SINGAPORE – Mike Cahill, the CEO of Douro Labs, a core contributor to oracle infrastructure provider Pyth Network, announced the launch of a new era of staking for Pyth at the Solana Breakpoint conference on Saturday. 

Although PYTH holders were already able to stake their tokens, they weren’t rewarded or at risk of being slashed – punished by having their wallets’ staked tokens taken away. 

Stakers are now not only eligible for PYTH-denominated rewards for their data contributions to Pyth’s price oracle, but are also at risk of being slashed if they submit an inaccurate price for the network, Cahill told Unchained in Singapore. 

The introduction of the new risk and reward staking features was a community effort, Cahill said. 

Oracles are a type of middleware that brings data – specifically, the prices of assets – to blockchain networks.

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Staking was originally a proposal within Pyth’s governance forum, while the rewards for staking came from the Pyth Foundation donating 100 million tokens – worth $31.5 million at current prices – to the DAO. 

“[This] shows you the various components of the network all contributing and doing their part,” Cahill told Unchained on the sidelines of the conference.

The Wisdom of Crowds

He said the introduction of rewards and slashes to PYTH stakers would improve the security of the oracle network, upgrading it “from very good to excellent.” 

“The possibility [of black swan events is] not only way less likely, because now there’s an economics skin-in-the-game for all the publishers, [but also] it means that there’s economic risk if the entire network is wrong,” he explained. 

Pyth Network and other oracles in the DeFi ecosystem are used by two types of crypto applications: lending protocols that have high total value locked (TVL) and onchain perpetual markets.

According to Cahill, Pyth Network rival Chainlink has been historically the biggest player in the high-TVL market segment.  

In the onchain perpetual market segment, “Pyth has always been the market leader,” Cahill said. “Sixty percent of … perpetual applications or derivatives applications onchain use Pyth.” 

Pyth secures nearly $4.4 billion in total value across various protocols in the DeFi ecosystem, according to data from DefiLlama.