PYTH buybacks in order to incentivize long-term growth

Ideas Bank
1

With the constant growth of protocols using pyth price feeds, as result the revenue also increases.

According to GPT this is the types of revenue streams pyth currently has:

1. Fees from Pyth Data Feeds (Pull Oracle Model)

  • Pyth operates on a pull oracle model, where users (DeFi protocols, dApps, and traders) pay to access real-time price feeds.
  • Every time a blockchain application requests and consumes Pyth’s price feeds, they pay a fee to the network.
  • This fee is distributed among data providers and stakers who support the network.

2. Pythnet Transaction Fees

  • Pyth runs on its own specialized blockchain, Pythnet, which helps relay price data across multiple chains.
  • When users interact with Pythnet (e.g., fetching data from Pyth’s oracle services), they pay fees in PYTH tokens or other supported assets.

3. Revenue from Institutional & TradFi Partnerships

  • Pyth partners with traditional financial firms and institutional players (market makers, exchanges, and hedge funds).
  • These institutions contribute high-quality price data and, in return, get a share of the revenue when their data is used by DeFi protocols.
  • Example: A crypto exchange or DeFi protocol using Pyth’s price feeds pays fees, which are then shared with data contributors.

This way it’s able to conclude PYTH has enough sustainable ways of revenue.
Using some of that revenue to do frequent buybacks of token, not only would incentivize more long-term investors and attract more potential new investors, but also would attract more newcomers mainly from other protocols (Via sponsors) resulting in more future revenue.

How doing frequent buybacks would incentivize long-term investors?

  • A major portion of those buybacks would be sent to an additional pool for OIS stakers, although only stakers with at least 45 consecutive staking days would be eligible for this rewards.

How often would rewards be distributed to eligible OIS stakers?

  • Rewards would be distributed every thursday, same as current staking rewards pool from publishers.

How would emissions be calculated?

  • As an example: PYTH made 10k$ worth of revenue in 1 week.
  • After doing the PYTH buyback, those 10k$ worth of PYTH would be sent to the additional staking pool only for eligible OIS stakers.
  • In this example the 10k$ would be linearly distributed during one year, meaning ~191,68$ every thursday.

Note: This additional pool would only be used to distribute rewards depending on the total amount of PYTH staked on publisher pools, not allowing OIS stakers to stake on this aditional pool.

Let me know your thoughts in the comments and if I should add something else.

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2

Thanks for the idea @SOLAR. It’s great to see more community members taking the initiative to come up with ideas and thinking long-term.

However, we need to be cautious about using information from GPTs. Regarding its inputs about revenue streams, I don’t think it’s entirely accurate.

For example, users don’t interact with Pythnet as it’s a backend infrastructure that aggregates data. Fees are collected on the price feed smart contracts on the respective supported blockchains. Also, Pyth’s Institutional/TradFi partners mainly contribute price data and are compensated in the form of PYTH tokens. I don’t see them as a source of revenue - at least not in with the current setup.

For me, token buybacks/burns may help to boost the token price for a while and possibly generate some hype/attention.

But if we really want to look long-term, we need to find ways to bring more value into the Pyth ecosystem, by continuing to:

  • Provide industry-leading services
  • Innovate and adapt to the changing environment
  • Develop strategic partnerships
  • Grow mindshare and awareness

I believe the community, within the framework of the DAO, can play a huge part in contributing to each of the aspects above. And a great way to start is by sharing ideas, as you have done.

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3

Thanks a lot for the feedback sir!

  • Yeah some metrics might not be accurate as you mentioned, although used GPT as a tool to get a general idea from possible sustainable revenue ways.
    On next proposal will be more cautious while using GPT.

  • Imo slowly increasing the fees per price feed update on each blockchain might be something to consider in order to keep the revenue increasing, as a result an increase on the demand of PYTH price if some portion of that revenue is used to do some PYTH buybacks.

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4

Whats the end goal, increasing the price of Pyth or increasing the revenue coming into the Network?

I think everyone is still concentrated on pumping their bags and token price, theyre forgetting running a business isnt only about increasing prices. Lots of other ways to do things, but the end goal is to bring more revenue in than expenses take out.

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5

Cannot agree more regarding sustainability and long-term growth of Pyth Network.

And the way to have sustainable growth is as listed:

The recent proposal on fee updates to certain data users is one way to bring in more revenue.

Again, keeping in mind that keeping competitive pricing with a superior product is also how to attract and maintain new/existing customers.

It is a marathon, not a sprint. Continuing to invest your time into conversations like this indicate that you have also a part owner of the network. This project has the potential to be the price layer of everything, everywhere. There is still so much to grow, and so much more potential.

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6

this also key technical for DEV, in order to grow, i had some subjective idea due to my perspective that build strong partnership, being communtity active as fock(by provide value wether is education interactive source of knowladge, comparative study, make some vibe accros social platform and technical breakwdoan in general)

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