Pyth Network Investor
Investing In Pyth Network (PYTH) – Everything You Need to Know
Securities.io maintains rigorous editorial standards and may receive compensation from reviewed links. We are not a registered investment adviser and this is not investment advice. Please view our affiliate disclosure.
Pyth Network USD (PYTH -2.28%)
The Pyth Network (PYTH -2.28%) is a popular oracle solutions provider. The network introduces a direct-from-source architecture that provides considerable benefits compared to the competition. As such, the platform now offers oracle services to 45+ blockchains.
What are Oracles?
Oracles are off-chain nodes that provide data to or from blockchain networks. They are commonly used to access price feeds by DeFi applications and Dapps. Oracles are a crucial industry element, and thousands of applications rely on their data daily. For example, DEXs (Decentralized Exchanges) often leverage oracles for price feed data.
What Problems Does Pyth Network (PYTH) Attempt to Fix?
The Pyth Network introduces a proprietary oracle infrastructure to the market designed to help solve various issues that have plagued the industry. One major problem is inaccurate information. Pyth's direct-from-source oracle data transmission ensures a high level of accuracy compared to third-party providers.
Source – Pyth Network
Additionally, Pyth can self-validate and authenticate oracles, leveraging the decentralized nature of the network. Pyth's oracles data gets cross-referenced against other providers to gauge their quality. Faulty or malicious nodes receive penalties or get booted from the network.
Delayed Oracle Data
In the past, data delays could cause pricing issues for DeFi users. These issues were compounded as lending firms and other DeFi applications also began to integrate oracles. Sadly, even small delays in pricing data can hurt multi-layered DeFi Dapps.
Time is of the essence when dealing with volatile assets such as cryptocurrencies. As such, any delay in pricing data can result in issues for traders. The Pyth Network's direct-from-source architecture eliminates delays and introduces real-time data transmissions.
Benefits of Pyth Network (PYTH)
You can gain a lot of benefits from direct data sourcing. For one, these firms have agreed to provide this info to nodes. As such, you know that data is approved by the exchanges, market makers, and trading firms that provide it.
This approach adds consumer confidence to applications. Additionally, it gives Python Network dapps a competitive edge in certain market conditions. For example, if the price of an asset suddenly drops, Python Network oracle users will know with confidence before slower options.
No Fees for Solana Network
Another benefit Pyth Network users enjoy is zero fees for Solana blockchain users. This strategy helps to drive further expansion of the Solana ecosystem. It also helps to ensure Solana dapps have timely and quality data.
Versatility
The Pyth Network offers its services to all blockchain networks via bridges. Notably, off-chain networks pay a small fee to use Pyth's oracles, enabling the network to offer free services to Solana users. This flexibility has helped it expand its operations. According to company documentation, 25% of Oracle dapps currently leverage a Pyth solution.
How Does the Pyth Network (PYTH) Work?
The Pyth Network launched in 2021. It was built to service the growing dapp oracle community. Notably, the developers hard-forked the Solana blockchain to create the Pythnet. This purpose-built blockchain provides Pyth users with scalability and transparency.
Pyth's architecture is unique because it incorporates a new pricing structure called confidence intervals. These snapshots provide pricing data alongside a liquidity rating. This approach gives traders a more accurate representation of the asset's value. To accomplish this task, The Pyth Network leverages three types of participants.
Feed Users
Feed users encompass all the Dapp developers, DeFi networks, and web3 applications using their services. These projects can connect directly to real-time price feeds directly from the source using a variety of methods.
In the Pyth Network, feed users pay PYTH tokens to secure publisher data feeds. This model improves the accuracy, transparency, trackability, and overall usability of PYTH tokens.
Publishers
Publishers provide data from the source to the network. For their efforts, they receive rewards in the form of PYTH tokens. These rewards are based on various metrics, including accuracy, timeliness, and stake weight.
Publishers that provide inaccurate data get their rewards slashed. If the offenses continue, the oracle gets funding slashed and removed. In this way, Pyth ensures its oracles remain within its quality guidelines.
Delegators
Delegators are a new addition to the oracle solution that provides Pyth with some advantages. Network delegators stake their tokens to publishers. For their efforts, they earn rewards. These rewards are raised depending on the accuracy of the publisher's data. This structure incentivizes the community to push the most accurate data.
Pyth Data Association
The Pyth Data Association is a Swiss non-profit designed to improve the ecosystem. The group has managed to secure strategic partnerships with various VC firms. Specifically Multicoin Capital, Wintermute Ventures, Borderless Capital, CMT Digital, Delphi Digital, Bodhi Ventures, Distributed Global, and Castle Island Ventures.
Token
PYTH serves multiple roles within the ecosystem. Its primary use is as a utility token that facilitates the transfer of data services in a transparent and trackable manner. As such, it's also a rewards token and can be staked. PYTH token holders also gain access to the community governance mechanism.
Governance
PYTH token holders vote on upgrades and how the network evolves. In this arrangement, the more tokens you stake, the more weight your vote holds. This structure ensures that those with the most to lose have their voices heard. Community governance systems like this have become standard in the DeFi market because they help to keep a project’s community together.
How to Buy Pyth Network (PYTH)
Currently, Pyth Network (PYTH) is available for purchase on the following exchanges.
Uphold – This is one of the top exchanges for United States residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong.
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.
The exchange offers trading access to over 190 countries including Australia, Canada, Europe. While Kraken accepts residents of the United States (Excluding New York & Washington state), access to Pyth Network (PYTH) is restricted.
KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens. It is often the first to offer buying opportunities for new tokens. This exchange currently accepts International & United States residents.
The Pyth Network (PYTH) Improves Confidence
It's easy to see why developers would opt to have direct-from-source data provided by Pyth Network versus competitors. This approach improves Dapp accuracy and deployment. As such, the Pyth Network is a smart option for developers to consider moving forward.
You can learn more about exciting blockchain projects here.
