The PYTH Airdrop Is Finally Here. But What Is Pyth Network?

The
buzz
around
this
week’s

token
airdrop
from
Pyth
Network,
a
blockchain

oracle
firm
that
competes
with
Chainlink,
has
shed
light
on
a
long-simmering
battle
between
companies
to
bring
the
nascent
digital-asset
industry’s
infrastructure
up
to
the
demands
of
traditional
finance.

JPMorgan
and

Visa
stand
out
as
the
latest
“TradFi”
firms
to
integrate
“decentralized
ledger”
technology
and
other
crypto
concepts
into
their
systems.

Oracle
services
like
Chainlink

(LINK)
have
played
a
key
role
in
spearheading
this
merger
between
the
old
and
the
new,
allowing
blockchains
to
pull
in
information
–
mainly
price
feeds
–
from
crypto
exchanges
and
other
real
world
data
sources.

But
for
the
marriage
of
centralized
and
decentralized
finance
to
prosper,
crypto
infrastructure
needs
to
rise
to
the
task
–
meaning
traders
need
access
to
the
kind
of
minute-to-minute
market
data
that
they’ve
grown
accustomed
to
in
a
world
of
transcontinental
cables
and
high-frequency
price
feeds.

That’s
where
Pyth
comes
in.
Like
Chainlink,
Pyth
is
an
oracle
service
–
a
platform
that
feeds
data
to
blockchains.
But
Pyth’s
market-focused
“real-time
data”
feeds
are
significantly
faster
than
Chainlink’s,
something
that’s
supposed
to
make
the
service
better-tuned
to
certain
financial
use
cases.

Originally
designed
for
the
speed-centric
Solana

(SOL)
blockchain
and
later
built
out
into
its
own
chain,
Pythnet,
based
on
Solana’s
technology,
the
project
claims
on
its
website
that
it
refreshes
its
data
feeds
at
300-400
millisecond
intervals.
Chainlink’s
refresh
rate,
by
contrast,
can
range
from
minutes
to
hours.

Chainlink’s
comparatively
slow
pace
comes
down
to
how
it
sources
data,
by
relying
on
“decentralized”
consortiums
of
third-party
data
providers
and
a
network
of
node
operators
to
report
out
information.
Chainlink’s
price
feeds
refresh
at
set
intervals,
or
dynamically
in
response
to
market
volatility
(things
might
speed
up
soon
with
new

latency-focused
updates).

Pyth,
by
contrast,
sources
data
directly
from
first-party
financial
institutions
–
both
traditional
and
crypto-centric
–
like
Jane
Street
and
Binance.
While
this
institution-driven
system
carries
whiffs
of
“centralization”
–
anathema
to
the
disintermediating
world
of
crypto
–
it
brings
drastic
speed
improvements,
several
orders
of
magnitude
faster
than
competing
services,
supposedly
in
the
name
of
serving
the
demands
of
modern
finance.

According
to
Pyth’s
documentation,
the
Pythnet
network
also
aggregates
its
price
measurements
from
multiple
sources.
Pyth,
on
its
website,
claims
to
rely
on
various
game
theory
and
cryptography
practices
to
ensure
its
numbers
are
reported
accurately.

For
example,
the
“bridge”
service
that
Pyth
uses
to
relay
data
to
blockchains,
Wormhole,
automatically
runs
certain
checks
before
reporting
numbers
to
blockchains.
While
these
validation
services
can
help
protect
Pyth’s
numbers
from
tampering,
the
system
can
still
risk
measurement
errors
if
multiple
sources
report
inaccurate
numbers.

Pyth
kicked
off

the
highly-anticipated
airdrop
of
its
PYTH
token
this
week.
The
new
cryptocurrency
will
double
as
votes
in
the
protocol’s
governance
system,
meaning
the
tokens
can
be
“staked”
by
users
who
want
to
weigh
in
on
how
Pyth’s
tech
evolves.

The
token,
whose
supply
will
be
distributed,
in
part,
to
around
90,000
crypto
wallets
that
have
previously
interacted
with
the
protocol,
is
currently
trading
at
$0.33,
down
from
a
height
of
$0.51.

In
addition
to
jump-starting
the
market
for
a
new
token,
protocols
frequently
use
airdrops
as
a
tactic
to
gain
attention
and
attract
users.

The
Pyth
Network
currently
ranks
as
the
fourth-largest
oracle
project,
with
$1.5
billion
in
total
value
secured
(TVS),

according
to
DefiLlama.
Chainlink
has
a
TVS
of
$14.7
billion,
followed
by
WINkLink
with
$7.74
billion
and
No.
3
Chronicle
with
$6.72
billion.

But
in
terms
of
networks
served,
Pyth
ranks
second
with
120,
just
behind
Chainlink’s
361.