What TradFi Needs to Make the Multichain Future a Reality

key takeaways

Pyth has largely grown its new clients organically through word-of-mouth
The oracle data and price-discovery provider says it has yet to see much of an impact from the market downturn

Cryptocurrency’s multichain future has a long ways to go in terms of providing consistent price discovery across the market. This uneven landscape is still rife with traders gauging discrepancies in valuation between protocols.

The crypto market needs a solution where institutional and retail traders alike can easily port and transact across blockchains of all ilks. Digital assets oracle provider Pyth, backed by the likes of Jump Crypto and Jane Street, has of late been increasingly gaining market share and laying out its own blueprint for how to accomplish just that.

The overarching picture, to an extent, has been complicated by regulatory uncertainty, especially in the US. But Pyth Director Mike Cahill told Blockworks the one-year-old startup, based on the Solana blockchain and its related private protocol solution, has been growing organically by word-of-mouth — in what Cahill views as a telling indicator of the importance of transparent, even-handed asset pricing across digital assets.

And that’s perhaps even more true through the lingering bear market.

Blockworks: Tell me about your business development. How’s that work?

Cahill: Yeah, so we basically have been really lucky about getting a lot of references from word-of-mouth. So, I think, by having a really strong core group — and this is what we kind of had envisioned — in terms of Jump to FTX to LMAX, Alameda, [they] were like the initial founders of the group.

And so, because you had such high caliber, there, it made it easy to convince others to join. And I think that’s been like the strategy from the tip. Full stop.

So, we can get into more of the growth on the supply-side, but on the demand-side, Pyth was like, well, this would be a proof of concept. We’ll run it on Solana. There’s market structure-type things that are important to be on the fastest blockchain — if you want to be the fastest in terms of blockchain scalability.

And, as soon as you’re not the fastest, you have the arbitrage open, right? So, someone comes in a little bit faster, every HFT [high-frequency trader] understands. So, we had to be on the fastest one, and if somebody created a faster blockchain, we’d have to figure out a way to be on that.

Blockworks: What you’re doing is fairly complicated, even by crypto standards. And Solana, in some ways, makes it more so.

Say prospective TradFi clients understand macro. They know a bit about Bitcoin, a bit about Ethereum. How do you explain this concept to them, from a business-development perspective, without running into language barriers?

Cahill: They understand that the space isn’t going away, and having somebody to guide them in — which is very de-risk from a reputational perspective, because you’ve got these other firms that are in — [gives them] their first step.

And, as you said, it’s not a trivial amount of technology work. Every one of these data providers is submitting prices and updating on-chain. They have to validate, or they have to interact with gas fees and things like that. And, so, we most certainly see this being a challenge for a lot of people to get over. And, I’d say that a lot of the trading partners that are involved don’t do much in crypto, this is the way they view [what needs to happen].

They don’t want to play leapfrog. So, let’s just put our flag in the ground and say we’re going to be joining this and see what it’s like, and we can ask the experts here — see how this gets done.

And as a result, you’ve now learned something. And, so, we get something kind of intangible out of it as well.

Blockworks: How has the current market downturn affected your business?

Cahill: Yeah. So, I think the roadmap for Pyth is pretty well-defined. In terms of the problems [we are trying to solve] that is pretty well-defined.

So, if you can get this really high-quality tooling out there, then no matter what excites people to go build stuff, they’re still going to need that tooling at some point. So, I’d say the only way that it really impacts something like Pyth is that as Pyth goes to more and more chains, which I think we see to varying levels of degrees of excitement.

Are people wanting to build decentralized applications [dapps] and use this as the main tooling purpose for professionals? So, we haven’t seen a huge fall-off interest of builders. Are you still seeing people migrate? It’s kind of funny that the pricing doesn’t represent this.

Blockworks: Can you elaborate?

Cahill: We want to go build stuff. And, so, yeah, we sort of ignore it. And I think that’s probably the right way to be when you’re building infrastructure — you’re just sort of betting that the whole ecosystem is going to grow.

This interview has been edited for length and clarity.

Mike Cahill is the director of the Pyth Data Association, the Swiss association behind Pyth, a decentralized oracle solution that ports financial data across asset classes on-chain. Based in Portugal, Cahill also serves as the head of European business development for digital assets at Jump Crypto, a Pyth data provider. Prior to joining Jump, Mike spent 13 years in foreign exchange roles at Cboe FX, KCG, Nomura and Morgan Stanley.

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