Pyth is an oracle protocol to make accurate, high-resolution financial market data easily accessible on-chain. The protocol is designed to be a selfsustaining decentralized network that coordinates data publishers and consumers.
The Pyth protocol is designed to incentivize participants to continuously publish price updates for various products (such as BTC/USD). Each product has a price feed that continuously updates with its current price and a confidence interval representing the estimated uncertainty of the price. For example, the current BTC/USD feed may say the price is $65000 ± $50. The feed for each product is published on-chain, where it is read by consumers, who may be either blockchain-enabled programs or off-chain applications. An on-chain program produces the price feed for each product by aggregating the price feeds of individual publishers. The protocol is designed to attract publishers who are first-party data providers with the ability to source high-quality, timely pricing information.
In addition to publishing these price feeds, the Pyth protocol will allow consumers to optionally pay data fees. In exchange for these fees, consumers may receive a payout from delegators if the oracle price is inaccurate. Data fees enable projects that use the protocol’s prices to hedge against oracle inaccuracies on behalf of their users. A share of data fees go to publishers, which enables them to monetize their data.
The on-chain governance mechanism will approve or reject proposals using a coin-voting system. Anyone with a minimum quantity of staked $PYTH tokens will be able to make a governance proposal. $PYTH stakers will then be allowed to vote on these proposals. They will also be able to delegate their votes to others. Governance votes will run for 2 weeks from the proposal date, and only tokens staked in prior epochs will be allowed to vote. Users will be permitted to vote with $PYTH tokens that are staked toward other applications (e.g., data staking). Additionally, some users currently own locked $PYTH tokens, which will also be permitted to vote.
