Thanks for the proposal. I support removing the governance overhead and automating the process, but I strongly prefer the Strategic Reserve to remain a fully market-facing, on-chain buyback mechanism.
My main question is where the PYTH used for direct settlement by Douro Labs actually comes from.
Under V2, direct PYTH payments from Douro would count as completed accumulation with “no additional market purchase required.” If that PYTH comes from Douro’s existing holdings rather than being purchased from the open market, then I don’t think this should be considered economically equivalent to an on-chain buyback.
The DAO is still receiving PYTH, but there is no new market buy associated with that portion of Pyth Pro revenue. If the direct-settlement PYTH comes from Douro’s existing holdings, then economically this could resemble Douro gradually reducing its PYTH balance against the DAO’s share of Pyth Pro revenue, rather than the DAO using that revenue to create new market demand for PYTH.
In other words, it could look more like Douro effectively DCAing out of its existing PYTH position through the revenue settlement mechanism, while the DAO accumulates those tokens, instead of Pyth Pro revenue being used to purchase PYTH from the open market.
That is materially different from:
Pyth Pro revenue → USDC → open-market PYTH purchase → DAO Treasury
With the current market-facing approach, the relationship is very clear and verifiable: Pyth Pro revenue generates actual market demand for PYTH, the purchases happen on-chain, and anyone can independently track the execution. As Pyth Pro revenue grows, this mechanism can also create a consistent and potentially growing source of market demand for PYTH.
So I would appreciate clarification on a few points:
- Where does the PYTH in Douro’s direct-settlement wallet come from?
- Is that PYTH purchased from the open market, or does it come from Douro’s existing PYTH holdings?
- If it comes from existing holdings, why should this be treated as equivalent to a market buyback when no new market purchase occurs?
- Why not keep 100% of the Strategic Reserve execution market-facing and on-chain, even if that means accepting some execution cost or slippage?
Personally, I support the full on-chain buyback model. I think the transparency and recurring market demand created by Pyth Pro revenue are important parts of the Strategic Reserve, not simply the final number of PYTH tokens that end up in the DAO Treasury.
To me, one of the strongest aspects of the current model is that it creates a direct link between Pyth Pro’s commercial success and market demand for PYTH. The more revenue Pyth Pro generates, the more PYTH the Strategic Reserve purchases from the market. I would prefer to preserve that relationship rather than replace part of it with direct transfers of existing PYTH.