Tutorial: Use the Pyth oracle for DeFi applications on Etherlink
Etherlink is great for DeFi applications because of its low latency, fast confirmation times, and low fees. This tutorial shows you how to set up a simple application that gets market information from Pyth and makes trading decisions based on those prices.
Pyth is a network of oracles, which provide information about currency prices and other market data to smart contracts. As described in Oracles on docs.tezos.com, smart contracts cannot call external APIs, so they depend on oracles for information about the world outside the blockchain. Smart contracts must call oracles in a specific way and pay fees to use them.
This tutorial is an adaptation of this Pyth tutorial for Etherlink and its sandbox development environment: https://docs.pyth.network/price-feeds/create-your-first-pyth-app/evm/part-1
Learning objectives
In this tutorial, you learn how to:
- Start and use the Etherlink sandbox environment
- Call the Pyth DeFi oracle
- Use the Foundry toolkit to build, test, and deploy a smart contract to Etherlink
- Call an oracle from a smart contract
- Call the smart contract from an off-chain application
- Make basic buy and sell decisions based on the information from the oracle
Tutorial application
The application that you create in this tutorial has an on-chain component in the form of a smart contract deployed to Etherlink. It also has an off-chain component in the form of a Node.JS application that calls the smart contract.
The code for the completed application is in this GitHub repository: https://github.com/trilitech/tutorial-applications/tree/main/etherlink-defi.
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