Douro Labs proposes enabling PYTH token payments (in addition to USDC) for all DAO revenue distributions from:
Pyth Pro subscriptions
Listing as a Service (LaaS)
Pyth Data Marketplace
As part of this change, we also propose formalizing Pyth Pro governance within the DAO Constitution, bringing it to parity with the existing Marketplace Governance section.
Motivation
Current State
Today, all revenue distributions from Douro Labs to the Pyth DAO are paid in USDC:
Pyth Pro: 60% of subscription revenue → DAO (per CO-PIP-9)
LaaS: 90% of listing fees → DAO (per OP-PIP-98)
Marketplace: 60% of proceeds → DAO (per CO-PIP-99)
The DAO then uses a portion of its USDC treasury to acquire PYTH tokens through a multi-step process:
Monthly OP-PIP to authorize 1/3 treasury transfer to Pythian Council multisig
Pythian Council executes DCA purchases via Squads
Squads charges fees on trades (~0.1%)
Purchases execute against onchain PYTH liquidity
The Opportunity
Allowing Douro Labs to also pay in PYTH (or a USDC/PYTH combination) would benefit the DAO by:
Smaller token purchases — When revenue arrives directly in PYTH, the DAO executes smaller purchases against thinner onchain liquidity
Reducing intermediary fees — Lower Squads DCA fees on the portion received directly in PYTH
More accurate pricing — Pyth Pro’s aggregated PYTH/USD price reflects broader market liquidity vs thin onchain pools
What About the PYTH Reserve Program?
The existing PYTH token purchase program (OP-PIP-87) continues unchanged. The 1/3 monthly rule stays the same — it simply operates on a smaller USDC base as more revenue arrives in PYTH. Revenue from Pyth Core, Entropy, and Express Relay continues to flow in as USDC, maintaining the token purchase program. It is important to note Douro Labs may still continue paying Pyth Pro, LaaS and/or marketplace in USDC.
Proposal
Payment Flexibility
Allow Douro Labs to pay DAO revenue distributions in:
USDC; or
PYTH tokens; or
A combination thereof
When paying fully or partially in PYTH:
Pricing: The PYTH amount is calculated using the average daily price closest to midnight of the Pyth Pro PYTH/USD price feed across all calendar days in the payment month.
Minimum Value Guarantee: The PYTH amount delivered cannot be less than the USD-equivalent value calculated above.
Combined Payments: When paying in a combination of USDC and PYTH, the total USD value owed to the DAO is first determined. The USDC portion is paid at face value. The remaining balance is converted to PYTH using the pricing mechanism above. For example: if the DAO is owed $100,000 and Douro pays $40,000 USDC, the remaining $60,000 is converted to PYTH at the monthly average price.
This applies to:
Pyth Pro subscriptions (60% DAO share)
Listing as a Service proceeds (90% DAO share)
Pyth Data Marketplace proceeds (60% DAO share)
2. Constitution Amendment — Pyth Pro Governance
Currently, the DAO Constitution includes detailed governance for the Pyth Data Marketplace . We propose adding a detailed Pyth Pro Governance section that:
Formalizes the operator assignment
Codifies the revenue distribution (including LaaS)
Establishes payment terms and currency flexibility
Defines reporting requirements
Specifies termination provisions
This brings Pyth Pro to constitutional parity with the Marketplace.
What This Does NOT Change
Revenue share percentages remain unchanged (60/40 for Pro/Marketplace, 90/10 for LaaS)
Giving Douro the ability to Pay in PYTH is a great step towards unlocking more token utility and potentially reducing our exposure to slippage and trading fees when executing trades for the Reserve. I ultimately see this as a net positive for flexibility with our Organisation and our Contributors.
However, as a member of the DAO, I would prefer to see a minimum 1/3 of the DAO’s share in $PYTH (For the Reserve) enforced instead of “the ability to”. This would eliminate the need to perform trades by the Council, and therefore, the risks and costs associated therein.
[quote=“zenyas, post:1, topic:2470”]
Minimum Value Guarantee: The PYTH amount delivered cannot be less than the USD-equivalent value calculated above.
[/quote] the averaging method is also very practical during times of volatility, and the above quote ensures fairness and transparency.
It would be good if we included “Douro shows their working” for the averaging calculations. This would potentially help DAO members compare at a glance rather than individually going through the data. Perhaps we could also consider the use a median approach rather than a strict mean average.
Just want to make sure I understand your second point correctly — are you suggesting that Douro should be required to distribute at least 1/3 of Pyth Pro/LaaS/Marketplace revenue in PYTH tokens each month (with flexibility to go higher)?
If so, I’d note that even with such a requirement, the monthly DAO token purchases via the Pythian Council would still continue. Here’s why:
The Pyth DAO has multiple revenue streams beyond Pro/LaaS/Marketplace:
Pyth Express Relay contract fees
Entropy fees
Pyth Core update fees
These fees are repatriated to the DAO treasury on Solana and arrive as USDC. So even if 100% of Pro revenue came in as PYTH, the DAO would still accumulate USDC from these other sources — and the monthly purchase program (OP-PIP-87) would continue operating on that base.
This proposal isn’t aiming to change the monthly purchase mechanism itself, just to add flexibility on how Douro can settle its share obligations.
On your transparency point — absolutely, Douro is happy to provide the underlying data for the monthly TWAP calculation. We’d share:
Daily PYTH/USD prices from the Pyth price feed (one per calendar day at midnight
The simple average across all ~30 data points for the month
This way any DAO member can independently verify the math.
As an option, this is a great idea and I fully support it. I don’t think it’s even a matter for debate. If the goal is simply to provide Douro with more flexibility, then it’s a no-brainer.
However, if the goal is to offload the burden from the DAO regarding PYTH purchases during periods of low on-chain liquidity, reduce fees, and ensure more accurate pricing, that’s a different story. Having the OPPORTUNITY to pay in PYTH token doesn’t necessarily solve these issues, as Douro could still choose to distribute revenue entirely in USDC every time.
We could monitor how much Douro actually distributes in PYTH over the next few months. Based on that data, we could then determine whether there’s a need to formalize a requirement for them to distribute a certain portion in PYTH. Specifically, we could establish a threshold where at least a certain percentage of the total distribution must be paid in PYTH token
First off, thank you for putting this forward and for the continued hard work that has brought Pyth to where it is today. By any measure, Douro Labs deserves to benefit the most from Pyth’s success, and I fully support finding ways for Douro to do so and/or optimize its operations, provided those ways are also clearly beneficial to the DAO and all PYTH stakeholders.
That said, I want to highlight a key point for consideration:
Under this proposal, the DAO would receive PYTH directly from Douro’s holdings instead of receiving USDC that the DAO then uses to buy PYTH on the open market. This effectively means the DAO is absorbing Douro’s PYTH tokens that would otherwise have been held, sold, or used elsewhere, while reducing market buy pressure that would have come from the 33% treasury buyback program on that portion of revenue.
I’m not questioning anyone’s intentions. These dynamics are natural given Douro’s dual role as operator and major token holder. However, they do create a potential misalignment of interests.
This may also be a good moment to explore other solutions, such as executing buybacks via CEXes, where liquidity is significantly deeper. I recognize the operational challenges involved but that is perhaps something that the Pythian Council could explore. This proposal also highlights PYTH’s thin liquidity - an issue the DAO should proactively address, though that may be outside the scope of this discussion.