Acryptoinvest.news: The buzz surrounding this week's token airdrop from Pyth Network, a blockchain oracle company that competes with Chainlink, has shed light on a long-simmering battle between the companies to bring the infrastructure of the nascent digital asset industry in line with the demands of traditional finance.
JPMorgan and Visa stand out as the latest TradFi companies to integrate “decentralized ledger” technology and other cryptocurrency concepts into their systems.
Oracle services such as Chainlink (LINK) have played a key role in initiating this fusion of old and new, allowing blockchains to obtain information, mainly price data, from crypto exchanges and other real-world data sources.
But for the union of centralized and decentralized finance to flourish, crypto infrastructure must be up to the task—meaning traders need access to the minute-by-minute market data they are accustomed to in a world of cross-continental cables and high-frequency price feeds.
This is 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, which should make the service better tailored to specific financial use cases.
Originally on the Solana blockchain
Originally developed for the speed-oriented Solana (SOL) blockchain and later built into Pythnet's own blockchain based on Solana technology, the project claims on its website that it updates its data feeds at 300-400 millisecond intervals. Chainlink's update rate, on the other hand, can vary from minutes to hours.
Chainlink's comparatively slow pace of operation is due to the way it obtains data, relying on “decentralized” consortia of third-party data providers and a network of node operators to provide information. Chainlink price feeds are updated at regular intervals or dynamically in response to market volatility (this could soon speed up with new latency-focused updates).
Pyth, in contrast, sources data directly from third-party financial institutions – both traditional and crypto-centric – such as Jane Street and Binance. While this institutionally driven system carries the whiff of “centralization”—anathema to the fading world of crypto—it delivers radical speed improvements, orders of magnitude faster than competing services, presumably in the name of meeting the needs of modern finance.
According to the Pyth documentation, the Pythnet network also aggregates price data from multiple sources. On its website, Pyth claims to rely on various game theory and cryptography techniques to ensure the accuracy of its numbers.
For example, the bridge service that Pyth uses to transmit data to blockchains, Wormhole, automatically runs certain checks before reporting numbers to blockchains. While these verification services can help protect Pyth's numbers from tampering, the system can still risk measurement errors if multiple sources report inaccurate numbers.
PYTH Giveaway
This week, Pyth launched the long-awaited airdrop of its PYTH token. The new cryptocurrency will double the voting power of the protocol's governance system, meaning tokens can be “staken” by users who want to gauge how Pyth technology is developing.
The token, whose supply will be partially distributed among approximately 90,000 crypto wallets that previously interacted with the protocol, is currently trading at $0.33, down from a peak of $0.51.
In addition to launching a market for new tokens, protocols often use Ether airdrops as a tactic to gain attention and attract users.
According to DefiLlama, the Pyth network is currently the fourth largest oracle project with a total value secured (TVS) of $1.5 billion.. Chainlink has a TVS of $14.7 billion, followed by WINkLink with $7.74 billion and Chronicle with $6.72 billion.
But in terms of the number of networks served, Pyth ranks second with 120, just after Chainlink with 361.