Pyth Is Pumping! But What Is It? And Why Is It "Valuable"?

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Intro

The Pyth Network, a decentralized oracle network, has emerged as a pivotal player in delivering financial market data to blockchain platforms. With a robust roster of over 95 first-party publishers, Pyth Network offers an extensive range of over 450 price feeds across various asset classes. The Pyth oracle network secures $5 billion+ across 150+ protocols on Solana. Pyth is so critical to Solana's DeFi ecosystem that its oracle operations made up roughly 20% of all Solana network transactions in Q1 2024. Additionally, the Pyth Network operates with a cadre of direct data contributors, consisting of leading institutional traders, prominent market makers, and distinguished DeFi protocols like Jane Street, CTC, and Raydium, who provide up-to-the-minute data both to Solana and Pythnet. Pythnet acts as a dedicated appchain that relays Pyth oracle updates to the wider blockchain ecosystem
Pyth's strategic inclination towards Solana has been a defining aspect of its growth trajectory. Over the past two years, Pyth has made significant inroads in the decentralized oracle space, demonstrating steady expansion, especially within the EVM ecosystem. This expansion reflects Pyth Network's adaptability and responsiveness to evolving market needs.
A testament to its growing influence is Pyth's handling of over 90% of Solana's price feed transactions in the last quarter, a significant achievement when compared to Chainlink, which has long been the leading oracle solution on EVMs. Chainlink's stronghold in the EVM sphere is evident with its command over 90% of price feed transactions. However, Pyth Network's increasing prominence within the Solana ecosystem and its forays into the EVM space signal a competitive dynamic in the decentralized oracle market.

Pyth price feeds within this system are organized into two distinct Solana account types: the product account and the price account. The product account is responsible for holding metadata related to the price feed, such as the ticker symbol, type of asset, and a link to the associated price account. On the other hand, the price account contains details on the authorized data providers, the prices and confidence intervals submitted by each, along with exponential moving averages and other relevant data. Both types of accounts are managed by the Oracle Program, which also oversees a third type of account designed primarily to catalogue the product accounts. This structure allows applications to easily access and navigate through the complete range of price feeds provided by Pyth.
Updates to the price feeds are conducted by the publishers every 400 milliseconds, corresponding to the duration of a Solana time slot. Each update prompts timely adjustments in price and confidence interval aggregations, which are then utilized by downstream applications. The Oracle Program's capability to store individual submissions from each publisher ensures transparency and accountability, allowing for the tracking of publisher performance and the detection of any fraudulent activities. The low operational costs associated with Solana facilitate a streamlined push model for Pyth — and similar oracles — where developers can directly input the necessary price feed into their applications, decode the data, and seamlessly integrate the values that have been published.