primary forms: coins and tokens. A coin is a native digital current that operates on its own blockchain. Examples include Bitcoin (BTC) and Litecoin (LTC), which function on their own independent networks. On the other hand, tokens are digital assets created through smart contracts on existing blockchains. Tokens are built according to standards like Ethereum’s ERC-20, BNB Chain’s BEP-20, or Solana’s SPL.

Despite being a relatively recent innovation, cryptocurrencies present a significant opportunity for global market participants due to their accessibility without the constraints of centralized institutions.

The Pyth oracle offers low-latency price feeds for coins such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Cardano (ADA), and Solana (SOL). The Pyth catalog also covers tokens such as Uniswap (UNI), Aave (AAVE), Tether (USDT), and USD Coin (USDC).

Forex (Foreign Exchange)

Forex, short for “foreign exchange”, refers to the global marketplace for exchanging national currencies. This asset class encompasses spot and derivatives for foreign currencies as the underlying including futures, options, forwards, and currency swaps.

Exposure to forex markets allows investors to hedge against international currency and interest rate risks, as well as capitalize on fluctuations in exchange rates. The forex markets are known for their immense size and liquidity: average daily trading volumes exceed $6T and dwarves other major financial markets.

The Pyth Price Feeds cover the G7 (”Group of Seven”) currencies (CAD, EUR, JPY, GBP, USD), emerging market currencies (e.g. BRL, ZAR, MXN), and commodity currencies (e.g. AUD, NZD), safe haven currencies (JPY, CHF), and more.

Equities

Equity represents ownership in a corporation or organization, constituting investments made into a company on the stock market, whether through private placements or secondary market transactions.

Equities are pivotal assets for investors, as they typically offer the potential for capital gains and dividends. Capital gains arise when the market value of the equity increases over time, providing an opportunity for profit upon sale. Dividends, on the other hand, are periodic payments made by companies to their shareholders, often derived from the company's profits.

Individual and institutional investors strategically allocate funds to equities within their portfolios, aiming to capitalize on the growth potential of companies and benefit from a share in their financial success.

Pyth is the only oracle that offers real-time access to US equities like Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN).

ETFs (Exchange-Traded Funds)

Exchange-traded funds or ETFs represent diversified portfolios of securities that are traded on global stock exchanges through brokerage firms. The global ETF market caters to various investment themes, sectors, geographies, and asset classes.

While these assets are often compared to mutual funds, there is an important distinction: mutual funds are typically transacted at the end of the trading day at the net asset value (NAV), while ETFs can be bought or sold throughout the trading day at market prices.

ETFs have gained widespread recognition and are acknowledged as one of the most versatile asset classes. Their uniqueness lies in the ability to offer expanded exposure and flexibility within investment strategies.

Pyth is also the only oracle that offers real-time access to well-known ETFs such as the SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust Series 1 (QQQ).

Commodities

In finance, commodities refer to standardized, fungible assets designated for trading and clearing. These assets, which can include physical goods like agricultural products, energy resources, and metals, are bought and sold in standardized contracts on various exchanges.

Commodities fall into two main categories: hard commodities like energy and metals, and soft commodities encompassing various agricultural goods.

Hard commodities, such as crude oil and precious metals like gold, play a pivotal role in shaping global economic landscapes. Energy resources fuel various sectors, while metals contribute to industrial processes and investment portfolios alike.

Soft commodities encompass a spectrum of agricultural products, including staples like wheat, corn, and cotton. These goods are integral not only to global food supplies but also serve as commodities subject to market dynamics.

Commodities offer a hedge against inflation, independent movement from equities, and act as safe havens, as exemplified by gold during turbulent financial times.

Pyth supports commodities such as gold (XAU) and silver (XAG). The community can collectively decide through governance to list new commodities through the Pyth oracle.

Get Started

Unlocking new real-world and digital assets for smart contract developers is paramount for the growth of the decentralized finance industry.

Stay tuned on the official Pyth Network social channels to learn about new data feeds when they launch.

You can also explore the full catalog of Pyth Price Feeds here and even discover which assets are in the pipeline. Integration is seamless and easy. Check out the developer documentation learn more.

We can’t wait to hear what you think! You can join the Pyth Discord and Telegram, and follow us on X and LinkedIn.