How Do Markets Evolve When Finance Never Sleeps?

Transcript

[applause] >> All right. Everyone, I am Mike Cahill. I'm the CEO of Doral Labs. We're the ones building the Pith network. Here we go. I got my clicker here. All right, so I'm going to talk to you about Pith network, about the price of everything, and how we make it accessible to everyone, and why does the market need a new price setup? So, there's a couple of things I want to go through. First, what is the problem that Pith was set out to solve? And why are the infrastructure around market prices broken?

And then we're going to talk a little bit about where Pith is today, how big we've gotten to, and a little bit around who's been building on the network, and where the data is coming from. And then finally, we're going to go through some of the product verticals, and talk a little bit about new one that we're launching today. So, a couple of years ago, about 5 years ago, I was working at Jump Trading with my co-founders Jan and Kieran, and we went really deep into market infrastructure, namely because there was a whole lot of activity going on chain. And we were trying to figure out how is it going to be that we're going to get to a global harmonized market where you could trade real worth world worth assets off chain, on chain, without any distribution

problems. And the place that we found to be the biggest bottleneck was around financial market data. So, we went down the rabbit hole. Now, the financial market data industry is very big. It's about $50 billion of revenue per year, and it is very siloed and fragmented. It's a bit of a mess. If you were to ask anybody who works in the financial industry something about market data, they're going to tell you something about Bloomberg. And Bloomberg charges $30,000 per seat, And that's kind of the basic cable package. If you want any real data, you need to basically pay for all those additional premium channels. So, CME real-time, NASDAQ level two data, ICE, etc., etc.

Now, if you go around the world, you end up having hundreds of data vendors and relationships with all of them. And you have to go through an audit with every single one of them. Sometimes it's difficult. They're in jurisdictions where they're tough to access. So, it really is a mess. But, the reason why it hasn't been exposed before as a mess is because it worked pretty well for the existing markets. But, it doesn't work if you get into a blockchain-based cleared market. So, blockchains enable a global market without geographical constraints.

They're programmable by nature, which means that if you were going to bring information on chain, you need to do so in a way that preserves the trust of the network. So, cryptographic proofs coming on chain so that you can use the network because it's programmable. And finally, it's 24/7, right? So, there's no operating people or operating company around blockchains. It's validators, networks, and so they're 24/7. So, this is what Pip was set out to to build, and it's a very simple marketplace model, right? So, on the one hand, you've got data publishers.

On the other hand, you've got consumers. And then in the middle, what Pip does is it aggregates together the information, and during that aggregation process, it's able to preserve the trust and publish a proof to any of the blockchains. Now, in order to create a network of publishers that wasn't like the Bloomberg model, we had to rethink it from first principles. If we were buying data from the NASDAQs or the CME, we would be limited to the same constraints that they are limited to today. So, we thought this from first principles and came up with a the model. The big unlock for us was that there are troves of big trading firms who've got access to super high quality data. They've never monetized it before. It's a byproduct of

their business. So, think about the Jump Tradings, the Jane Streets, the Susquehannas. So, the first order of business was to go to them and get them to contribute data to the network. Now, of course, none of them is going to have individually as much data as the entire exchange. So, we can stitch them all together. We anonymize it, make it available. So, that was the model. And a lot of people like to give the shorthand for Pyth as being an oracle. Now, that is true that when we create the cryptographic proof that is now usable on chain. And that's how I think about an oracle. But, it's actually much bigger than that. It's the infrastructure and it's an entirely new price level, price creation that's never actually been done before. It's the first time anyone has created an original price

source. So, the scale of it now has gotten pretty pretty impressive. We've got over 100 institutions who provide their data. The proofs are set up to be able to be delivered to over 100 different blockchains. Every asset class is covered. So, crypto data, equities, global equities, FX, commodities, futures, you name it. And collectively, this is powered over 60% of the perpetuals markets using the Pyth data to be able to create funding.

That adds up to $3 trillion in transaction volume, over 700 enterprises have been built, and we're counting at over 3,000 different symbols. Now, let's go into a little bit on the publishing side of network. Cuz if you want to create a network that has every asset, you need to be very deliberate on how you're going to source them. So, we've partnered with the best of each of these categories. On the crypto category, it's got finance, OKX, Bybit, all the on-chain DEXes, the Wintermutes, the Flowdesks.

So, it's very easy to be able to go out and source a new product. For US equities, for example, it's the Virtu and Jumps and Cboe Global Markets and on and on. And this gives us the very unique ability to be able to question our network of publishers for any asset that somebody wants to trade, be it Japanese equities or Indian equities or base metals. Now, we're going to get into the products a little bit. So, there's three product verticals that Pyth has.

The first one is the most similar to a Spotify. If we think about the original model that I described with Bloomberg as a basic cable and you're buying premium cable subscriptions through it, our vision is that Pyth can be the Spotify for financial market data. It's one subscription, keeps getting better every month, has ever-growing catalog. That's called Pyth Pro. That's the marquee product for Pyth to be able to create market data that gives builders the license to be able to use that data, either on-chain or off-chain. Then we have a data marketplace, and this looks a little bit more similar to a distributor like a Databricks or a Bloomberg, except for the fact that we provide the cryptographic proof so that

a distributor can use their data to sell to an audience that actually needs that data on- chain. And the final one is for 24/7 markets. This is what we're going to get into today. It's around creating indices for markets that historically have never been 24/7, so that you can get trading that actually does occur on 24/7 basis. Now, underlying all of this is the Pyth terminal. And so, you basically can get access to all of these products under a single self-service website. Pyth terminal allows you to look up all the products, see some comparative benchmarks, do some analysis, and then of course manage your subscription.

Earlier this year, Pith Pro started selling these premium services, premium subscription products. We've been adding a million a month of ARR every single month this year. We're scaling at a baseline to $12 million, but we expect that with some of the products that are rolling out, we'll be more likely around the $20 million of ARR by the end of this year. But what's most interesting about it is while we were set up to provide data for blockchain users, and we think we're the only place where you can actually get a lot of data for blockchain users there, we're finding the verticals where there's no interest in our on-chain proofs. It's just around the data. So, one great example of this is Pith powers

the financial markets event markets for for Kalshi, none of which require an on-chain verification. They just need a data package that is going to be ever expansive and allows them to distribute data to their end clients to trade so that they know exactly what the resolution market's going to be. >> For 45 years, financial data has been fragmented, expensive, and stuck in the past. Until now.

Pith Pro, one platform for equities, crypto, >> [music] >> FX, commodities. Every asset class you need, one platform, [music] one fee, every market. Pith Pro, better market data by design. >> [music] >> All right. Um just to remind you of some of the scale that we have. So, there's over 700 enterprises that are using Pith data today. There is 138 institutions that are providing their data. This includes some of the biggest names in the financial markets.

It's provable on over 100 blockchains and covers already 60% of the on-chain financial market. This scale has already reached a massive amount. Now, marketplace is, as I mentioned, a way to distribute data from a third party using the Pyth rails and publishing on blockchain. This all came about through a collaboration that we did with the US Department of Commerce last year. It was their intention to publish the GDP on various blockchains. So, we worked with them and we did. It was the very first time that we published data that wasn't Pyth data. It was clearly the US government's data.

And then we started to get some other inbounds and we realized that there's actually a product here. So, if an exchange or a large intellectual property owner has a set of data that they want to make available to a blockchain user, we've created this product for them. We just launched it with seven institutional marketplaces or uh publishers on the marketplace. This includes Euronext, SGX, OTC Markets, EDI for all the corporate actions data, and that'll continue to grow. We expect that to be a pretty big growth area for us. And then finally, we're going to talk a little bit about our new 24/7 markets.

Good news is that these are going to change the state of finance. The bad news is it's probably going to eat away your weekend. So, 24/7 markets are constructed using Pyth proprietary data feeds, but harmonizing together in a seamless fashion when data's when when markets are traded off-chain on the 24/5 or on the market hour five that basis, as well as whatever was traded on chain. If it's X stocks or if it's traded on trade XYZ. And Pyth now creates these indices with weights that makes it seamless to be able to them out.

Few weeks ago, we experimented with rolling out Pith oil and the demand was insatiable. So, we've been able to expand this now to many other areas, US equities, metals, futures, and FX. So now I'll show you another little video. And finally, to ruin your vacations even further,

Okay. All right. So, we're launching these this week. Uh tomorrow officially be announced. Um with Coinbase, Kraken, DYDX, Market Vector as the first users. These are going to be 24/7 unique Pith indices. And look, Pith was designed to be able to modernize markets. We think that doing so on a 24-hour basis is going to be the norm. And indices is just one of the ways to get us there. All right. Thanks everyone so much for the time. >> [applause]