KEY TAKEAWAYS
- Pyth Network launches Pyth Energy Feeds to provide reliable price data for energy assets like WTI and Brent crude oil.
- This initiative aims to integrate traditional markets with DeFi, expanding the scope to include real-world assets such as energy commodities.
- On-chain price feeds for energy assets are expected to attract institutional investors, enhancing DeFi’s reach and impact.
- Developers are advised to use a weighted average of multiple month feeds for accurate data integration.
Pyth Network has announced the launch of Pyth Energy Feeds, a new initiative aimed at delivering reliable price data for energy assets such as West Texas Intermediate (WTI) and Brent crude oil. This development is part of Pyth’s broader mission to expand the scope of decentralized finance (DeFi) beyond cryptocurrencies to include real-world assets (RWAs) like energy commodities, metals, equities, and exchange-traded funds (ETFs).
The introduction of energy assets into DeFi is seen as a significant step towards integrating traditional markets with decentralized systems. The energy sector, with its market valuations in the trillions, presents a substantial opportunity for growth and legitimacy within the DeFi space. By providing on-chain price feeds for WTI and Brent, Pyth Network aims to attract institutional investors interested in deploying capital on-chain, thereby expanding the industry’s reach and impact.
Key Advantages of On-Chain Energy Price Feeds
Developers can now integrate WTI and Brent price feeds from Pyth Network’s comprehensive suite. The process for WTI Crude Oil involves an automatic roll of futures after expiry, typically 3-4 days before the 25th of each month. For Brent Crude Oil, the roll occurs 1-3 days before the end of each month. This automatic transition ensures that data sourcing continues seamlessly from the new contract at the next market open.
For developers looking to integrate these feeds, it is recommended to avoid relying solely on the 1-month expiry price feed due to potential liquidity issues as expiration approaches. Instead, a weighted average across the 1-month, 2-month, and 3-month feeds is advised for more accurate results. Alternatively, developers can consider using the USOILSPOT or UKOILSPOT price feeds, which offer a more streamlined solution by eliminating the need for a weighting mechanism.
Expanding DeFi’s Reach
The launch of Pyth Energy Feeds is designed to drive innovation and support the evolution of a global financial system. By enabling the integration of traditional energy assets into DeFi, Pyth Network is paving the way for new markets and enhancing existing ones. This initiative aligns with Pyth’s goal of collecting comprehensive price data to power a truly accessible global financial system.
For more information on Pyth Energy Feeds, visit the official announcement here.
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