Solana-based data network Pyth says a bug caused bitcoin’s price to crash 90% to $5,402 on its feed to DeFi developers

Pyth Network, a provider of real-time market data, stated Wednesday that a bug led to an error in its feed to DeFi developers. This caused a significant incorrect price for Bitcoin. This affected many solana-run project.

The network, which is connected to some the most prominent names in crypto and finance, saw a drop of approximately 90% for bitcoin to $5.402 Monday. The token traded on other platforms for $43,000, a drop of 8%.

Pyth, which was launched on the solana Blockchain, provides pricing information for DeFi developers’ smart contract. It draws on market activity data from professional traders and exchanges. Its data sources are Sam-Bankman Fried’s FTX and CoinShares, Jane Street’s Jump Trading Group, Virtu Financial, and Virtu Financial.

Pyth explained what went wrong in a Medium post. He said that the bitcoin pricing scandal was caused by two factors: two data suppliers publishing a close-zero price for tokens, and the network’s aggregation tool giving too much weight these contributions.

Pyth stated that data providers encountered problems with decimals being handled.

It stated that “Several Solana programs that depend on Pyth prices were affected by this incident”, in a post.

“The impact was magnified by some programs that relied on the aggregate price feed without using confidence (metric), which allowed liquidations even though the published price was uncertain.

Bonfida is a project that was built on solana. tweeted Monday that the price drop had ’caused several liquidation events on Audaces protocol BTC–PERP market (unfortunately not working as intended). Audaces, a liquidation engine and Bonfida’s perpetual futures platform, is an example of this.

Pyth stated that core developers are working to minimize the chance of software errors generating incorrect prices. They also improve monitoring tools.

On Wednesday, Bitcoin’s price returned back to normal. It was last at $42,322. This week’s decline in bitcoin was caused by concerns about Evergrande’s debt crisis .

The error in Pyth’s decentralized systems caused heavy backlash via Twitter. Some were even questioned as to why Pyth is still in operation.

According to Pyth’s website, the firm has partnered with twenty trading firms, exchanges and market makers as data providers. It announced Tuesday that it had partnered with digital assets merchant Bank Galaxy Digital in order to provide data to its DeFi traders.