Research | Why Should DeFi Protocols Migrate from Push to Pull Oracles?

About the Bounty

Research Topic:

Write and publish a thoughtful research article on why DeFi protocols should migrate from push oracles to pull oracles with reference to Pyth Network and other oracle providers as well as quantitative evidence (where necessary).

About Pull Oracles:

Most oracles today are push oracles where the oracle operator is responsible for submitting price updates to the blockchain. Pyth is different: it is a pull oracle where anyone can permissionlessly update the on-chain price. This document explains the differences between push and pull oracles.

Push oracles periodically update an on-chain price based on external trigger conditions. The oracle has a smart contract that stores the current price. The contract also has a set of permissioned operators who are authorized to update the price. The oracle operators then commit to updating the on-chain price at a specific cadence, for example, once every 30 minutes or if the price moves by 1%. Thus, in a push oracle, the on-chain price is periodically updated, regardless of whether or not anyone is using it.

In contrast to push oracles, pull oracles only update the on-chain price when requested. There are different ways for users to request an updated price from a pull oracle. Some pull oracles respond to on-chain requests: applications send one transaction to request data from the oracle, which then submits the response in a second transaction. Pyth uses a simpler system where users can request the latest price update from an off-chain service. Anyone can submit a price update to the on-chain Pyth contract, which verifies its authenticity and stores it for later use. This system allows applications to use a single transaction flow that first updates the price then performs the necessary application logic.

To learn more about Pyth Network and Pull Oracles, you can start with the documentation here.

What is the Pyth Network?

First announced in April 2021, the Pyth Network is the largest and fastest-growing first-party financial oracle for real-time asset price data. Pyth delivers over 500 low-latency price feeds across digital assets, FX, ETFs, equities, and commodities to more than 55 blockchain ecosystems, securely and transparently.

The Pyth Network comprises some of the world’s largest exchanges, market makers, and financial services providers, who contribute their proprietary price data to the Pyth oracle for on-chain aggregation and distribution to smart contract applications.

Pyth introduces a pull oracle design which empowers apps to request or pull the latest price update to their native blockchain on demand. The Pyth Network has secured more than $400B in trading volume across hundreds of Web3 and Web2 applications. You can learn more from the Pyth website and documentation.

For more information about Pyth Network, please visit the website and documentation.

Submission Requirements:

• Word count: The article can be anywhere from 1,000 to 2,000 words.

• Publication: The article should be published on a personal or third-party website (e.g. a blog or research house)

• Sharing: The published article should be shared on X and LinkedIn. Please add these links when making your submission.

• Submissions will not be taken into account if:

  • The submission is not written in English.

  • The submission is plagiarized.

Grading:

• Originality: Your research should be original.

• Evidence: Your research should include quantitative analysis and rigour.

• Quality: The data and methodology used should be transparent and logical.

• The best articles will contain clear, logical, and well-reasoned insights and will incorporate thoughtfully analyzed data.

• Winners will be selected within one week of the conclusion of the submission period.

Bounty Prizes:

• 1st place will get 1,000 PYTH tokens

• 2nd place will get 666 PYTH tokens

• 3rd place will get 333 PYTH tokens

Resources

• Explore Pyth

• Documentation

• Best Practices

• How Pull Oracles Work

• Pythnet Appchain

• Pyth on EVM

• Discord

• Telegram

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