At 20:00 on the evening of November 30, Solana The development of oracles.
Armani, the founder of Backpack, said that now is the stage when we as an industry are maturing, and it is time to learn from the painful experiences of the past so that the entire industry can move forward. The system we hope to build is a long-lasting financial system. As the blockchain industry becomes an increasingly important part of the global financial industry, the Backpack exchange and ecosystem hope to become a core part of this evolution.
Ande, a core contributor to Pyth Network, said that based on Pyth, the logic of our development and innovation is to make the data more accurate and reliable, so that more ecological builders can obtain this data, and expand the users of the Pyth ecosystem to a greater extent. , so that everyone can be inspired to build the next generation of defi.
The following is a highlight review of this AMA:
Part 1 Backpack QA
Q1: Can you share some of your background and why you started the backpack project?
Armani / Can：Armani was one of the first developers after the solana mainnet was launched in 2020. At that time, there were not many developers in the ecosystem when he joined. Technically speaking, because this Solana software is different from other ecosystems, it is not easy to attract too many people. Therefore, it was established from the beginning as a set of software to help the development team with programming. It is difficult to develop on Solana, such as developing some contracts, but it becomes much easier after using his Anchor. By 2021, Armani has become a relatively well-known developer. At that time, many people told Armani that he should set up a company and create a team, so he started to develop some new things and started to build Backpack. . Fortunately, he quickly raised funds and hired a very good team.
Q2: What inspired you to start the mad lads NFT series? Compared with other NFT series, what is special about Mad Lads? Why can you become the top NFT player in the solana ecosystem in such a short period of time?
Armani/ Can：After completing the development of this smart contract level, Armani began to consider the development of the application level. NFT was particularly popular at the time, but everyones understanding of NFT was mainly PFP. Armani thought that in addition to PFP images, why cant we directly tokenize the code and put it on the chain. In this way, anyone with a wallet on Solana can directly use any application, so he created the xNFT standard. Then mad lads, the first xNFTs, were launched, creating a community that is now a very active one on solana.
Q3: After the successful launch of backpack wallet and mad lads, why do you want to start Backpack exchange? How do wallets, CEX, and NFT work together?
Armani/ Can：If we think about how to bring more people to the chain, a neutral exchange is the only way to go. Centralized exchanges are a channel for all users to participate in the web 3 industry. For example, the traditional financial industry has banks and exchanges, and the blockchain industry also has its own non-custodial wallets and on-chain exchanges. Centralized exchanges are a bridge between the traditional financial industry and the blockchain industry, allowing users who have never used blockchain to access web 3. So from Armanis perspective, if we want to build the best wallet in the world and bring as many people as possible from traditional finance to the chain, centralized exchanges are a must-have product. Whether it is technology, legal compliance, or community, we have a better team and community that allow us to build an exchange better, so we are prompted to build the exchange.
Q4: User funds are the issue that users are most concerned about. How does Backpack ensure the security of user funds? The underlying architecture of Backpack has some special features that distinguish it from other exchanges. Armani previously shared that backpack has a blockchain-like interactive experience. What is the long-term development goal of Backpack?
Ensuring the security of user funds is a diverse issue. From a macro perspective, traditional finance has experienced many runs and bankruptcies over the past few hundred years. A financial system that is used all over the world has been developed through hundreds of years of experience. It took a series of painful experiences to find ways to supervise and protect users, and ways to avoid similar things from happening. Traditional finance is not particularly perfect so far, but it can reduce risks to a great extent. The digital currency industry is similar to traditional finance. From its birth in 2009 to the present, Bitcoin has created the entire blockchain industry and brought some wonderful innovations to the world, including traceability, undeletion, and decentralized value transfer and storage. At the same time, it is a new financial product, causing many problems that we have encountered in the historical financial industry. Now is the time for us as an industry to mature and learn from the painful experiences of the past so that the entire industry can move forward. The system we want to build is a long-lasting financial system. As the blockchain industry becomes an increasingly important part of the global financial industry, the Backpack exchange and ecosystem hope to become a core part of this evolution.
Backpack mainly has two innovations to protect user assets. Many decentralized exchanges will not establish a compliant exchange like centralized exchanges, and many centralized exchanges will not use blockchain technology to ensure assets and privacy. What blockchain is best at is proving user assets and fund transfers, so when we established Backpack Exchange, we wanted to build a fully compliant exchange and at the same time, we wanted to embed blockchain technology into the exchange to ensure the security and safety of user assets. Retrospective.
From a technical perspective, there are two main points. The first point is that the state machine construction system of our entire exchange is similar to that of a decentralized public chain. We have multiple nodes, and user transactions require the consent of multiple nodes to pass. A hacker or employee cannot personally modify the state machine in the exchange, nor can he modify the value of any user or currency. Instead, he needs to use the nodes built by the entire exchange to reach a consensus before making changes. Because we use blockchain technology to build exchanges, we inherit many blockchain attributes. From the first day of the exchange, every transaction, deposit and withdrawal will be saved into the state machine and can be traced and cannot be modified.
The second point is proof of reserve, which is also what many other exchanges are doing. We are now working with Otter Security, the most famous technical auditor in the Solana ecosystem. The asset proof system of our upcoming function allows users to take out the Bakcpack wallet and verify it in the asset proof at any time. Eventually we hope to do it all the time, and initially we can do it every day. We understand that no other exchange can do this every day. So this is also the second point of our innovation. Some users care about privacy in transactions and identities. We use zero-knowledge proofs for all asset proofs to ensure that no one else can see the users transaction history and asset status except themselves.
Q5: Backpack is a compliant exchange. Why did you choose to obtain a compliance license from Dubai first? What is the future global compliance path?
Can: From a compliance perspective, Dubai is a relatively advanced country in the blockchain industry. In addition to Binance’s headquarters there, bybit, okx and crypto.com have all set up regional offices. The Dubai government also highly recommends virtual currencies. In the first half of this year, the UAE government announced its focus on making the UAE a new financial center. From a licensing perspective, Dubais regulatory authorities are relatively innovative in their supervision of digital currencies. The supervision of many countries applies the concepts of traditional financial supervision to virtual currencies rather bluntly. Of course, the lessons learned from traditional finance also need to be followed in the blockchain industry, but there are other aspects that cannot be applied. On the one hand, Dubais supervision ensures that many core concepts of traditional finance can be reasonably applied to the blockchain industry. On the other hand, it will not apply rigid concepts to the blockchain industry. Their supervision re-examines how to supervise the blockchain industry from the perspective of core concepts, such as protecting users and investors, ensuring market integrity and avoiding financial crimes. This is one of the reasons why we chose Dubai.
When it comes to our strategy, we have licenses in 5 countries. We are now in beta and will be able to serve 74% of the global market when we go live. Armani mentioned in his Breakpoint speech that we will be able to serve 95% of the global market by the end of 2024.
Q 6: During the last Pyth airdrop and issuance, backpack received complaints from some users, such as deposits and withdrawals being slow. What is the core reason? Has the team taken steps to improve user experience?
Armani：After backpack was launched, the user traffic exceeded our imagination. In the first hour when the SOL/USD trading pair went online, we traded approximately 150,000 SOL and 300,000 SOL was pledged. The trading volume of Backpack in the first hour exceeded the trading volume of all exchanges except Binance. Much more than we expected. We also processed more than 300,000 withdrawals and deposits, 170,000 deposits and 140,000 withdrawals. Thanks to the cooperation with Pyth, we have attracted many users to experience the Backpack exchange. There are also third-party service providers, such as chain analysis and other verification service providers, which have also received a large number of user requests. We still have a lot to improve, but through this opportunity we were able to make a series of optimizations on our infrastructure and front-end. It will provide users with a better experience next time.
Q7: When will the next large-scale exchange event be? Will there also be an airdrop of tokens?
Armani：Generally we dont do too much publicity before an event, so please stay tuned for our next event.
PART 2 Pyth Network QA
Ande: Pyth Network core contributor
Q1: Pyth Network is one of the most popular projects in the solana ecosystem recently. It is the leading oracle project. Can you briefly introduce the operating logic of the oracle? What are the special features or advantages of Pyth Network compared to Chainlink?
Pyth is currently the largest first-hand oracle network on the market, focusing on the continuous release of financial data in the market. Currently, Pyths data comes from more than 90 primary data providers, including some of the worlds largest exchanges, market makers, financial service providers, as well as funds and high-screen trading institutions, providing various asset types to the Pyth network. The data. The data includes not only virtual currencies, but also stocks, precious metals, and more. Asset price feed data can be seen on the Pyth Network for over 250 assets in total, and price feed data for these assets are available on more than 40 blockchains, with price update delays of less than one second most of the time. Dapps can integrate price feed data on various blockchains, and can directly apply price feed data in transaction settlement, asset valuation, and user risk management systems. The oracle itself is a facility that connects on-chain data to the off-chain world. The blockchain itself cannot obtain off-chain data, but financial scenarios on the chain need to use these offline data. The oracle machine serves as the intermediate infrastructure to complete this task, allowing us to have a world of big data, high-frequency transactions, and continuous data updates on the chain. Pyth launched the solana mainnet in April 2021 and built it in the entire web 3 space. It has been more than two years now, and it also moved to cross-chain last year. In a year or two, Pyth can transmit data to more than 40 chains from the original Solana chain, and more than 200 Dapps integrate and use Pyth data.
There are already some oracles on the chain, so why do we need new oracles? Obviously, Pyth Network is not the first oracle on the chain. However, Pyth began to conceive of this on-chain project during the Defi summer of 2021 to explore whether the oracle machine on the chain can meet the data needs on the chain. The actual problem is that as Defi continues to develop, we find that the gap in on-chain oracles has greatly hindered the expected development of the blockchain. In the world of the first generation of traditional oracles, blockchains with oracle services do not have ultra-low latency, institutional-level market data oracles. For web 3 developers, this gap mainly has three aspects:
1) Speed: For many on-chain products, the speed of the oracle is not fast enough. If you want to settle a perps order, the price provided by your order has a delay of three to four seconds or even longer. Traditional oracles can only update the price feed data every 10 minutes or 50 minutes. This is unacceptable for the execution of frequency transactions. During such a long delay, price fluctuations become very large. The settings of traditional oracles cannot adapt to the increasingly innovative defi financial scenarios.
2) Issues of asset coverage and availability and whether assets can be listed on multiple chains at the same time: Traditional oracles may have 200 to 300 price feed data on Ethereum, but if they want to cross to a new chain, such as Solana For the new layer 1 and layer 2 of Optimism, they must be redeployed before they can be deployed in new ecosystems or new blockchains. This will bring about very large future scalability and price feed issues. In other words, in the future, 100 to 200 sets of operation and maintenance processes will need to be carried out in 100 to 200 ecosystems at the same time to put cross-chain data online into different ecosystems at the same time. With more and more price feeds, the operating costs of the oracle will become higher and higher, further limiting scalability. Traditional oracles cannot adapt to the current mass adoption narrative. In the future trend of mass adoption, oracles will not be able to meet the demand.
3) It is a matter of data source and data quality. Obtain data from third parties or data sources that cannot be verified. For high-frequency trading and the new generation of innovative defi, we need data that is not only fast, but also accurate and accurate. A change of 3 to 4 decimal places can affect the puzzle solving and profitability of high-frequency trading. We must ensure data sources and data quality. However, the way third-party data sources are reported cannot guarantee data quality.
For Pyth, we hope to update the oracle service from these three perspectives to meet the construction of the next generation of defi.
For these three issues, Pyth designed a data model for cross-chain transmission. At the same time, we designed an own app chain. Based on Solana technology, we specially forked a Solana virtual machine specifically for Pyth price feed data integration and release. Relying on Solanas highest frequency data and update speed, we have a complete set of Solana technologies. This chain is dedicated to data processing and will not be affected by other external factors. On this exclusive app chain, we obtain the data published by all publishers to us and perform algorithmic data processing. After completing the data processing, Pyth will deploy a price receiver (price server) on each different ecosystem blockchain. The price receivers on each chain will be provided based on demand. If there are defi applications on the entire chain that want to obtain Pyth data, they will send a request to update the data to the price receiver, and the price receiver will directly transfer the data on Pyth. Publish to the application corresponding to the ecosystem blockchain. There are several great advantages to doing this. In terms of speed, because we have the speed of Solana, each price feed update can reach 400 milliseconds, and the data on Pyth can be updated two to three times in one second. The second point is that because our data uses a data model that is pulled on demand, Pyth can update the data on Pythnet with a sudoku of 400 milliseconds. In various ecosystems, once you need to use large amounts of data , you directly get the data from Python through the fetch command. This not only ensures that the data is fast and accurate, but also ensures that on any blockchain, as long as there is an application that wants to use price feed data, it will not be because the corresponding price feed is only online in a specific ecosystem and not in a new ecosystem. Going online creates scalability limitations. The third aspect is the reliability of data. Pyth only allows data owners, that is, these first-hand data providers, to publish data to the network, so the reliability and quality of data are guaranteed to a certain extent. The owners of these first-hand data are almost all very large financial institutions in the financial market, and the data they have come from part of their daily work or daily transaction execution. In this case, the reliability of the data can be guaranteed. and accuracy. In addition, there are some security solutions including permissionless authentication methods and how to enroll a new data publisher and other mechanisms to ensure data quality and reliability, while ensuring speed and scalability.
Q2: Pyth Network has conducted airdrops to many users who have interacted with the entire network. Can you share the airdrop logic? Why is the airdrop implemented with such a strategy?
The core logic of the airdrop is to incentivize the entire Pyth Network ecosystem, including not only those using the Pyth protocol, but also upstream data providers and data publishers, as well as users who actually use these applications in defi. We hope to inspire all individuals in the Pyth ecosystem and let us work together to build the future of defi. Protocols that actually apply these high-quality data in the downstream can get some incentives, and users who actually conduct transactions in these protocols or use next-generation defi applications can also get incentives. For upstream publishers, be rewarded for providing reliable and accurate data. Therefore, the purpose of short selling is to positively encourage the entire ecosystem to develop towards a better future. We can see that the results of the short position are also impressive. The entire short position should be the most extensive and largest short position in the crypto space. Users of more than 10 blockchains using Pyth Dapps have made short positions, and There are 95,000 wallets that have qualified and claimed short positions. At the same time, this short position is still open for redemption. If you have not claimed it yet and are eligible, you can go to the Pyth official website interface to check and claim it within 90 days of the airdrop opening.
Q3: What are the subsequent plans of Pyth Network after the token issuance? Where will the market and technology focus be in the future?
There have been no adjustments to our subsequent technical plans since the Listing, and all technical aspects are under normal development. Based on Pyth. The logic of our development and innovation is nothing more than a few things: making the data more accurate and reliable, allowing more ecological builders to obtain this data, expanding the users of the Pyth ecosystem to a greater extent, and allowing everyone to be incentivized to contribute. The next generation of defi is being built. All our development revolves around this process. In the future, you can look forward to more price feed data coming online in Pyth. These price feeds include not only virtual currency data, but also foreign exchange, commodity and stock data. We can imagine that more defi financial usage scenarios will be generated on the chain in the future. Second, Pyth will launch more products. Oracles are not limited to finance, but can also contribute other strengths to the ecosystem, including providing better risk management tools. There are also ecosystems that require not only financial data, but also weather, random numbers, and many other types of data. We are constantly building on both product and network reliability.
Q4: Why did you choose to cooperate with backpack and airdrop to users through backpack during the launch?
Our core business started with Solana. The entire Solana ecosystem is a very mutually supportive community atmosphere, not only among developers, but also between protocols and protocols, or between teams. Not only are we partners in work, we also communicate in many different places, thinking about the next step in technology, and at the same time supporting each others technology development and market construction. Collaboration between Backpack and Python is a natural progression. The Backpack exchange is about to be released, and the Python listing is also developing at the same time. We are leveraging each others strengths. This is something that benefits everyone.
