Pyth Network, a top player in the crypto oracle industry, has launched a PYTH reserve, a move it hopes will link adoption and network value.
In a statement, the developers said the new PYTH reserve will convert network revenue into a systematic acquisition of tokens.
The reserve will work by deploying a portion of its network revenue each month to acquire PYTH tokens on the open market. This approach will ensure a predictable execution and scalability as the revenue grows.
The network’s revenue comes from the Pyth Pro product, price feeds, Entropy, and Express Relay. In a statement, Mike Cahill, a Pyth contributor, said:
“To continue strengthening the underlying network, the PYTH Reserve creates a sustainable economic system fully capable of compounding value as adoption accelerates across onchain and traditional finance.”
Pyth’s reserve approach mirrors that of Chainlink, which launched the Strategic LINK Reserve in August. This reserve buys LINK tokens by using revenues from its on-chain and off-chain activities. It has been highly successful so far, having acquired over 1 million LINK tokens. This has helped to remove tokens from circulation.
Pyth Network’s purchases will be much smaller than Chainlink’s. Data compiled by DeFi Llama shows that its revenue is relatively small. It made less than $2,300 in November, much lower than the year-to-date high of $24,000
Pyth Network is the fifth-largest oracle network in the crypto industry, after Chainlink, Chronicle, RedStone, and Internal. It has a total value secured of $4.6 billion, with its top apps being Jupiter, Kamino, Drift, and Suilend.
Meanwhile, Pyth Network announced its integration with Cardano, a move that will give developers access to high-quality data. Pyth becomes the leading oracle network in Cardano, a move that may help to grow its ecosystem.
All these events came as the PYTH token price has dropped sharply in the past few weeks. It moved to $0.06, its lowest level since October 10 and 75% below its highest point in July. Its market cap has slumped to $367 million today.
