Pyth Network, a provider of real-time market data for blockchain applications, has partnered with decentralized finance (DeFi)-centric development teams Morpho and Gauntlet to improve lending and borrowing experiences on Ethereum and Base.
The partnership aims to offer more efficient and secure lending protocols by using Pyth’s low-latency price data.
In a written Q&A with Cointelegraph, Michael Cahill, co-founder and CEO of Douro Labs, a core contributor to Pyth, stated that:
“Pyth Network’s low-latency price data provides DeFi protocols with the most current market prices, significantly reducing the risk of outdated information that can lead to incorrect pricing and transaction execution.”
Related: Pyth Network launches real-time market data on Hedera
Morpho lending overhaul
Morpho is introducing a lending platform to support permissionless market creation.
The platform facilitates entity pre-approval to “launch bespoke vaults” with custom risk management specifications.
Morpho aims to simplify DeFi yield management for investors and grant DeFi protocols flexibility in setting “liquidation loan-to-value (LTV) ratios, price oracles, collateral selection, caps and more.”
On the topic of Morpho’s contribution to the partnership, Cahill explained:
“Morpho’s Blue implements isolated lending vaults, enabling it to decouple from underlying incumbents such as Aave and Compound. It also builds on this concept by modularizing risk management, separating it from the underlying protocol and enabling curators to parameterize risk for each isolated vault.”
Related: DeFi Devs get real-time Bitcoin ETF data with Pyth Network
Gauntlet’s yield optimization
Gauntlet, a yield farming primitives creator and one of Morpho’s first approved vault operators, will operate a USD Coin (USDC) Core MetaMorpho Vault on Morpho.
Gauntlet aims to improve price data accuracy and reliability by integrating Pyth’s pull method price oracle, which actively acquires data from a source instead of passively receiving it.
Speaking about the importance of real-time price data, Cahill stated:
“The availability of real-time, high-frequency price data has driven the recent surge in high-throughput DeFi applications, including perpetual futures and onchain derivatives.”
Related: UwU Lend faces second hack during $20M reimbursement process
Impact of Pyth data feeds
Pyth’s data feeds, characterized by low-cost and high-frequency updates, can help secure and stabilize the informational feed provided to decentralized applications.
On the topic of data feed implications, Cahill explained:
“Lending protocols, such as Morpho, are more secure through the use of data that aggregates a large number of primary sources to provide robust and trustworthy price measurements. Such prices can be reliably used for collateral valuation, liquidation triggers and yield settings.”
Pyth currently has $7 billion in total value locked and provides price feeds to more than 350 DeFi protocols across various blockchains.
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