Pyth Network, a blockchain-based data provider, has introduced a transformative new policy aimed at enhancing its token economy. Following a period of revenue growth, the project’s decentralized governance organization (DAO) has resolved to allocate 100% of its generated revenue toward the buyback of PYTH tokens.

New Buyback Initiative

This initiative, known as the “100% Rule,” was established under proposal OP-PIP-136 and mandates that all revenue generated by the DAO from Pyth’s products be utilized to bolster the pyth reserve. This marks a significant change from the previous approach, where the DAO allocated only one-third of its treasury assets—excluding PYTH tokens—for monthly token purchases.

Mechanics of the Revenue Allocation

Under this new structure, revenues received in stablecoins by the DAO will be directed toward purchasing PYTH tokens on the open market, facilitated by a designated council. Tokens purchased through these transactions will be added to the DAO treasury. Additionally, any revenue received directly in PYTH will contribute to the reserves without necessitating market purchases.

Current Token Reserve Status

Pyth Network currently holds approximately 42 million PYTH tokens in reserve. However, it’s crucial to note that this new buyback policy pertains only to revenue transferred to the DAO as approved under the latest proposal and does not apply to all revenue generated by the protocol.

This new strategy highlights Pyth Network’s commitment to enhancing its token economy and reflects broader trends within the decentralized finance sector aimed at increasing token value through systematic buybacks.