Abstract
The Pyth token suffers from over supply absent demand which has seen network value and stakeholder value plummet endlessly despite network progress and efforts to stem the fall in price. The solution to this endless value loss is by adding Pyth token utility.
Token utility can either be active in the case of gas fees, or it can be passive where the token is not used to perform a task but is used to obtain a desired benefit. In this case, the Pyth token can be given passive utility by requiring price feed clients to purchase and hold Pyth tokens in a reserve account in order to obtain discounted fees for Pyth services.
Implementation
Pyth will inevitably raise service fee prices to grow the revenue over time. This is limited by competitor pricing and what the market is willing to pay for the service.
Pyth can raise the fee price while offering fee discounts to clients who hold Pyth tokens in a reserve account.
The requirement for the discounted fee (i.e. at the current price they pay or less) is they need to purchase and hold X number of Pyth tokens in reserve. Let’s say 50-100 million Pyth tokens (up for discussion).
This in effect keeps the customer happy with the rates. Causes a substantial increase in the price of the Pyth token which returns value to stakeholders.
Everybody wins.
You might use this promotion fee structure for Pyth Pro price increases in the future. The discounted price requires holding X number of Pyth tokens in a reserve account. The holder becomes a stake holder and gets a discounted fee.
In addition, you might even have discounted fees that scales with the number of Pyth tokens held in reserve.
The client gets discounted service fees and acquires Pyth tokens as an asset that appreciates over time. Their Pyth reserve holdings could become worth many times more than all the service fees they ever paid.
Thus, adding passive Pyth token utility in this scenario is likely to produce substantial increases to network value, keep clients invested in the network, while providing clients with service fees they will happily accept. Clients would more readily accept higher fees if they are invested in the network.
As soon as this is implemented, clients are likely to rush in to buy at the current price levels causing the price to spike up on a run to $1 (guess).
Uncertainties
The relationship between the amount of Pyth tokens a client must buy and hold in reserve and the service fee discount rate would need to be analyzed and decided upon by the council.