Building on the transparency and tiered-buyback ideas, we should look at Capital Efficiency. If the DAO is going to hold a massive reserve of $PYTH, we should ensure it’s either (a) rewarding the most active stakers to encourage governance or (b) being put to work as Protocol Owned Liquidity to improve market depth.
Here are several suggestions:
1. The “Real Yield” Staking Model
Currently, the proposal focus is on buying back $PYTH to build a reserve. To increase token demand, you could suggest distributing a portion of the buyback value as “yield” to active governance stakers.
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The Idea: Instead of just holding 100% of the purchased $PYTH in a silent reserve, a percentage (e.g., 20% of the monthly buyback) could be distributed to users who have locked their $PYTH and actively voted in the DAO.
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Why it works: This creates a “Real Yield” narrative similar to protocols like GMX or Aerodrome, where token value is directly tied to protocol cash flow, incentivizing long-term holding.
2. Strategic “Burn-Buyback” Hybrid
Holding $PYTH in a reserve is good for the balance sheet, but it doesn’t technically reduce the circulating supply permanently.
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The Idea: Propose a hybrid model where a portion of the purchased $PYTH is permanently burned, and another portion is added to the Reserve.
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Why it works: Burning creates a deflationary pressure that is permanent, while the Reserve provides the DAO with “dry powder” for future grants or emergency funding.
3. Yield-Bearing Reserve Management
As the reserve grows, sitting on idle $PYTH is a missed opportunity.
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The Idea: The DAO could authorize the use of the Reserve $PYTH as Protocol-Owned Liquidity (POL). For example, providing liquidity on Solana-based DEXs (like Orca or Meteora) or lending it on platforms like Kamino.
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Why it works: This generates secondary revenue for the DAO and ensures deep liquidity for the token, making it easier for institutions to buy/sell $PYTH without high slippage.
4. “Pyth Pro” Referral/Affiliate Mechanism
Since Pyth Pro is the primary engine for this revenue, the community should help drive its adoption.
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The Idea: Suggest a program where dApps or community members that refer institutional clients to the $10k/month Pyth Pro subscription receive a referral fee (paid in $PYTH from the reserve).
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Why it works: It decentralizes the “Sales” department of the network and leverages the existing 600+ dApps to find institutional leads.
5. Insurance Fund & “Confidence” Staking
Institutional users are often risk-averse regarding oracle failures.
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The Idea: Suggest that a segment of the PYTH Reserve be designated as an Oracle Insurance Fund. If an oracle failure is proven via the DAO, this fund could be used to compensate impacted dApps.
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Why it works: It acts as a “guarantee” of quality. Knowing there is a multi-million dollar backstop makes Pyth significantly more attractive to large-scale financial institutions compared to competitors.
6. Discounted Fees for $PYTH Payments
Currently, fees are often abstracted or paid in native gas tokens.
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The Idea: Suggest that any fee paid directly in $PYTH receives a 10–20% discount.
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Why it works: This creates a circular economy where users are incentivized to buy and hold $PYTH specifically to pay for their data needs, creating a “Utility” floor for the price.
In summary, while building a reserve is a vital first step, our goal should be to make $PYTH one of the most productive assets in the space. Moving toward a model that incorporates transparency, ‘real yield’ for stakers, and permanent deflationary burns will create a much stronger incentive for long-term participation. Let’s ensure Phase 2 doesn’t just fund the treasury, but directly drives value back to the community that secures the network.