A glitch in the crypto data network Pyth’s platform triggered an almost 90% decrease in Bitcoin price on Monday. Although for a short time. This bug affected no other platform.
The Bizzare Bitcoin Price Drop
Bitcoin’s price was $5,402 on the Pyth platform at 5:50 p.m. Monday, when it was trading around $41,000 on large, centralised exchanges.
Pyth draws market data from exchanges and traders to offer price information to DeFi developers. Pyth is in affiliation with some of the top names in cryptocurrencies and finance with the real-time market data supplier.
It gets its information from companies like Sam-Bankman Fried’s FTX, CoinShares, Jane Street, Jump Trading Group, and Virtu Financial.
Root of the Problem
On Wednesday, Pyth issued a report on the incident’s root cause analysis. Therefore, describing how a combination of two causes triggered the flash crash.
“The problem was caused by a combination of two different Pyth publishers publishing a near-zero price for BTC/USD and the aggregation logic overweighting these publishers’ contributions, and both publishers encountered problems handling decimal numbers”.
The original publisher made a mistake and reported the price of Bitcoin as a floating-point number instead of an integer. The utility published the integer 0 after converting the floating-point value to it.
According to the study, the second publisher experienced a race condition between two programmes. Therefore causing them to read an exponent of 0 for BTC/USD instead of 10-8 for the 2-minute timeframe of the event.
“This incident impacted several Solana programs relying on Pyth prices,” Pyth noted in the post.
According to Pyth, developers are making various improvements to the platform to decrease the possibilities of it presenting erroneous pricing due to technical faults. It also stated that they are enhancing monitoring tools to assist publishers in responding promptly to abnormal data.
The Flak Received
Even though the pricing of Bitcoin on the site reverted to normal on Tuesday, Pyth received much flak on social media.
One internet user wondered how Pyth was still operational: In a tweet, LinkGeneraI added, “It’s a complete liability to have even the smallest potential for that to happen again.”
The flash crash “caused a series of liquidation events on the Audaces protocol BTC-PERP market (unfortunately working as intended),” according to Bonfida, a Solana-based initiative. Bonfida’s perpetual futures platform, Audaces, is a liquidation engine.
Pyth has run into difficulty for the second time in a short period. The network had been down for 17 hours last week.