DeFi just became more precise
Introducing: Pyth Benchmarks 🔮
⏩ Instantaneous settlements
⏪ Delayed orders and backfilling
Read more about Pyth Benchmarks—a first-of-its-kind off-chain price oracle—in the 🧵👇
2/ What are benchmarks?
Benchmarks are a broad class of standards used in the financial world to steer market participants’ decisions and arbitrate payouts
🔮 Reference prices (BTC/USD)
🧮 Indices (S&P500)
🏦 Reference rates (LIBOR)
📩 Corporate information (earnings)
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Indices like the S&P500 simplify tracking aggregate stock and market performance and replicating these in an investment portfolio
Reference prices and rates enable derivative instruments to be structured in ways that are agreed upon by different parties
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In fact, the primary value of a benchmark is its ability to provide standardization
Without conventionally agreed upon benchmarks, every player may end up using a different value in their settlement or evaluation process
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The lack of standardization leads to the fragmentation of liquidity for aggregated and derivative products, as two products tracking the same general concept (like weekly BTC options) through two different benchmarks are not fungible together!
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Enter Pyth Benchmarks 🔮
Pyth Benchmarks provide access to historical Pyth prices for both on- and off-chain applications
These benchmarks are available for all 200+ Pyth price feeds and accessible from the Pyth website, as well as the Pyth smart contract and Web2 API
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The Pyth Benchmarks meet all the requirements of a good benchmark:
🔮 Data is sourced from reputable first-party data providers
🧮 Pyth prices are aggregated on-chain and verifiable
⏩ Prices update every second
⛓️ Prices are available on 13+ different blockchains
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It’s not surprising to see DeFi leaders like @ribbonfinance already leveraging Pyth Benchmarks 🔮
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Ribbon Finance—the number one DOV on Ethereum—is settling its crypto options weekly at 08.00AM
With Pyth Benchmarks, Ribbon is able to retrieve the necessary settlement prices within seconds of their expiries and settle them instantly, improving their overall UX!
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“Pyth price feeds help with accuracy for settlement of options contracts”, said Julian Koh. “There is usually over $100m of open interest we need to settle every week, so the accuracy really matters. Pyth has delivered on this without any hiccups.
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Another benefit for options protocols is that the platform market makers will not have to hedge their exposure in between the real-life expiry (08.00AM) and the usual 10-minute delayed settlement provided by existing oracles!
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“As a leading institutional crypto trading firm and global derivatives market maker, we are excited to utilise Pyth Benchmarks and its feeds to drive DeFi options protocol development”, said Darius Sit, Founder and CIO of @QCPCapital
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“Pyth Benchmarks’ instantaneous settlements, high latency and reputable data help to push the boundaries of the ecosystem, enabling DeFi to progress to the next level. We are delighted to be one of the first crypto players to partner with Pyth on this solution.”
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This is only the beginning of Pyth Benchmarks
Future releases will provide access to combinations of prices across assets and times enabling:
1️⃣ Apps to retrieve various TWAPs (1min, 5min, 15min,…)
2️⃣ Creation of indices similar to the S&P500
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Discover the Pyth Benchmarks website:
pyth.network/benchmarks
Get started with Pyth Benchmarks:
docs.pyth.network/benchmarks
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Want a deeper dive?
Our research blog goes into greater depth on Pyth Benchmarks:
pythnetwork.medium.com/introducing-the-pyth-benchmarks-713f2d5fdcf5