Pyth Token Phase 2

[dr497]

Summary

As a long-time participant in the Pyth ecosystem, I’m putting forward this proposal to introduce two key improvements that I believe will strengthen Pyth Network’s long-term sustainability and governance alignment:

1. Redirect all Pyth protocol revenue into a $PYTH Strategic Reserve fully owned and controlled by the DAO.

2. The Pythian Council to evaluate and optimize pricing across all Pyth Network on-chain products to ensure the protocol is maximizing revenue.

Together, these changes reinforce Pyth’s economic foundation and align the network’s growth with the interests of its community.

Background

The Pyth Network will soon celebrate its five-year anniversary (Q2 2026), and the $PYTH token just turned two in November 2025.

While Pyth’s feature suite continues to evolve—most recently with the launch of Pyth Pro—the token and the DAO have advanced far more slowly, aside from the creation of councils and the launch of Oracle Integrity Staking.

This proposal aims to prepare the DAO to use its existing treasury as well as manage upcoming revenue flows (from Pyth Pro as well as existing products such as Pyth Core/Price Feeds, Entropy, and Express Relay), and position the network for the next phase of growth.

Successfully executing these changes will help further align incentives between all Pyth DAO stakeholders: PYTH stakers, publishers, the DAO itself, and downstream users of Pyth products.

1. Pyth Core

Pyth’s original feature provides more than 2,000 price feeds across over 100 blockchains.

Each price update triggers a fee collected by the oracle contract. Over 90 chains use the smallest possible fee denomination (e.g., 1 wei for EVMs), but several chains have more meaningful fees. The Core contracts currently hold close to $100,000 in accumulated fees (in their respective native tokens).

Examples include:

• ~16 BNB on opBNB
• ~115,000 CRO on Cronos
• ~1,600 NEAR on NEAR
• ~175 AVAX on Avalanche
• ~2,000 SEI on Sei

Additional rewards exist on some chains. For example, Sonic’s FeeM program currently allocates 165,000 S tokens to the Pyth DAO.

The Price Feed Council has also created a successful listing process whereby asset requests include direct payments to the DAO. For example, HAEDAL/USD was listed for a $20,000 reward. More than $200,000 has been collected through this mechanism over the past few months.

1. Pyth Entropy

Pyth’s second product is a random-number generator deployed on nearly 20 blockchains.

Like Core, Entropy follows an on-demand pricing model: each randomness request pays a fee to the oracle. The contracts have collectively accumulated nearly $150,000, specifically ~50 ETH on Abstract.

1. Pyth Express Relay

The third Pyth product is a priority auction protocol initially launched with Kamino’s Swap product and since integrated with venues such as Titan.

Fees for the DAO are denominated in bips and depend on trading volume. The DAO has generated close to $110,000 to date. Growth has slowed recently due to the rise of Prop AMMs and increased competition among DEXs and LPs.

1. Pyth Pro

Pyth Pro is the newest addition: a paid subscription service offering low-latency, high-frequency data to professional data consumers. Pricing is publicly available on the Pyth website.

Launched in late September 2025, the DAO appointed Douro Labs as its first distributor with a 60/40 revenue split. Douro Labs will report quarterly and remit 60% of revenue to the DAO. The first report is due soon, but revenues are expected to exceed those of other Pyth products given the optimized pricing model (unlike Core, Entropy, and Express Relay).

Proposal

This proposal builds on prior discussions and introduces three key areas of action.

1. Create a $PYTH Strategic Reserve from Pyth DAO Treasury

Starting with this proposal, the DAO should begin systematically directing protocol revenue toward acquiring PYTH tokens to better align the treasury with the network’s long-term growth.

I propose that the DAO purchase PYTH monthly using one-third (33%) of the Treasury balance at hand (whether USDC, SOL, or others, excluding PYTH).

Notes:

• “At hand” refers specifically to the assets held in the official Solana-based DAO Treasury addresses (Gx4MBPb1vqZLJajZmsKLg8fGw9ErhoKsR8LeKcCKFyak and 9HKkxg5dpqjUEW1U2r76SpQCH7uvDMciytNYxrpwMVNc). Assets in Pyth contracts across other chains are not themselves the Treasury and require council-managed OP-PIPs for withdrawal towards the Pyth DAO Treasury on Solana. See Pyth DAO Constitution for more details.

• Even if revenue stagnated for three months—an unlikely scenario—this approach still provides ample time for the DAO to adjust course if needed. It also smooths market impact and helps the DAO accumulate PYTH at an averaged cost.

• This proposal does not prescribe or suggest how the acquired PYTH should be used (burns, OIS funding, grants, publisher incentives, etc.). The focus is first on systematically acquiring PYTH and holding it for now.

1. Increase Pricing Across On-Chain Pyth Products (Excluding Pyth Pro)

With the exception of the Price Feed listing process, revenue optimization has not been fully applied across Pyth’s on-chain products: Pyth Core, Entropy, and Express Relay.

The Pythian Council already has the constitutional authority to set on-chain fees for these products.

I propose establishing a formal process requiring the Council to:

1. Design a pricing matrix, and

2. Apply pricing changes on-chain via OP-PIPs on a quarterly basis.

The first fee-change proposal should be posted in early January 2026 and implemented shortly thereafter for all three products.

Each quarter, the Council will publish a report during the first week, covering revenue, activity changes, and recommended adjustments for the following quarter.

Implementation

1. $PYTH Strategic Reserve

If this proposal is approved, the upcoming on-chain vote should create a Pythian Council Ops Multisig Wallet and recognized it in the Constitution. That new Pythian Council Ops Multisig Wallet should administer and execute the buybacks. The new Pythian Council Ops Multisig Wallet should follow the same rules as the Pythian Multisig Wallet (used for OP-PIPs) where the proposals need to be approved by 6/8 of the elected council members. The ultimate owner of this multisig is the Pyth DAO. Signers of Pythian Council Ops Multisig Wallet are the same address than the Pythian Council members use for the Pythian Multisig Wallet (which is used for OP-PIPs).

The intent of this design is not to turn the Pythian Council into an active treasury manager, but to have the Pythian Council Ops Multisig act as a mostly mechanical executor of what the DAO and its members decide. As many parameters as possible around the buybacks (amounts, cadence, order types, venues, slippage limits, max trade sizes, etc.) should be specified directly in the final proposal, so that the Council is simply following clear instructions approved on-chain rather than exercising ongoing discretion. In this way, control over treasury strategy remains firmly with the DAO, while reducing unnecessary responsibility and potential liability for individual council members.

Additionally, if this proposal would be approved, I suggest the DAO to immediately transfer one-third of the current Treasury balance to the newly introduced Pythian Council Ops Multisig Wallet to begin purchasing PYTH on-chain. These purchases will be administered by the Pythian Council to optimize for the amount of PYTH accumulated (limit orders, smaller market orders to avoid being impacted by a low liquidity level of the Pyth Tokens onchain), in accordance with the following parameters and limiting instructions:

1. No transactions where slippage would exceed 5%

2. No single transactions in excess of $25,000 USD

3. Aggregators (like jup.ag) should be preferred to optimize transactions

4. Where limit orders are used, they must be at least 0.1% below the displayed market price at the time the order is placed

The Pythian Council will also be in charge of reporting all the trades, associated with proofs, to the Pyth DAO on the forum, and sending back the recently acquired PYTH tokens to the Pyth DAO Treasury.

The Pyth DAO Treasury—per the Constitution—is composed of the assets held at the following Solana addresses:

Gx4MBPb1vqZLJajZmsKLg8fGw9ErhoKsR8LeKcCKFyak

9HKkxg5dpqjUEW1U2r76SpQCH7uvDMciytNYxrpwMVNc

Assets accumulated across Pyth contracts on non-Solana chains—such as fees collected by Pyth Core, Entropy, or Express Relay—belong to the DAO but are not part of the Solana-based Treasury. Retrieving these balances requires contract upgrades or withdrawal actions via the Pythian Council OP-PIPs.

To ensure consistent consolidation of these assets, it will be the responsibility of the Pythian Council to regularly retrieve funds from Pyth contracts deployed across other chains and repatriate their value to the Pyth DAO Treasury on Solana. Given the liquidity and bridging constraints on many networks, the most practical approach is to source reputable counterparties willing to receive the native-chain assets directly and pay the DAO in USDC on Solana.

For example:

The Pyth Entropy contract on Abstract currently holds about 50 ETH, the Council may identify a counterparty (e.g., a Pyth publisher such as Wintermute, Selini…) willing to receive those 50 ETH directly on Abstract. In return, the counterparty would send 150,000 USDC to the DAO Treasury on Solana (assuming ETH/USD = $3,000 based on the Pyth ETH/USD 1-hour EMA).

This approach avoids illiquid cross-chain swaps, ensures fair pricing, and streamlines the consolidation of DAO-owned assets.

Each retrieval and conversion will be documented on the Pyth Forum and approved by the 7-of-9 Pythian Multisig before execution.

1. Pricing Increase

No contract upgrades are needed. The Pythian Council already has the authority to implement quarterly pricing adjustments via OP-PIPs. Quarterly forum posts will present data, recommendations, and proposed changes.

Next Steps

1. Community discussion and feedback on this proposal.

2. Preparation of a detailed follow-up proposal for an on-chain DAO vote.

I believe these changes would meaningfully strengthen Pyth’s long-term sustainability while keeping control firmly in the hands of the DAO. Looking forward to hearing everyone’s thoughts and feedback!

[TheDinarian]

This proposal is a significant step toward strengthening Pyth Network’s economic foundation and ensuring long-term sustainability. The dual focus on systematically accumulating the native asset ($PYTH) and proactively optimizing revenue streams is exactly the kind of strategic thinking the DAO needs.

1. On the $PYTH Strategic Reserve:
   The plan to create a dedicated $PYTH Strategic Reserve is highly commendable. Systematically directing protocol revenue back into the native token is the most powerful way to align the DAO’s financial interests with the value accrual of the token holder community. The detailed implementation steps regarding the Pythian Council Ops Multisig Wallet, transaction limits, and preference for aggregators like jup.ag show a strong focus on minimizing market impact and achieving optimal execution.
2. On Increasing Pricing Across On-Chain Products:
   It is critical that the DAO move beyond minimal fees for its established products (Core, Entropy, Express Relay). Your suggestion to mandate the Pythian Council to design a formal pricing matrix and apply quarterly, data-driven adjustments is an excellent mechanism to maximize revenue without requiring burdensome contract upgrades every time. This introduces a professional, iterative approach to product pricing.
   Suggestive Improvements
   To make this proposal even more robust and transparent, I offer the following suggestions for consideration:
3. Refine the Strategic Reserve Funding Mechanism
   The current proposal suggests purchasing PYTH monthly using one-third (33%) of the Treasury balance at hand.

• Suggestion: While the intent is clear, basing the ongoing monthly buyback on a percentage of the entire existing treasury balance could lead to highly variable and potentially massive initial buybacks, which might cause an avoidable market shock.
• Alternative Structure: Consider basing the monthly buyback on a percentage of the net new revenue accumulated over the previous month or quarter (e.g., 66% of the revenue collected into the Treasury in the last 30 days). This approach ties the buyback directly to the network’s organic growth and ensures the strategic reserve grows sustainably and proportionally with current network activity.

2. Enhance Transparency in Pricing Optimization KPIs
   The proposal tasks the Pythian Council with designing a pricing matrix and reporting on recommended adjustments quarterly.

• Suggestion: Mandate that the Pythian Council explicitly define and publish the Key Performance Indicators (KPIs) they will use to measure the success or failure of a pricing change.
• Example KPIs to track:
  • Total revenue generated (USD equivalent).
  • Number of unique users/integrations on a specific chain.
  • Fee revenue divided by the total number of price updates/requests (average fee).
  • Observed user churn (de-integrations) following a fee increase.
• Clearly defining the metrics before the changes are implemented will dramatically increase community confidence and provide a concrete framework for evaluating the Council’s performance each quarter.

3. Formalize Cross-Chain Asset Repatriation Reporting
   The plan for the Pythian Council to retrieve assets from non-Solana chains (e.g., 50 ETH on Abstract) via over-the-counter (OTC) trades with counterparties is clever and practical.

• Suggestion: To ensure full transparency and accountability, require the Council to publish a Repatriation Log on the forum immediately following the execution of any large-scale OTC trade, detailing:
  • The exact native asset and amount retrieved (e.g., 50 ETH on Abstract).
  • The final USD amount received on Solana (e.g., 150,000 USDC).
  • The counterparty (if willing to be named, or simply “Pyth Publisher”).
  • The time-of-trade market rate used for calculation.
    This minor addition ensures the community can easily track the consolidation of DAO-owned assets across all 100+ chains, even before the funds enter the Strategic Reserve.
    This is a fantastic step forward, and I look forward to supporting the final proposal in the vote.

[KemarTiti]

@dr497

Very nice to see this as it echoes a growing community interest around that topic (1, 2).

To your comments @TheDinarian

1. Recent revenue vs. treasury as the metric

Using recent revenue instead of the DAO treasury to decide how much the DAO should buy feels pretty similar anyway. And as it was mentioned in the original post, not all revenue is automatically transferred to the DAO treasury. So if we use recent revenue as the basis, we could end up in situations where the buyback amount is actually higher than what the DAO currently holds on Solana.

For practical and operational reasons, I’d lean toward @dr497 idea and use the DAO treasury since it’s easily accessible.

2. KPIs to measure the success of pricing decisions

In principle, I agree that proper KPIs should be defined to measure whether the pricing changes are successful. That said, in practice, setting up really solid KPIs will take a lot of work. I do like the ones you suggested though:

1. Revenue – At the end of the day, this is what matters most (or close to it).

2. Number of unique users – Relying heavily on one large user can have some short-term benefits (fewer stakeholders to manage), but it also increases risk if that user leaves.

The Pythian Council has already made fee changes in the past, and we should review those to see what worked and what didn’t:

• opBNB, Cronos, Avalanche, and Sei have generally been successful in terms of both revenue and continued usage.

• Swellchain and Worldchain have seen little usage, which may also be due to the chains themselves having limited activity.

3. Disclosure of DAO asset repatriation

I also agree that any repatriation of DAO-owned assets should be disclosed on the forum. In practice, this would most likely happen through OP-PIPs, since Pyth contracts would need to:

1. Be upgraded to allow withdrawals of held assets, and

2. Send those assets to the designated counterparty address.

[lowkeigh]

Really happy to see this next step for Pyth finally coming to fruition. With the recent development of Pyth Pro and the evolution of existing products, this seems like the logical time to revisit fees and align revenue with support for the Pyth token.

I have full confidence in the DAO and the Pythian Council’s ability to make the right calls around what fees will be appropriate and how to approach these updates. Because of that, I’d like to focus my comments on the strategic reserve and how it might eventually be utilized.

First and foremost, I completely understand the approach of establishing the reserve before taking action on what to do with the tokens. That breathing room allows Pyth Pro to properly get off the ground and gives any fee changes time to settle so we can see their actual impact.

However, Jupiter recently went through a very similar process with their ‘Litterbox’, where fees were used to buy back tokens and accumulate a reserve but without a clear plan for how that reserve would ultimately be used.

Initially, this delivered a strong “sugar hit” of positivity for token holders and the broader ecosystem, reflected in positive price action. But over time, as the fund grew with no defined purpose, it became a burden. The uncertainty around its future weighed heavily on holders attracting fud and steering holders away from the token. Jupiter was eventually forced to burn the entire amount just to resolve the overhang.

With that in mind, I’d suggest aiming to establish a clear use for the Pyth Strategic Reserve sooner rather than later once the initial accumulation phase is complete, whatever that use may ultimately be.

I’ve shared my thoughts on how something like this could be applied here

[grizzlyland]

Banger of a post . I fully back the ideas/plans laid forth in this post .

Looking forward to a succesful vote and the implementation of this proposal

[Derrp]

A great idea to formalise a use case for the DAO revenue in a sustainable way. Also a great opportunity for the DAO to request assistance from the Pythian Council to optimise fees, and for there to be more readily-available metrics for on-chain fees to measure the effects of any changes. I imagine there will be push-back from some of our customers regarding any fee changes (to the positive only though), and it will be a challenge to find the perfect balance of DAO revenue and customer retention.

Lots of great ideas all in one post, and I’ve never been more bullish to be part of this DAO. Looking forward to more discussions and potential execution

[KemarTiti]

@lowkeigh

However, Jupiter recently went through a very similar process with their ‘Litterbox’, where fees were used to buy back tokens and accumulate a reserve but without a clear plan for how that reserve would ultimately be used.

Initially, this delivered a strong “sugar hit” of positivity for token holders and the broader ecosystem, reflected in positive price action. But over time, as the fund grew with no defined purpose, it became a burden. The uncertainty around its future weighed heavily on holders attracting fud and steering holders away from the token. Jupiter was eventually forced to burn the entire amount just to resolve the overhang.

With that in mind, I’d suggest aiming to establish a clear use for the Pyth Strategic Reserve sooner rather than later once the initial accumulation phase is complete, whatever that use may ultimately be.

I’ve shared my thoughts on how something like this could be applied here

IIRC, the Jupiter Litterbox accumulated close to 130M JUP tokens — roughly $30M+. While we all obviously hope to see Pyth DAO revenue and the treasury grow to that level as quickly as possible, I expect the scale here to be much smaller at first and to increase gradually over time.

That said, I personally agree with you that the Pyth DAO should start thinking about the end use sooner rather than later, to avoid the risk of a future supply overhang.

My suggestion would still be to kickstart the reserve as soon as possible. Then, during Q1, once we have more data on buybacks and a better understanding of how revenue is growing, DAO members can spend more time defining what to do with the accumulated tokens — whether that’s burning (and at what percentage), funding growth initiatives, or a combination of the options you outlined in your post.

@Derrp

I imagine there will be push-back from some of our customers regarding any fee changes (to the positive only though), and it will be a challenge to find the perfect balance of DAO revenue and customer retention.

Yes, absolutely — this won’t be easy. I generally believe fees should be handled conservatively at first and increased gradually over time. It’s better to move to something like $0.001 and preserve usage rather than jump straight to $0.10 and lose most of it.

Some early churn is just part of the process. What really matters is building something that can last. Having paying users from the start helps align incentives, pushes everyone to care about data quality, and gives the network real resources to grow. Relying only on massive growth with no revenue is risky — sustainable traction comes from people finding enough value to actually pay.

[totti]

This what may seem like one small step is surely one giant leap for Pythians in the coming years. Fully in support of this proposal. I’m certain that slowly and surely Pyth gonna have a humongous stake in this 50 billion dollar industry, and this proposal is gonna align well with the Pyth holders. All market data is gonna be on chain, and we gonna be well positioned for it. Future looking bright!

[Hillseeker]

Fully supportive & extremely aligned with this direction.

As someone who spent many years in financial services, specifically in global IT procurement negotiating contracts with Bloomberg and other tool providers, I’ve seen firsthand how much power high-quality data and low-latency delivery have over a trading desk’s performance … and over their budgets. These guys got whatever they wanted, when they wanted it, and we had limited power to walk away from the table when negotiating on their behalf (score one for the tool provider).

That experience is exactly why I’m incredibly bullish on where Pyth can go with products like Pyth Pro and why this proposal resonates strongly with me.

Redirecting revenue into a Pyth Strategic Reserve is a smart, long-term alignment move.

While I appreciate the simplicity of a fixed monthly buyback percentage, I’m curious if a flexibility mechanism would be more sustainable – maybe a min-max, or a default position with capacity to scale and/or recalibrate or balance quarterly, based on revenue, market conditions, and opportunities.

A big thumbs-up as well for the part about the Pythian Council being in charge of reporting trades with proofs to the DAO. I’m very glad to see this handled with rigor & transparency.

Overall: strong proposal, strong timing, and strong alignment with what the next phase of Pyth should look like. Excited to see this move forward.

[Amensch]

I’m not too familiar with the business revenue side of things, but if the cost of paying for individual transactions is cheaper than if they had a subscription, wouldn’t that be a hurdle to accomplishing the goal of getting people onto the subscription? I understand volume is a big factor, because users with smaller volume will not want to spend more for a subscription regardless.

Again, my question is more to learn and understand.

Thank you

[KemarTiti]

@Hillseeker

maybe a min-max, or a default position with capacity to scale and/or recalibrate or balance quarterly, based on revenue, market conditions, and opportunities.

For administrative and legal consideration, I think it is important to have a system/design where the council is only executing on a ‘strategy’ defined by the DAO itself.

In regards to a min amount, you can enter a weird territory where the DAO Treasury doesn’t have the min amount available in the Treasury making it impossible to buyback the approved min amount.

A max amount can make sense though. Also market conditions are a good reason to adapt the buyback strategy.

I’d agree with you that this can and should likely be reviewed on a quarterly basis (or every time the Pythian Council rotate i.e. every 6 months).

@Amensch

if the cost of paying for individual transactions is cheaper than if they had a subscription, wouldn’t that be a hurdle to accomplishing the goal of getting people onto the subscription?

If done for too long, yes I agree. However in practice it might look like more:
As a protocol I pay X to use Pyth Core
If my cost to upgrade to Pyth Pro (or Crypto+) is now only 2X it might make sense to just upgrade anyway as Pyth Pro is faster, less end to end latency.

Also, whether the revenue comes from Pyth Core or Pyth Pro, this is still revenue for the DAO.

[Imgonnatakeapyth]

I just wanted to say that i fully support this, still feel our prices would be a bargain in comparison to the other existing solutions out there despite the increase. And tbh i love the fact that even on a not so hot chain atm we were able to generate 50 eth from entropy, really bullish.

[Hillseeker]

appreciate your feedback.

by min-max, I was thinking of percentages (of treasury balance available), not fixed amounts, for the reason you articulated (on the minimum end) and to have some flex room on the upper side, if the right conditions or opportunities exist. e.g. up to 40% treasury balance per month, with a quarterly review aimed at reaching 33% p.a.

[KemarTiti]

Yeah this makes more sense!

IMO we’ll be better suited to further optimize the reserve strategy as the DAO sees (hopefully) the first buybacks and how all the other endeavors (continuous Pyth Pro revenue, Price Feed Listing and the increased fees for Pyth Core) take shape and perform.