Rumors surrounding this week’s token launch by Pyth Network, a blockchain oracle company that competes with Chainlink, have shed light on a long-simmering battle between companies to run the infrastructure of the nascent asset industry. digital to the demands of traditional finance.
JPMorgan and Visa stand out as the latest “TradFi” companies to integrate “decentralized ledger” technology and other cryptographic concepts into their systems.
Oracle services like Chainlink (LINK) have played a key role in spearheading this merger between old and new, allowing blockchains to extract information (mostly prices) from crypto exchanges and other data sources. from the real world.
But for the marriage of centralized and decentralized finance to thrive, crypto infrastructure must be up to the task, meaning traders need access to the kind of minute-by-minute market data they’ve become accustomed to in a world of transcontinental cables and high frequency price feeds.
That’s where Pyth comes in. Like Chainlink, Pyth is an oracle service, a platform that feeds data to blockchains. But Pyth’s market-focused “real-time data” feeds are significantly faster than Chainlink’s, something that is supposed to better tailor the service to certain financial use cases.
Originally on the Solana blockchain
Originally built on the speed-focused Solana (SOL) blockchain and later expanded to become Pythnet, its own Solana-like blockchain, the project claims on its website that it updates its data feeds at intervals of 300 to 400 milliseconds. . Chainlink’s update frequency, on the other hand, can range from minutes to hours.
Chainlink’s comparatively slow pace comes down to how it obtains data, relying on “decentralized” consortiums of third-party data providers and a network of node operators to report information. Chainlink prices update at set intervals or dynamically in response to market volatility (things could speed up soon with new latency-focused updates).
Pyth, on the other hand, sources data directly from first-party financial institutions, both traditional and crypto-centric, such as Jane Street and Binance. While this institution-driven system smacks of “centralization” (an anathema to the disintermediate world of cryptocurrencies), it brings drastic improvements in speed, several orders of magnitude faster than competing services, supposedly in the name of satisfying the demands of modern finance.
According to the Pyth documentation, the Pythnet network also aggregates its price measurements from multiple sources. Pyth, on his website, claims to rely on various game theories and cryptography practices to ensure his numbers are reported accurately.
For example, the “bridge” service that Pyth uses to transmit data to blockchains, Wormhole, automatically runs certain checks before reporting numbers to blockchains. While these validation services can help protect Pyth numbers from tampering, the system can still be at risk of measurement errors if multiple sources report inaccurate numbers.
PYTH airdrop
Pyth kicked off the long-awaited airdrop of its PYTH token this week. The new cryptocurrency will function as votes in the protocol’s governance system, meaning that users who want to have a say in how Pyth’s technology evolves can “stake” the tokens.
The token, whose supply will be distributed, in part, to around 90,000 crypto wallets that have previously interacted with the protocol, is currently trading at $0.33, down from a high of $0.51.
In addition to driving the market for a new token, airdrops are frequently used by protocols as a tactic to attract attention and attract users.
Pyth Network currently ranks as the fourth-largest Oracle project, with $1.5 billion in total value insured (TVS), according to DefiLlama. Chainlink has a TVS of $14.7 billion, followed by WINkLink with $7.74 billion and No. 3 Chronicle with $6.72 billion.
But in terms of networks served, Pyth comes in second with 120, just behind Chainlink’s 361.
