What Is Python Network (PYTH) and How Does It Work?

Pyth is an oracle network that bridges the gap between on-chain blockchains/protocols and off-chain data sources across the Web3/cryptocurrency ecosystem. Oracles serve as data conduits, providing a secure way for blockchains to access and incorporate real-world data.  

Pyth's flagship offering is its Price Feeds product, which aims to deliver near real-time pricing data for a wide range of assets including cryptocurrencies, commodities, and stocks. These price feeds enable decentralized applications (dApps) and protocols, such as lending platforms, to seamlessly integrate accurate pricing information crucial for their operations.

Pyth acts as a trustworthy oracle to relay high-quality, up-to-date price data quickly from off-chain sources to on-chain smart contracts and dApps that depend on this information to function. 

Pyth was founded to provide high-quality pricing data to decentralized finance (DeFi) markets. It was first announced in April 2021 and incubated by Jump Trading, before forking off as an independent company in ‘23 (Douro Labs; Michael Cahill, Jayant Krishnamurthy, and Ciarán Cronin).

Pyth's mainnet launched on Solana in August 2021, initially offering price feeds for over 30 crypto assets across Solana, Ethereum, and Terra blockchains. By the end of 2021, it had onboarded over 40 data providers.

In August 2022, Pyth launched its own proof-of-authority Pythnet blockchain, forked from Solana's codebase. Through integration with Wormhole, Pyth expanded price feed support to eight networks by the end of 2022.

In November 2023, Pyth announced a retrospective airdrop of its PYTH governance token to active DeFi users, community members, and price feed-utilizing protocols. This airdrop coincided with the launch of Pyth's on-chain governance system. 

How It Works:

To get real-world data on-chain at high speeds—

Speed and Latency

• Pyth was originally designed for the high-performance Solana blockchain, prioritizing low latency data delivery
•  It achieves extremely fast data refresh rates of 300-400 milliseconds by sourcing data directly from financial institutions 

Data Sourcing

• Pyth sources pricing data directly from first-party providers like exchanges, market makers, etc.
• This direct sourcing model enables the high refresh speeds

Data Aggregation and Validation

•  Like Chainlink, Pyth can aggregate price data from multiple sources  
• It employs cryptographic techniques and game theory to incentivize accurate data reporting
• The Wormhole bridge used to transmit data on-chain also runs automated checks

The PYTH token's single designated use case within the Pyth Network ecosystem is to facilitate on-chain governance voting for community proposals.

In order to participate in the governance voting process, (have your PYTH tokens count towards voting weights) tokens are locked up in Pyth's staking program.

PYTH is a governance token for voting on proposals, and one can only vote if one locks their PYTH tokens

Maximum Total Supply: 10 billion PYTH tokens

Initial Circulating Supply at Launch: 1.5 billion PYTH

Token Unlocking Schedule: 85% of the total supply was initially locked, with a vesting period to gradually unlock tokens over 6, 18, 30, and 42 months following launch.  

And tokens are distributed across various stakeholders like data providers, developers, community marketing and fundraising, early investors, etc. to “bootstrap and nurture” the Pyth ecosystem. 

PYTH is a cryptocurrency project that aims to revolutionize data feeds for DeFi applications. The Pyth.network protocol provides a decentralized oracle solution that delivers real-time, high-fidelity market data to smart contracts on various blockchain networks.  

1. High-Fidelity Data Feeds: Delivering high-quality, real-time market data to DeFi applications. This data includes price information for various assets such as cryptocurrencies, traditional financial instruments, and commodities.  
2. Decentralized Oracle Network: Operates as a decentralized oracle network, which means that it relies on multiple independent data sources to provide accurate and reliable data to smart contracts. This approach helps mitigate the risk of data manipulation or inaccuracies.  
3. Integration with DeFi Platforms: Seamlessly integrate with existing DeFi platforms, allowing developers to access real-time market data directly within their smart contracts. This integration enables a wide range of DeFi applications, including decentralized exchanges, lending protocols, and derivatives platforms.  
4. Community Governance: Decisions regarding protocol upgrades, changes, and improvements are made through a governance process (of users and stakeholders), ensuring that the network remains transparent and adaptable to the evolving needs of the ecosystem.  
5. Scalability and Efficiency: Designed to handle large volumes of data and transactions without compromising performance. This scalability is essential for supporting the growing demand for real-time market data within the DeFi space.  

PYTH aims to facilitate reliable market data in decentralized finance, providing users and developers with the data they need to build innovative and secure applications. 

Disclaimer: This article is not intended to provide investment, legal, accounting, tax or any other advice and should not be relied on in that or any other regard. The information contained herein is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of cryptocurrencies or otherwise.