Crypto data project backed by big high-speed traders set to kick off

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A crypto project built by some of the world’s largest high-speed traders will launch on Wednesday, the first step its backers see as a “potential game changer” for trading stocks and other assets on the market. blockchain technology.

The Pyth Network has persuaded companies such as Jump Trading, Virtu Financial, GTS, Hudson River Trading, and DRW Cumberland to put aside their traditional rivalry and join forces to explore the potential of decentralized finance, or DeFi.

The project, which only started in April, has also attracted the US IEX and MIAX Pearl exchanges, the LMAX forex platform and the FTX crypto derivatives exchange as its momentum builds.

Pyth (rhymes with myth) seeks to change the way market data is distributed. Banks and merchants have long complained about the data fees charged by exchanges and the legal restrictions they face in redistributing or owning the data they helped create. David Mercer, CEO of LMAX, said Pyth could “revolutionize and democratize the delivery of market data.”

DeFi offers a chance to build an alternative system, say its supporters, because a blockchain guarantees the provenance of an asset and its owner.

Traders and developers of exchanges built Pyth to be a bridge between traditional markets and the world of crypto, known in industry jargon as an “oracle.”

Pyth collects and distributes data on stocks, conventional currencies, crypto and commodity transactions provided by traders and high frequency exchanges and puts it on a blockchain or distributed ledger. This data can be used in other crypto trading projects.

Pyth anonymizes the data and publishes the symbol of the asset, like Apple or Bitcoin, an aggregate value and confidence level, which reflects how much Pyth thinks the larger market price is of his own prices.

David Olsen, president of Jump Trading, an early supporter of the project, described Pyth as “extremely exciting”. “It remains to be seen how it evolves. The wide range of results remains one of Pyth’s most intriguing developments, ”he said.

Pyth is built on the Solana blockchain because it can handle 50,000 transactions per second, a scale that puts it on a par with Visa, the payments company, and exchanges such as the Nasdaq. Most blockchains can only handle a handful of transactions per second.

“[Current blockchains] are not meant to be traded, but they are very valuable for valuation purposes. Pyth has the best chance of becoming the oracle of the capital markets, ”Mercer told the Financial Times. “Nonetheless, we have to be prepared for this to fail. “

Solana was backed by venture capitalists Andreessen Horowitz and Polychain Capital, and Alameda Research, the cryptocurrency market maker co-founded by FTX chief Sam Bankman-Fried.

At present, there are no digital tokens connected to Pyth and the developers are finalizing the governance structure that will allow users to decide on its future development.

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