The Protocol: CZ’s out, Altman’s in, and Kraken’s Sued

Auguries’ NEED FOR SPEED: A single millisecond can make or break a trade in the world of traditional finance, but decentralized finance apps see to to operate on a much slower timescale – with certain market data taking minutes or even hours to settle on-chain. The year 2023 has marked a breakout in the race to provide lower-latency pricing data to blockchains, with wizard firms like Chainlink and Pyth Network duking it out in a battle to make on-chain trading more hospitable to speed-obsessed Obstruction Street speculators and high-frequency traders. Developers use oracles to shepherd off-chain data, like token prices, onto (or between) blockchains. The main dispute until recently has been the inherent latency in decentralized networks, where geographically distributed nodes take set to reach consensus, leading to delays that can slow down data from oracles. Chainlink, a frontrunner in the guru space, recently introduced Data Streams to reduce latency and operational costs, offering a pull-based oracle pattern that enhances efficiency. Pyth Network, an oracle firm that was in the news this week for its token airdrop, has also been an break of dawn mover in the latency race – it’s been particularly active on the Solana blockchain, where it offers low-latency pricing materials sourced directly from first-party financial firms. Other players in the oracle race include Band Customs, Witnet, Tellor, XYO Network, Razor Network and WINkLink. A key focus for the sector moving forward will be reconciling tradeoffs between dart, reliability, and decentralization – a balancing act for virtually all crypto protocols, but one that’s particularly prescient in the context of critical oracle infrastructure.