Understanding the PYTH Tokenomics

This blog post delves into the PYTH Token distribution to different participants of the Pyth Network and its ecosystem. This distribution is a pivotal step towards bringing the Pyth Network to a decentralized, self-sustainable, and permissionless state. On-chain governance is another critical component of this goal.

The general purpose of a token-based governance system is to enable token-holders to guide protocol development. It is therefore important that the community can prepare to participate in token-holder governance so that they can shape the network in an informed manner.

Scope of Governance and the Pyth DAO

As stated in the whitepaper, Pyth Governance can help determine high-level parameters of the other network mechanisms. On-chain governance is expected to be responsible for many decisions and actions, such as:

• Determining the size of update fees.
• Determining the reward distribution mechanism for data providers.
• Approving other software updates to on-chain programs across blockchains.
• Determining how new symbols (feeds) are listed on Pyth and their reference data (e.g. the number of decimal places in the price, reference exchanges).
• Determining how data providers will be permissioned to provide data for price feeds.

Note that new topics, with respect to on-chain governance, may be established by the DAO.

Token Distribution

• Token Symbol: PYTH
• Max Supply: 10,000,000,000
• Initial Circulating Supply: 1,500,000,000 (15%)
• Vesting: 85% of the PYTH Tokens are initially locked and locked tokens will unlock 6, 18, 30 and 42 months after the initial token launch.
• Token Address

Distribution

Below is the PYTH Token distribution table as per the whitepaper.

Publisher Rewards

22% — 2,200,000,000 PYTH

This allocation is reserved for the Pyth Network data providers, or "publishers".

The publishers are responsible for publishing price data to the Pyth Protocol. The “Publisher Rewards” allocation consists of reserved tokens for various reward mechanisms and grant programs to encourage publishers to publish accurate and timely price data.

This is designed to encourage more publishers to support new symbols which may lack the initial popularity or liquidity for the network to launch immediately.

There are already rewards mechanisms and grant programs in place to incentivize publishers to publish price feeds so that the Pyth Protocol can provide accurate and timely price updates.

~2% (50M) of the 2.2B PYTH Tokens are unlocked. The remaining PYTH Tokens (2.15B) are subject to the vesting schedule described above. Note that these rewards can only be distributed to publishers once they are unlocked.

Ecosystem Growth

52% — 5,200,000,000 PYTH

The “Ecosystem Growth” allocation is a strategic portion of tokens set aside for contributors to the Pyth Network, including developers, educators, researchers, strategic contributors, early publishers, and more.

This allocation aims to facilitate practical initiatives including funding research projects aimed at advancing the Pyth Protocol, incentivizing developers to build complementary tooling and resources, and supporting public education programs to increase awareness. This allocation aims to recognize and reward individuals and organizations that go beyond the core contributors in fostering the expansion and vitality of the Pyth Network.

13% (700M) of the 5.2B PYTH Tokens are unlocked. The remaining tokens (4.5B) are subject to the unlock schedule described above.

Protocol Development

10% — 1,000,000,000

This portion of the token supply has been allocated to core contributors focused on building oracle tooling, products, and infrastructure to expand the protocol’s suite of decentralized data services, such as Douro Labs.

15% (150M) of the 1B PYTH Tokens are unlocked. The remaining tokens (850M) are subject to the unlock schedule described above.

Community and Launch

6% — 600,000,000

This portion of PYTH Tokens is set aside for the initial launch phase and related activities and initiatives.

All 600M PYTH Tokens of “Community and Launch” allocation will be unlocked from day one.

Private Sales

10% — 1,000,000,000

This category represents two historical funding rounds to strategic contributors who add value to the network in terms of advisory and infrastructure support. Please note that these funding rounds closed and the allocation has been finalized.

All of 1B PYTH Tokens are locked and subject to the unlock schedule described above.

There are currently no announcements regarding PYTH Governance. You can stay updated on the Pyth Network’s developments through the official social media channels. We highly recommend that readers exercise caution and take appropriate measures to protect themselves from unverified or unofficial channels and claims.

We would like to express our appreciation to the Pythian community for their patience and continued support throughout the years.

We can’t wait to hear what you think! Feel free to join the Pyth Discord and Telegram, and follow Pyth on X. You can also learn more about Pyth here.