Project Name: Pyth Network
Tag: $PYTH
Type: Oracle

Introduction

Pyth Network is a decentralized oracle network primarily based on the Pyth Network proprietary chain on the Solana blockchain. It utilizes the core mechanism of the Pull Price Update Model to provide blockchain projects with price oracle and market data.

Main Components

Data Providers

Reputable institutions, mainly exchanges, directly submit price data to the Pyth chain’s Oracle program. Multiple providers submit data for each price information product (e.g., BTC/USD).

Pyth Oracle

The Pyth Oracle program operates on the Pythnet application chain. It transparently aggregates submitted data to produce consolidated outputs, generating unified prices and confidence intervals for each price source every 400 milliseconds.

Data Consumers

Data consumers on Pyth use aggregated price data, typically decentralized applications, to read aggregated price sources and integrate the data into their smart contract logic.

Workflow

The Pythnet’s Pyth chain oracle program combines data submitted by multiple providers to generate a single aggregate price and confidence interval. Applications then read the price information generated by the Oracle program. After obtaining the prices from data institutions, to ensure the security and trustworthiness of the data, these data also go through Pyth’s own “confidence interval” to estimate the range of values.

Pyth Network requires multiple data providers (currently up to 32) to support each price information. Pyth data providers submit their price quotes and calculated confidence intervals in each Solana period (every 400 milliseconds). The on-chain Pyth program consolidates the inputs from each data provider into a price stream (closely related to the “true price”) and accompanying confidence feed. The consolidated confidence feed reflects differences between prices from these data providers. For example, periods of high volatility or low liquidity may lead to significant price differences between different exchanges.
After completing price aggregation, if operations continue on the Solana network, there is no need for Wormhole. However, if there is a need to cross-chain to other networks in the future, Pyth’s oracle data messages need to be passed through Pyth’s cross-chain bridge function with Wormhole’s Layer1.

Core Mechanism

Pyth Network operates on a “Pull” oracle model, where users can actively request or retrieve the necessary data from Pyth into their native blockchain environment. In contrast, traditional oracle solutions use a “Push” model, where no one actively requests price updates and price data is automatically pushed onto the chain at set frequencies.

In the third-party push model, oracle nodes obtain data from primary or secondary sources, establishing multiple trust assumptions. Additionally, gas fees are incurred for each fixed interval update on the chain, adding more costs to adding or reducing the delay of on-chain updates.
In comparison, the Pull model sources data from exchanges, market makers, and DeFi protocols within the network, where these data providers are incentivized with tokens, creating an interesting alignment that addresses trust assumptions regarding the reliability of third-party data. Furthermore, Pyth’s oracle model lowers network costs by shifting update costs to data consumers and implements measures such as updating prices based on user demand and high-frequency transmission of price updates off-chain to achieve low latency, broad coverage of price information, and multi-chain availability.

Key Metrics

Tokenomics

1. Total Token Supply: 10,000,000,000
2. Initial Token Circulation: 1,500,000,000
3. Token Allocation:
   • Issuer Rewards: 22%
   • Ecosystem Development: 52%
   • Protocol Development: 10%
   • Community and Launch: 6%
   • Strategic Contributors (Private Placement): 10%
4. Token Unlock Schedule:
   • 85% of the total PYTH tokens are initially locked, with locked tokens unlocking at 6, 18, 30, and 42 months after the initial token issuance.