Pyth Network: Pull, Not Push

Pyth Network is a low latency pull-based oracle network that provides a variety of price feeds for dApps to utilize. The protocol recently launched its new whitepaper, which includes an outline of its unlaunched token’s tokenomics. Pythnet, the underlying appchain that powers Pyth Network, is a fork of Solana run as a proof-of-authority chain.

Architecture

There are two main stakeholders within the protocol: publishers and consumers (of data). Publishers, also known as data providers, publish their price feeds and earn fees in return. Much like other oracle networks, publishers on Pyth comprise leading market-making firms such as Wintermute and Cumberland, CEXs like Binance and CBOE, companies that offer digital asset services such as Amber Group, and leading crypto data providers such as Kaiko. Today, Pyth has over 90 publishers.

Consumers, most often dApps built on various blockchains, utilize that data by incorporating it into their smart contracts. These dApps pay fees to the protocol whenever they update a price feed onchain and subsequently use that updated price within their dApp.

Pyth Network

Given the proliferation of blockchains across various ecosystems including Ethereum-based rollups, alt L1s, and more, an oracle solution should ideally be able to plug and play into an unlimited number of new networks in a scalable manner. Pyth’s solution to this is Pythnet, a proof-of–staked-authority chain, with a consensus model and runtime based on Solana. Unlike a proof-of-stake chain, a proof-of-staked-authority chain means that validators are picked by a certain entity; for example, Pyth itself or PYTH token holders through governance. As such, becoming a validator is a permissioned process. Specifically, only publishers are allowed to become validators.

Each block at the time of publishing this report, has a duration of 400ms Publishers submit a price update for their supported feeds in the form of a price and a confidence interval to the onchain price account. Given that Pythnet is a chain with a permissioned set of publishers, with the sole purpose of aggregating price feeds from different publishers, these publishers don’t expect any block rewards. As such, there is no need for transaction fees, and publishers are able to publish their price updates for free.