Binance Announced it'll List Pyth network With Seed Tag. $PYTH is a serious Competitor of Chainlink ($LINK ) in DePin Sector. It is Faster than Any Competitor by a mile. Let's check out the latest kid in the Block.
✴️ What Is Pyth Network?
Pyth Network is an oracle that publishes financial market data to multiple blockchains. Various exchanges and market making firms contribute to their available market data. The oracle continuously aggregates publishes prices to provide accurate price feeds for a number of different asset types such as US equities, commodities, and cryptocurrencies.
🔅 How it Works?
Sure, let’s dive deeper into how the Pyth Network operates ....
The Pyth Network is a decentralized protocol that democratizes access to high-quality financial data within blockchain environments. Traditionally, critical financial information was largely accessible only to institutional entities such as banks and hedge funds. Pyth Network challenges this paradigm by making such data available to a broader audience, including individual users, developers, and decentralized finance (DeFi) applications.
The core application of Pyth Network lies in providing real-time, accurate financial data to blockchain-based DeFi applications, thereby enhancing their functionality and reliability. Its utility spans a broad range of financial applications:
Lending Protocols: Pyth’s data, including real-time price feeds of assets like Tesla stock, is vital for lending platforms. It enables effective management of loans collateralized by specific asset tokens.
Decentralized Exchanges: The network’s price feeds, such as the ETH/USD exchange rate, are essential for decentralized exchanges. They rely on this data for accurate trade valuation and market stability.
Risk Management and Derivatives: Pyth’s data feeds are key in calculating risk metrics and valuing complex financial products. This includes futures and options in the decentralized finance space.
Portfolio Management Tools: Investment tools and portfolio trackers leverage Pyth’s data for real-time asset valuation and performance analysis.
Pyth Network operates through a synergistic collaboration of various participants who regularly publish price updates on-chain. The network’s operation is underpinned by several key components and processes:
Publishers: Entities like crypto exchanges and trading firms that supply frequent price updates for various financial assets. For example, an exchange might publish BTC/USD prices, while a trading firm could provide Tesla’s stock price.
Aggregation Algorithm: Pyth Network uses a sophisticated weighted median algorithm for data aggregation. This method calculates a median of the prices, giving more weight to publishers known for accuracy and higher staking amounts. This approach guards against manipulation, ensuring data integrity and reliability.
Think of Pyth Network as a global news agency in the world of finance. Just like a news agency collects information from reporters all over the world, Pyth collects financial data from various publishers. These publishers are like the reporters who are experts in their field and provide the most accurate and up-to-date information.
Once the data is collected, it’s not just blindly relayed. There’s an editorial process, much like in a news agency. This is the aggregation algorithm, which checks the data for accuracy and reliability, giving more importance to the most trusted sources.
Finally, just like a news agency distributes the news to various newspapers and channels, Pyth Network makes this financial data available to various DeFi applications. These applications then use this data to provide various services to their users, just like newspapers provide news to their readers.
⚡ How Fast it is Compared to Chainlink?
ChainLink updates price feed data after a few minutes, for BTC/USD it's 10-60 minutes, while Pyth updates data in real time.
🔅 Future Of Pyth Network
Pyth Network indeed a great project. Many Blockchain Projects are using it. It now serves over 300 decentralized applications (dApps) across fifty blockchains.
Some of the long-time ecosystem partners of Pyth Network include Synthetix, Injective, Movement Labs, Vela Exchange, SynFutures, Composability Labs, Matter Labs, HMX, Backpack, Helius, Gelato Network, and many more.
© This composition is not endorsed by any entity; the names mentioned are solely for informational purposes. By stating this, we absolve ourselves of any liability for losses incurred if you invest in this project after perusing our article. This article should be regarded as a source of information, not financial counsel. Please note that this disclaimer is intended to protect both the reader and the author.
⚡ More Alpha, Join Us, Follow Us, Share Us ⚡ @Techandtips123