30s Summary

Pyth Network has bypassed Chainlink in the number of transactions completed over the past month, possibly due to its nimble data strategy. The competition is intensifying with Chainlink losing ground to Chronicle, Pyth, and Redstone, particularly in areas demanding fast, reliable data. Despite progress being slower than hoped among these Oracle companies, their approach can support regular updates for apps without incurring huge operation costs. Although Chainlink remains a significant player in DeFi, some see scope for improvement in its model, as its costs and transparency issues grow. As the sector expands into traditional finance, Oracle providers who are secure, resilient, transparent and can adapt are likely to be successful.

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Pyth Network, a company that provides key data is beating Chainlink in transactions done in the past month, even though it safeguards less total value. This might be due to Pyth’s strategy, giving data only when asked rather than updating it often like Chainlink. This works really well for things like trading where you absolutely need up-to-the-minute data.

Niklas Kunkel, who used to lead Chronicle, another company like Pyth and Chainlink, talked about how the competition is heating up. He pointed out that Chainlink is losing ground to Chronicle, Pyth, and Redstone. Since Pyth and Redstone are built for speed, they’re great for things like derivatives and options, which need super-fast and reliable data.

In just a month, Pyth has seen $36 billion worth of transactions. Kunkel points out this shows the growing need for companies that can provide real-time data quickly. But, Niklas also notes that these companies haven’t evolved as quickly as they should have. This slow progress from Oracle companies like Pyth and Chainlink have made them a weak link in DeFi (decentralized finance), often leading to hacks.

By focusing on providing real-time data only when asked, companies like Pyth can support apps that require regular updates without bearing the huge operation costs that big companies do.

Kunkel noted that Chronicle has made some changes to its model which makes it 80% cheaper to operate than Chainlink. He added that this approach allows companies to offer frequent updates without the added cost.

Even with Pyth’s growth, Chainlink is playing a huge role in the DeFi world. It safeguards high-value assets and is highly respected for its reliability. However, Kunkel also suggested that there’s a real opportunity for companies to improve on this model. He notes that while Chainlink currently takes care of more value, it’s slipping on keeping costs manageable and maintaining transparency.

As for Chronicle, it was one of the first Oracle providers on Ethereum but was only used in one place, MakerDAO. Since it was relaunched outside of MakerDAO in late 2023, Chronicle is being used on 10 new chains and by major players like Morpho, Euler, Gnosis Pay, Coinbase and Circle.

Niklas reckons as the industry grows and starts blending with traditional finance, it will be crucial for institutions to decide on a trusty Oracle partner. Providers with a good record in security, resilience, transparency and adapting to real-world change, “will win business”.

Source: Cointelegraph