From: thepipeline_xyz
The evolution of blockchain technology has been significantly driven by continuous advancements in its underlying infrastructure, aiming to enhance performance, scalability, and efficiency [03:37:00]. This article explores the importance of robust infrastructure, key innovations, and the collaborative efforts driving the high-performance blockchain technology landscape.
Collaboration Between Monad and Pith
Mike Cahill, CEO of Doro Labs and Pith contributor, highlights a strong collaborative relationship between Monad and Pith, stemming from a shared focus on the intersection of finance and technology [02:41:00]. Both entities prioritize optimizations that require significant “hard tech” and a relentless pursuit of efficient systems [02:56:00]. This drive attracts individuals from systematic trading backgrounds, emphasizing the growing need for efficient infrastructure as valuable assets begin transacting on blockchains [03:12:00] [03:33:00].
Keone, CEO of Monad Labs, reinforces this synergy, citing shared values like decentralization and community as core drivers of their collaboration [05:53:00] [06:16:00].
Evolution of Blockchain Infrastructure
Early generations of blockchains served as proofs of concept [03:47:00]. Breakthroughs, such as Solana’s fast block times, set new industry standards [03:52:00]. Layer 2 solutions have since brought Ethereum Virtual Machine (EVM) compatibility to these performance attributes [04:00:00]. Monad is particularly exciting because it aims to offer similar synergistic opportunities found on platforms like Solana, but within an EVM layer, leveraging the existing EVM community ecosystem [04:09:00] [04:19:00]. This focus on performance is expected given the background of its founders from high-frequency trading [04:30:00].
Pith Network: A Universal Data Primitive
Pith’s mission is to establish a “source of truth at t0,” constantly striving for the most accurate and immediate data [07:30:00] [07:35:00]. It aims to build a “Universal data primitive” [07:59:00].
Differentiating from Traditional Oracles
Unlike many other “Oracles” that act as messaging protocols (e.g., Chainlink, Switchboard), fetching data from the internet via automation nodes [08:05:00] [28:50:00], Pith creates a singular source that data owners are incentivized to publish to directly [08:34:00] [10:44:00]. This approach borrows from trading infrastructure setups, aiming for predictive value at time t0 [08:42:00] [09:03:00].
Addressing the Changing Internet Business Model
Cahill notes a trend where data, once openly available (driven by Google’s advertising model), is increasingly moving behind paywalls [09:14:00] [09:52:00]. Large Language Models (LLMs) further exacerbate this by not routing traffic or providing citations, limiting the open internet’s ability to source data [10:16:00]. Pith addresses this by incentivizing data owners to publish their “paywall data” to its source, creating a powerful economic model that provides compensation for valuable data without relying on advertising [10:44:00] [11:09:00]. This direct sourcing means data is received directly from its creator, reducing latency and bringing it closer to the “t0” goal [11:47:00] [12:09:00].
Impact on Decentralized Finance (DeFi) and End-Users
Pith aims to provide applications and users with equal access to the same level of data [12:56:00]. Its application blockchain, PithNet, aggregates data from 100 publishers for 400 symbols, updating multiple times per second [26:52:00]. This data is then accessible to 50 connected blockchains and approximately 300 applications [27:11:00] [27:13:00].
For an end-user on a perpetual exchange (per Dex) on Monad, Pith provides constantly updating price data directly [13:29:00]. When a user executes a trade, the price is pulled onto the local chain, ensuring a bonafide, transparent transaction on Monad [13:40:00] [13:53:00]. A small fee collected for each data delivery is then distributed to the data contributors, ensuring a sustainable business model [14:00:00] [14:10:00] [27:23:00]. This protects against the risk of data sources being shut off due to unauthorized scraping, a common concern in the $7 billion real-time financial market data industry [14:31:00] [14:50:00].
High-Performance Oracles in DeFi
High-fidelity oracles are crucial for various DeFi primitives [23:20:00].
- Lending Protocols: They require precise pricing to maintain the safety of vaults and prevent issues like liquidations or negative value [23:26:00]. Accurate, aggregated price sources that consider confidence intervals are vital [24:06:00].
- Derivatives Contracts: These contracts rely on accurate pricing for settlement, and perpetuals, in particular, need highly accurate mark prices for funding rate calculations [24:35:00].
Currently, centralized exchanges often have lower execution costs [25:07:00]. Greater efficiency on the DeFi side, supported by accurate and up-to-date pricing from high-performance oracles like Pith, is necessary for DeFi to compete effectively with centralized finance and potentially “eat the rest of the world” [25:15:00] [25:27:00].
Institutional Adoption and Community Growth
Pith’s model encourages large financial institutions, including major trading firms (e.g., Jane Street, Susquehanna, Virtu, DRW) and exchanges (e.g., Cboe), to become publishers [15:01:00] [16:04:00]. These firms possess vast amounts of data, previously used mainly for internal model training, which Pith allows them to commercialize [15:13:00] [15:21:00]. This engagement forces institutions to learn and adapt to blockchain mechanics, such as submitting data on-chain and understanding tokens [16:47:00]. This represents a significant milestone, lowering the bar for future institutional involvement in blockchain technology, such as asset custody or on-chain trading [17:12:00].
Pith launched its token with a retrospective airdrop in November, involving 27 blockchains and approximately 100,000 eligible wallets [37:00:00] [37:10:00] [37:22:00]. The initiative aimed to decentralize governance and engage users in the project [37:34:00]. Currently, over 110,000 wallets are staking in the Pith protocol, demonstrating strong community belief and participation in decentralized infrastructure [37:51:00] [38:02:00]. This number is significantly higher than many established DeFi protocols, such as Aave (15,000 wallets), GMX (20,000), and Synthetix (40,000) [38:43:00].
Importance of Infrastructure for Future Growth
Mike Cahill emphasizes that infrastructure is the most important aspect of technological advancement [41:38:00]. He likens it to the development of the iPhone preceding applications like Uber; fundamental infrastructure must be in place before “killer apps” can emerge [41:50:00]. This aligns with Amara’s Law, where people tend to overestimate short-term technological impacts while underestimating long-term ones [41:12:00].
The ongoing improvements in blockchain infrastructure are leading to an “overnight success factor” similar to historical innovations like railroads, electricity, or the internet [42:25:00] [42:52:00]. Despite periods of perceived stagnation, foundational work continues beneath the surface, preparing for significant future growth [43:45:00] [43:55:00]. This focus on building better infrastructure promises to unlock new possibilities and lead to a more efficient, accessible, and inclusive financial system globally [32:00:00] [32:10:00].