2023 was the year Pyth Network finally reached the starting line.
The timing couldn’t be better. Data is becoming more valuable, but also less freely available. The open internet is shrinking, and public data sets are losing foot traffic to emergent, extractive services such as LLMs. Data that was once openly accessible is now moving behind paywalls.
For the DeFi industry in particular, this trend means that legacy reporter oracles which fetch financial data from public resources have increasingly fewer sources to fetch from each year. A new solution is needed. Enter Pyth Network, a data oracle designed on the first principle of preserving and incentivizing data ownership.
The Pyth Network is a universal data primitive built for the enrichment of smart contact applications on every blockchain. Pyth is fundamentally different than legacy oracles in how it sources and delivers financial data. Instead of extracting data off-chain for delivery to blockchains, the Pyth Network incentivizes creators and owners of valuable market data to directly contribute that data for on-chain applications. This design positions Pyth as the source of truth for financial data at time t(0), or inception. The world’s data is set to flow to the on-chain world through the Pyth oracle.
Since April 2021, the Pyth contributors have been bootstrapping the network to achieve this goal. This early bootstrapping phase included welcoming new data providers, deploying the first batch of DeFi’s first real-time oracle feeds, and finally, deploying a scalable cross-chain pull oracle to power applications across the EVM, Move, and Cosmos ecosystems.
These efforts produced a positive feedback loop between owners of proprietary financial data and on-chain users of this data. Unlocking new markets to DeFi applications attracts more users and volume, which in turn incentivizes more data owners to join the Pyth Network and contribute their prices.
In the final quarter of 2023, the Pyth Network launched its permissionless mainnet. Going forward, on-chain governance will guide the protocol’s development through token holder discussion and decision-making. Governance enables the community to guide the development of the Pyth protocol, from oracle fee structures to rewards distribution to data providers. Governance will be a major focus for the Pyth ecosystem for 2024 and beyond.
This blog post is a summary of Pyth’s accomplishments throughout 2023 and how they will shape the development and ecosystem initiatives of the new year. The themes throughout this article offer a comprehensive guide for the Pyth community in their collective mission towards building a decentralized, sustainable oracle securing the future of global on-chain services.
The State of the Oracle Network
2023 oversaw the launch of Pyth Network’s permissionless mainnet and token-led governance. This deployment means that the Pythian community now controls the Pyth protocol. The technological layer of Pyth Governance is live: on-chain proposals can be passed with attached executable code to shape the network’s development. Pyth Governance is expected to help determine features such as:
- The size of oracle update fees.
- The reward distribution mechanism for data providers.
- Software updates to the Pyth on-chain programs on any blockchain.
- Which price feeds are listed on Pyth and their reference data.
- Which data providers are permissioned to contribute data for each feed.
The Pythian community will soon see the deployment of Pyth Governance’s social layer—the social protocol by which proposals are discussed, submitted on-chain, and voted on.
On January 9, 2024, a first draft of the Pyth DAO Constitution—a document defining the social layer by which Pyth Governance will operate—was publicly released for community feedback. Discussions are managed in the official Discord server.
The Largest Cross-Chain Airdrop in History
November oversaw the successful launch of the Pyth Network Retrospective Airdrop, which set a record for the most expansive cross-chain airdrop to date.
This initiative spanned over 90K eligible wallets and 200 dApps across 27 blockchains across the EVM, Rust, Cosmos, and Move worlds. The Pyth contributors are united by a vision for decentralized finance and the wider Web3 landscape: to power a seamless cross-chain experience that simplifies the complexities and fragmentation associated with the current blockchain industry.
Data-Driven 2023
On December 5, Pyth contributors ran a two-day online conference gathering the Pyth oracle ecosystem, thought leaders, and dApp builders. The theme of this year’s Data-Driven conference focused on the Web3 capital markets and what it will take to secure the world’s financial data on-chain to power a new era of high-throughput DeFi.
Mike Cahill and Jayant Krishnamurthy from Douro Labs kicked off the show with keynotes on the Pyth Network’s journey, product line, and on-chain governance.
Long-time ecosystem partners—including Synthetix, Injective, Movement Labs, Vela Exchange, SynFutures, Composability Labs, Matter Labs, HMX, Backpack, Helius, Gelato Network, and many more—presented their latest developments and newest roadmaps.
Conference-goers could catch exclusive panels with market leaders such as VanEck, OKX, Gate Ventures, Auros, LTP, Flowdesk, Kronos Research, Alphalab Capital, Selini Capital, and Solana Foundation. Some of the Pyth Network’s backers, including Multicoin Capital, Castle Island Ventures, Borderless Capital, Delphi Digital, Bodhi Ventures, and Wintermute, also presented an industry panel of their own.
Recordings of each presentation will be uploaded to a public playlist.
Pyth Entropy: A Disruptive, New Force
In his Data-Driven 2023 keynote, Jayant Krishnamurthy, CTO of Douro Labs, announced the launch of Pyth Entropy, a secure on-chain random number generation protocol.
On-chain randomness has been one of the most common requests for the Pyth Network, as this service can empower a wide range of Web3 use cases from NFTs to gaming.
Legacy oracle providers first introduced solutions based on VRF (verifiable random function) or secure enclaves. These solutions come with their complications at the cryptography or hardware layer.
Pyth Entropy transforms the landscape by adopting a different approach. Entropy uses a two-party commit-reveal protocol, a well-known protocol in the cryptography space for generating a random number. The advantages include low latencies and ease of integration. The Entropy solution is live today on several test networks.
Better Price Feeds
In Q4 2023, the Pyth contributors released a set of core system improvements to Pyth Price Feeds. These upgrades are based on user feedback and the growing demands of an oracle network serving an ever-growing number of DeFi ecosystems.
Pyth Price Feeds are Faster Than Ever.
The contributors have identified and removed several sources of latency in the oracle protocol. The result is 20% less latency across all Pythnet Price Feeds. Lower latency enables more granular price updates for more secure and accurate on-chain transactions.
Every Pyth Price Feed Supports up to 64 Data Providers.
Pyth Network is home to more than 90 data providers contributing data to different price feeds, depending on which assets they can support. Every Pyth Price Feed sources its data from multiple providers to ensure continuous uptime and an accurate output. Previously, a price feed could source data from a maximum of 32 data providers. In the scheme of oracles, this is already a significant threshold.
The data provider threshold per price feed has now been raised from 32 to 64. Raising this threshold greatly increases the reliability and security of Pyth Price Feeds. More providers further reinforces price feed liveness and the difficulty of collusion among ecosystem actors.
It’s Time for On-chain Market Hours.
One of the biggest advantages of Pyth Network over other oracles is that Pyth Price Feeds offer live access to traditional and real-world asset prices such as US equities.
In the TradFi or Web2 worlds, however, assets do not trade 24/7 like crypto. Traditional assets trade at specific market hours. There are hours when these assets are not active and there is no pricing. This idiosyncrasy of the traditional finance system has been a source of tension for users of Pyth’s traditional asset feeds. These developers had to build separate systems for tracking when external markets were online or offline.
Pyth Network now supports on-chain market hours for all price feeds. Smart contracts can now read on-chain when a price feed is supposed to be online and incorporate that logic, mitigating friction for builders looking to support real-world assets.
A Better Testnet for All.
In response to feedback from the developer community, Pyth testnet underwent additional upgrades. Mainnet Pyth Data is now available on all supported testnet environments. Smart contract developers can access the same price data for testing as they would find on mainnet. This improvement facilitates a smoother QA and stress-testing process for builders.
Better Benchmarks
Pyth Benchmarks allows users to query asset prices from specific dates and times. Benchmarks offer an important service for fetching standardized historical prices for digital and traditional assets—a service that is novel for Web3, though a foundational component of the global financial system.
The Pyth contributors have released two core improvements to Pyth Benchmarks:
Pyth, But Prettier: Charting Library Integration.
A new streamlined integration for Charting Library support for Pyth Benchmarks is now available. An Instagram-worthy glow-up with customized, multi-colored candle charts awaits users of Pyth Data.
Charting Library is a software library created by TradingView that makes it easy for developers to create custom-skinned or colored candle charts. The integration of Charting Library with Pyth Data was cumbersome in the past. This new integration abstracts away the initial complexities to just a few lines of code. Smart contract developers can tap into the Pyth Benchmarks API endpoints and visualize them with their brand aesthetics!
Provably Unique Price Updates.
Decentralized options vaults, structured products platforms, and perpetual futures protocols often integrate with Pyth Benchmarks for on-chain settlement and to prevent front- and back-running by backfilling prices to historical timestamps.
Pyth Benchmarks allows users to retrieve a provably unique price for any timestamp. A data user can more easily query the HTTP endpoint to obtain a signed price payload for a specified time. That signed price payload is provably the unique one for that time.
Every Pyth price payload spans an interval of a start timestamp and an end timestamp. That interval is within the signed price payload and partitions the timeline into non-overlapping segments.
Intervals in the signed price payload can be confirmed. This check proves that one has a unique price for that time.
Unique price payloads are designed to improve the building of on-chain settlement-type applications, which need this type of verification service.
Hermes’ Blessing, Made More Accessible
Hermes is a web service that packages the data generated on the Pythnet appchain with Wormhole signatures for easy consumption by downstream protocols.
While Hermes is a permissionless service that can be run by anyone, hosting this service is operationally challenging. The Pyth Data Association currently provides a public version of this service, but there is room for additional resilience.
Triton One and P2P are now offering their own hosted permissionless Hermes offerings. Access is a simple as doing so with an RPC node on your native blockchain.
Quick Highlights
Stats For Days, Stats For Years
The following KPI metrics are helpful for visualizing the Pyth ecosystem’s transformation throughout 2023. These key stats capture the network’s year-on-year growth, growth in market share, and current mind share.
Heeding the Pythia’s Call
Pyth introduces a significant architectural improvement over legacy oracles. Instead of running a Push Oracle and requiring subsidies for gas fees to continuously push price updates on-chain, Pyth operates a Pull Oracle design which empowers protocols to request or pull price updates only when needed.
The gas efficiency of this architecture means lower latency, higher-frequency, and higher resolution price data for DeFi users. These benefits give rise to more secure and precise DeFi operations. Additionally, the Pyth oracle can scale to accommodate any number of blockchains and new Pyth Price Feeds are immediately available on all supported chains.
Every time an application or ecosystem participant calls (pulls) a price update from Pyth, they pays a small fee to the Pyth protocol.*
Daily average updates refer to oracle price updates that are requested from Pythnet and brought cross-chain via Wormhole. December 2023 saw daily average updates (DAUs) peak at 4.0M paid-for updates. DAUs correspond directly with active DeFi usage, as protocols pull prices on-chain to settle transactions and value real-time trades.
The $100B Trading Volume Milestone
December was an especially active year in on-chain trading, as evidenced by a significant spike in trading volume secured by Pyth Data. December saw monthly secured volume spike to $22.7B, bringing the cumulative volume supported t $120B by year end.
Volume secured is most indicative of Pyth Price Feeds usage by perpetual futures protocols, given their prominence in the DeFi industry and rapid multi-chain proliferation throughout 2023.
Reinvigorated. Total Value Secured (TVS) Today
The Total Value Secured (TVS) metric, or oracle-secured Total Value Locked (TVL), underscores the past cycle of locked value waxing once again, this time in tandem with an explosion of adoption across new L1 and L2 blockchains.
We can use TVS as a rough proxy for market share for any chain since the metric is the oracle-powered subset of DeFi value for that blockchain. A closer look at the TVS across different chains highlights Pyth's dominance, especially in newer alternative chains in EVM and Cosmos focused on high-throughput financial activity.
By December, Pyth comprised more than 90% of the TVS for 10 blockchains including Injective, Osmosis, Aptos, Sui, Sei, and Stacks. Pyth represents more than half the market share for 16 chains, including zkSync, TON, and WEMIX.
Multi-Chain Means More Chains
The Pyth Network currently supports more than 45 blockchains. The aim is to bring the world’s financial data to wherever smart contract developers are building.
New Users: Welcome to Pyth
It is becoming increasingly difficult to use DeFi without interacting with Pyth Data. According to DefiLlama, one out of four dApps are #PoweredByPyth.
The dApp count graph below offers a conservative count of the number of applications integrated with Pyth Data. In the ethos of Web3, Pyth Price Feeds and Pyth Benchmarks are permissionless: integration can be done without speaking to the sales team or signing an agreement.
Past quarterly wrap-up blogs included a summary list of all new integration partners. For the sake of space, we are foregoing this tradition. You can find granular updates in the December Updates post.
New Price Feeds: Supplying What’s Demanded
One of the most powerful benefits of the Pyth Pull Oracle is the universal availability of any Pyth Price Feed on all supported chains.
For instance, a developer team on Arbitrum may want to expand their protocol to Base. On Base, that protocol can tap into the same set of Pyth Price Feeds to offer the same markets their users know and love. DeFi participants do not have to wait for new Pyth data feeds to deploy individually on their native chain. The rapid scalability enabled by Pyth Data paves the way for a more unified and multi-chain Web3 experience.
The network now supports over 400 price feeds across cryptocurrencies, foreign exchange pairs, metals, US equities, and exchange-traded funds. Later on, listing of new feeds will become a community-governed matter.
New Data Providers: Real Ownership in Web3
The Pyth Network would not be possible without the contributions of its community of institutional and decentralized data providers. These publishers are active participants in price discovery; whether they are liquidity venues or trading participant, their daily operations lead to the creation of valuable, timely, and granular price data.
More data providers means more price feed and asset class coverage by Pyth. More coverage means support for new markets on DeFi platforms, which encourages greater usage and demand for Pyth Data. This demand feeds back into the attractiveness of the Pyth Network as a decentralized marketplace for owners of proprietary price data. Discussion of on-chain reward flow is another important matter under the scope of Pyth Governance.
Final Remarks
2023 was the final proving grounds for the Pyth Network. In its mission to bring all valuable data on-chain, Pyth seeks to address the most common pain points for blockchain developers.
By specializing in first-party providers—original sources of data—the Pyth oracle provides high-resolution prices that track markets more accurately than competing solutions. Attributing to the Pull Oracle architecture, Pyth can support thousands of real-time asset feeds for smart contracts on any number of chains. Slow, inaccurate, and fragmented price feeds have made way for a high-frequency, high-fidelity, and universally accessible oracle solution.
While the Pyth Network’s goal remains unchanged this year, 2024 will be a chapter defined by community-led decision-making.
We can’t wait to hear what you think! Feel free to join the Pyth Discord and Telegram, and follow Pyth on X. You can also learn more here.
*Due to legacy development, Pyth prices are independently pushed to Solana mainnet-beta. Pull deployment on Solana is in development.
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