#23 A Pythian Summer
This edition details the latest Pyth developments and highlights our wonderful, ever-growing ecosystem of users and community members (aka Pythians)!
About:
The Pyth network is a first-party financial oracle solution that aims to bring valuable market data to the general public. The network does so by incentivizing market participants — trading firms, market makers, and exchanges — to share directly on-chain the price data collected as part of their existing operations. The network then aggregates this first-party price data on-chain and makes it available for use by either on- or off-chain applications. Discover more in our whitepaper or wiki page.
Build with Pyth
We are pleased to announce the launch of Pythnet, a network built from the Solana codebase that will enable Pyth to scale and deliver its top quality and high-frequency premier pricing to other chains via the Wormhole cross-chain messaging protocol.
On Solana, Pyth supports 80+ price feeds by aggregating data from over 65+ data providers, resulting in over 700 price update operations per second. With Pythnet however, the network can scale 20x to perform tens of thousands of price updates per second. This launch enables Pyth to take the next step in its evolution by adding new financial data (starting with more equity symbols!) and continuing to grow its network of high-quality first-party data providers. These additional high-fidelity feeds will remain available on Solana but now be accessible across other chains, where projects require the best oracle, via the Wormhole protocol.
Hacker Houses change locations, but the Pythians follow! From August 3rd to 7th, the Solana Hacker House took place in Seoul, Korea, and as usual, we took the opportunity to meet up with the community and discuss alongside leading projects on Solana (Drift, Solend, and Zeta) during a DeFi panel.
Wormhole turned one earlier this month (August 9th), and we wanted to extend our best wishes to them as the cross-chain future of the Pyth network is dependent on this amazing protocol.
Over its 1st year of existence, Wormhole generated 1.3 million cross-chain messages, reached up to $4.5B in TVL and enabled, through Portal (a token briged built on top of Wormhole) over $30B of value to be transferred across chains.
The Pyth network (mainnet) birthday is coming fast (26th August), so be on the lookout!
Please apply if you would like to attend xHack! https://jumpcrypto.com/xhack/
Interns always carry the heavy workload, especially in crypto! This month the Pyth Intern went and tackled the oracle latency issue. The thread is available here, but we’ll provide the summary below:
Oracle latency is important! Any sub-optimal design choice introduces latency
Oracle latency is not solely dependent on the blockchain speed: the latter is the common lowest denominator, but not everyone can or wants to match it
Oracle latency, or the oracle’s ability to update (change) its price, firstly depends on the data sources
What if it were about liquidity too?
Over the past month, and linked to oracle latency mentioned above, lending protocols have garnered a significant spotlight among all the DeFi applications. With this in mind, we decided to dedicate some time to further thinking about how those protocols could handle situations that would put the whole platform at risk (bad debt…). All our findings are exposed in this blog: Improving Lending Protocols with Liquidity Oracles.
If you were to be in a rush, our intern did take the time to summarize the findings in a thread.
#PoweredByPyth Applications
Cega is the first DeFi exotic derivatives protocol that offers safer, high-yield vaults for investors to stake their stablecoin. Cega vaults offer principal protection against severe market movements up to a 90% price drop. This means that even if the crypto market falls by 90% in the next 30 days, investors do not lose their principal while still collecting high yield. Cega uses Pyth pricing data to determine whether options trades have knocked-in or knocked-out as well as calculate the trade settlement at options’ expiry.
If you want to learn more about Cega, check out our Pythiad (August 5th).
Friktion, the leading DOV on Solana, has just passed, in merely 8 months, $2.5B in options trading volume! Friktion's main product is its collection of decentralized option vaults, which enable users to partake in automated strategies to earn a yield. Friktion recently released Entropy, a platform offering regular, power, and volatility perpetuals products to users.
For its options settlement, Friktion generates a 30-minute TWAP based upon the Pyth streaming price feeds. The regular and power perpetuals products leverage Pyth’s prices to determine funding rates.
Lifinity is the first proactive market maker on Solana designed to improve capital efficiency and reduce impermanent loss. The magic is made possible thanks to Pyth’s low-latency and informative pricing data. Earlier this week, we were joined by the Lifinity team for a deep product dive and a glimpse into the origin of the Lifinity initiative. Read it all in our weekly Pythiad.
OptiFi is the first derivatives DEX with a portfolio-based margining approach: a partial liquidations engine, a delta-neutral options AMM vault, and a market marker incentive program that decided to be #PoweredByPyth.
OptiFi supports portfolio margining across all financial instruments with the same underlying. This design enables users to build complex strategies written on a single underlying without the burden of multiple margin requirements!
As of today, OptiFi supports 2 assets for options trading and liquidity providing: BTC and ETH, with SOL to come later this summer. OptiFi leverages Pyth’s price feeds within its AMM vault to provide liquidity on the order book, as well as for weekly settlement on Fridays at 8:00 AM UTC.
Port Finance is a borrow-lending and money market protocol on Solana providing a suite of fixed income products. These products include variable rate and fixed rate lending, as well as interest rate swaps. Port uses Pyth prices to determine users’ account health and mark unhealthy positions for liquidations. On top of this, Port also integrates Pyth’s EMA prices to further ensure protocol safety.
If you want to learn more about Port Finance, check out our Confidentia (August 4th).
Xenon is the first universal margin protocol on Solana that allows you to use leverage across DeFi protocols, all from a single margin account. Xenon is designed to be composable in such a way that it allows you to leverage trade on any DeFi protocol that integrates with it.
Xenon is #PoweredByPyth to accurately value all native assets on its platform. Leveraging Solana's infamous composability, Xenon builds upon other protocols #PoweredByPyth like Mango Markets or Solend.
Zeta Markets is the premier under-collateralized DeFi derivatives platform, providing liquid derivatives trading to individuals and institutions alike.
Pyth provides per slot asset price updates for Zeta’s DEX. Up-to-date, low-latency pricing helps us ensure that our on-chain pricing is accurate and that our platform security mechanisms can function as expected (margining system and liquidations). We also leverage Pyth prices to provide us with settlement prices for our DEX and FLEX options contract expiries for determining payouts and losses for our users.
Read it all in our weekly Confidentia.
Pythian Community
What does it mean to be a Pythian?
For us, it means being part of a tight-knit community that values camaraderie, learning, and long-term thinking about the industry and all the participants within. Let’s reflect on some past contributions from a multitude of people, each with different passions and capabilities.
A Pyth(ia) Comic?
2 of our community members (@EgorNaive and @VexterZ) had the wonderful idea to put the Pythia into drawings. The result is breathtaking!
Note: don’t forget nor mix it up with the Pythia NFT made by the one and only Shake and CyberSamurai!
@Mardeni01, a member of the Developer DAO, took the time to create a succinct learning course followed by a quiz about the Pyth network. Not only can participants discover and further strengthen their knowledge about Pyth, but they can also earn a wonderful NFT!
Tired of trying to explain what Pyth is all about to your friends, family, or strangers in the street? @Serotonin_juice just helped you with his Pyth Network Deep Dive. From the history of Pythia herself to what oracles do and how Pyth works, Serotonin Juice covers it all! If you are looking for more, don’t forget the Pyth Wiki.
Pyth Intern new Profile Picture
The Pyth Intern made it a custom to only wear Twitter Profile Pictures if they’re made from Pythians’ bare hands! As @OluapPaulo1 released a fully drawn profile of the Pythia, the opportunity to display our Pythian artistic capabilities could not go to waste.
We can’t wait to hear what you think! Feel free to join the Pyth Discord, follow Pyth on Twitter, and join Telegram to learn more and ask any questions. Take fate into your own hands.