Pyth Network (PYTH) will unlock approximately 2.13 billion tokens on May 20, which is 141.67% of the current circulation and is worth approximately US$943 million. PYTH is unlocking for the first time, which means that its ecosystem is about to enter a new stage!
Basic information of the project
Pyth network is a next-generation price oracle solution that aims to provide valuable financial market data on-chain to projects and protocols and the public through blockchain technology, including cryptocurrencies, stocks, foreign exchange, commodities, etc. The network aggregates first-party price data from more than 70 trusted data providers and publishes it for use by smart contracts and other on-chain or off-chain applications.
Pyth Network is an oracle project based on the Solana public chain. Among many new-generation oracles, Pyth Network has quickly emerged with its outstanding features and has become a popular oracle service in emerging ecosystems such as Solana.
Pyth Network aims to bring real-world financial data to the decentralized world. Its market data is provided by more than 80 first-tier data providers, including some of the largest exchanges and market making companies in the world.
You may be curious, what should I do if pyth is unlocked in large quantities? Why did it fly away before it was unlocked?
Unexpectedly, the unlocking time originally scheduled for May 20 was 22:00, but it began to rebound at 10 am, rising 23% in 9 hours, and the current price is 0.452 US dollars. Currently, there are 1,033,851,841 PYTHs in pledged status, with a total pledged value of 395,219,848 US dollars; the number of PYTH pledgers is 145,299.
The project party unlocks it in advance?
You should know that the rising star of the oracle sector, pyth, has attracted much attention when it was launched, and the legend of the surge in the old predecessor link is pinned on pyth. Many mainstream media broke the news that it will be unlocked tonight, but in fact it has already been unlocked.
It is very likely that the time was modified. The tokens were unlocked yesterday. This 20% drop was caused by the unlocking and selling. Before the unlocking news, PYTH almost always maintained a downward trend. oken_Unlocks has responded to the data statistics error, but did not list the explanation, resulting in many media reporting on the unlocking event tonight! And the data of Token_Unlocks has also been updated to show that the unlocking was completed yesterday, and the next time will be a year later.
Is unlocking a gradual process?
According to the logic of the bull market, everyone hopes to sell when the market gets better, but for a project that has fallen and everyone has lost confidence, the selling pressure will be quite large. Unlocking to circulation is a gradual process, so not all unlocked tokens will flow into the market on May 20th. In fact, only a small part will enter the market at that time. Therefore, we are more looking forward to how the increase in liquidity after unlocking will support the construction and development of the entire ecosystem.
So what to do with the massive unlocking of pyth?
First, let’s take a look at the token distribution of $PYTH:
Max Supply: 10,000,000,000
Initial circulating supply: 1,500,000,000 (15%)
Lock-up period: 85% of PYTH tokens are initially locked, and the locked tokens will be gradually unlocked 6 months, 18 months, 30 months and 42 months after the initial token launch.
After the first unlock in May 2024, the allocation will reflect the following distribution:
Community and Launch (6%): For initial launch and related activities and initiatives.
Provider Rewards (22%): For the Pyth data provider network. Used for rewards, grant programs, and as an incentive to encourage providers to support new assets that may initially lack liquidity.
Ecosystem Growth (52%): For contributors to the Python network, including but not limited to developers, researchers, educators, and early providers. The goal is to encourage initiatives and reward contributions beyond the founding team and core contributors.
Protocol Development (10%): For core contributors (i.e. Douro Labs) building tools, products, and infrastructure.
Private Sales (10%): Used for two rounds of funding. Pyth has not publicly disclosed the price per PYTH sold and its valuation. In December 2023, Pyth released an update on an early strategic round that included well-known investors such as Castle Island Ventures, Wintermute Ventures, Borderless Capital, CMT Digital, Bodhi Ventures, Distributed Global, Multicoin Capital, and Delphi Digital.
Among them, "Publisher Rewards" accounted for 22%, and about 537.5 million tokens were newly unlocked this time. This part of the tokens is reserved for Pyth Network data providers or "publishers", who are mainly responsible for publishing price data to the Pyth protocol.
In the future, publishers may need to pledge their PYTH tokens to continue publishing data. In this way, the community can also exercise certain supervision over data publishers. Even if the issuer needs to unlock these tokens to their own account, they still need to pledge them, so these tokens will have a significant impact on the market environment.
The second part: Ecological growth, accounting for 52% of the tokens. This is almost half of the tokens related to ecological growth. All incentive plans come from this part, including rewards for ecological contributors, such as data publishers and downstream institutional agreements. These incentive plans are gradual, and even if the tokens are unlocked, they will not be released suddenly. Most tokens related to ecological growth are not issued to individuals, but to ecological builders or institutions. These participants have long-term cooperation plans. For example, some DeFi protocols have used Pyth services and received ecological growth rewards. In the future, they will also feed back to the use of Pyth through staking and other means, and will not face the pressure of large-scale sales.
The other two parts include the tokens needed for protocol development, accounting for 8.5%, and private placement accounting for 10%. Therefore, we believe that although a large part of the liquidity is about to be released, due to the native demand behind these token allocations, we do not think this will have a significant impact on the market. Even if there is an impact, it will be a long-term process, so it is not something we need to pay special attention to.
What is the use of $pyth besides staking?
This unlocking will not only give more people the opportunity to participate in the future staking of Pyth, but may also allow more users to participate in the full staking requirements at a lower cost. This is also the key to the Pyth Forum, because from the feedback of the community, the team does not want to centrally promote more use cases, but hopes that users will participate and come up with better proposals together.
APY income: Similar to Chainlink staking with 4%+ income
Pledge to Publishers and share profits with them
Share the revenue of the Pyth Network agreement with the Pyth Network itself
What potential does Python have?
Pyth Network is currently considered the fourth-largest oracle project with a total value locked (TVL) of $2.112 billion, behind Chainlink, WINkLink, and Chronicle.
In terms of the number of networks served, Pyth ranks second with 144 networks, second only to Chainlink's 353. Recently, the price of Pyth Network has been on an upward trend and is expected to achieve new highs in the coming months. Although long-term forecasts remain bullish, the price of Pyth Network ($PYTH) may take longer than expected to reach the $1 milestone.
All things considered, Pyth Network has an important position in the field of decentralized financial oracles with its fast and accurate data provision capabilities. Although its partially centralized data source may be criticized by some, its technical advantages and market application prospects make it a project worthy of attention.
What will happen to pyth in the future? How much room is there for it?
In short, the first unlocking of $PYTH is a significant event. It marks that the $PYTH ecosystem has entered a new stage of development. Of course, we must also remain rational and calm. Don't be carried away by the temporary craze, but carefully analyze and evaluate various risks and opportunities.
The previous article has analyzed that the selling pressure may be caused by the early unlocking, and the continued decline, and the oversold rebound is the reaction after the news, and it is likely to fall. If it falls below 70% after unlocking, it is estimated that it will continue to decline to around 0.24.
It should be noted that $PYTH tokens are not only used as fuel for transactions (i.e. paying gas fees), but also allow holders to share network revenue and participate in governance decisions. However, projects like Pyth that are committed to infrastructure construction are not eye-catching. At the same time, the oracle track is too narrow, and ChainLink is already in the lead. It is difficult for Pyth to seize its share in a short period of time, but Pyth tokens are likely to grow 4-6 times in the new cycle.
