Phase Two: Institutional Monetization Through Offchain Data

Article contributed by: Douro Labs

Since its inception in 2021, Pyth has been a pioneer in redefining the infrastructure and distribution of financial market data. The objective has always been to become the source of truth for financial data, and now Pyth has an opportunity to progress into its second phase with a proposal for the launch of an institutional product, expanded token utility, and deeper TradFi integration.

Pyth was designed to bring the price of everything, everywhere—a simple but historically elusive concept. While the internet has democratized access to content, replacing CDs with streaming and local media with universal applications, the same paradigm shift has yet to materialize for financial data infrastructure.

Today’s institutions remain constrained by legacy systems, subjecting themselves to billions in fees from intermediaries like Bloomberg and Refinitiv. These aggregators, in turn, procure data from exchanges that operate within siloed frameworks and are restricted by geography, asset class, and venue-specific trade data. The result is a market data ecosystem that remains stubbornly analog and fragmented, despite the digital transformation occurring everywhere else.

Pyth approached this challenge by using blockchain technology to establish a source of truth because existing systems were incapable of delivering trustworthy data in a permissionless environment. What began as data aggregation across a group of trading firms and exchanges has grown into hundreds of institutions publishing their proprietary market data onto a single network. With more than $1.6 trillion in cumulative transaction volume, a commanding 60%+ market share in DeFi derivatives, over 600 integrations, and the publication of U.S. Department of Commerce data, Pyth has achieved a distribution footprint that places it among the most consequential protocols in existence.

Yet, perhaps more significantly, Pyth has emerged as the world’s most robust and valuable repository of institutional-grade market data.

Phase 1 validated Pyth’s product-market fit within DeFi ecosystems and laid the foundation for Phase 2 by creating a new model for the market data economy. The proposed next phase is centered on scaling DAO revenue, expanding into adjacent markets, and increasing the collective value accrued across the Pyth network. The clearest testament to Pyth’s value proposition? The growing line of onchain and offchain applications now seeking to pay for Pyth data as the network redefines the market data supply chain. 

Most critically: Institutions are demanding Pyth data, and we're in the final stages of building a new product that could redefine market data across the finance industry.

Institutions spend approximately $50B every year for access to all of the market data they need. From setting the price on billion-dollar deals to powering the ticker displays on trading floors, market data is the fuel that keeps the engine of institutional finance running. But the current model used by institutions is slow, expensive, and severely fragmented. If Pyth can capture just 1% of that market, that’s $500M in annual recurring revenue (ARR). But Pyth isn’t just here for that $500M. It’s here to win the market and return sustainable value to the entire network.

Phase 1: Building the Infrastructure, Dominating DeFi, & Establishing the Most Valuable Data Source 

Pyth’s first chapter focused on one goal: building and scaling the infrastructure required to validate and distribute institutional-grade data onchain.

The Pyth contributors are well on their way to achieving that mission, with results that speak for themselves. With over 60% of the market share in DeFi derivatives and over $1.6T in transaction volume processed to date, Pyth is in the optimal position to realize exponential growth and value accrual as more real-world assets become tokenized. We envision a future where all data, like economic data from the U.S. Department of Commerce, flows through Pyth Network to get verified and published across every blockchain. This component of Pyth’s business model will continue to thrive as it becomes further entrenched as the source of truth for all blockchain data. 

Over time, onchain fees will gradually increase as data is delivered in proof-backed, secured messages to smart contracts everywhere. Earlier this year, the DAO approved incremental increases in the validation fees across dozens of blockchains, and that will continue to roll out as more and more data becomes available. The adoption of Pyth Network will continue to accelerate through connectivity to more blockchains, access to new markets, enhanced trust parameters, and the impending wave of tokenization. We expect more data to continue coming onchain, and the majority of it to leverage Pyth for validation and distribution. 

To date, Pyth has:

• Integrated 600+ protocols across 100+ blockchains

• Delivered 1,800+ price feeds, including 900+ real-world assets

• Become the #1 oracle by transaction volume across every major blockchain ecosystem

Here's what sets Pyth apart:

• Proprietary data from the world’s top trading firms and exchanges — including DRW, Jump, Jane Street, Optiver, HRT, SIG, IMC, Virtu, GTS, Flow, Cboe, LMAX, MEMX, MIAX, IEX, and more

• Cross-asset coverage across crypto, equities, FX, commodities, interest rates—all in one network

• A global market view that breaks down regional silos and unifies data across geographies

• Millisecond-level updates for high-performance trading environments

• Worked with the Department of Commerce to validate and distribute U.S. economic data onchain

Phase 1 proved the product works at scale. Now it’s time for Phase 2: redefining the market data economy and becoming the source of truth across the finance industry.

Phase 2: Unlocking the $50B Opportunity

Today, Pyth is ready to move into Phase 2, which begins with monetizing the first market data network built by and for institutions.

The global market data industry is worth $50B+ annually, dominated by a few legacy incumbents who:

• Have increased prices by over 50% over the last 3 years

• Charge some customers 5 times more than other customers for the same product

• Fragment access across geographies and asset classes

• Implement barriers to entry for new entrants in professional financial services

The cost of market data has increased so dramatically over the last 25 years that its value has outpaced other major asset classes by a wide margin.

The space is ripe for disruption, and the firms that set prices and move markets worldwide have been working to build a solution alongside Pyth. Here are some of their pain points:

• Exchanges only see their own order books—just one slice of the market—often confined to a single region or asset class

• Each exchange sells proprietary feeds that leave out trades happening anywhere else, creating blind spots

• Data giants like Bloomberg and Refinitiv patch together these incomplete feeds and sell them back as expensive, take-it-or-leave-it bundles

• The trading firms producing the fastest, most accurate prices receive none of the revenue their data generates

And here’s the structural flaw at the root of it all:

• The most valuable prices are created upstream, before they ever reach an exchange, but the majority of the revenue flows to middlemen and resellers even further downstream

Pyth’s new product has the potential to simplify access to global markets, empower institutions with specialized data, and redefine the market data economy.

It builds upon Pyth's innovative model that collects institutional-grade data directly from the source, and also incorporates enhancements around performance, accessibility, and asset coverage. This upstream approach fixes the core flaw of legacy market data, capturing the most valuable prices before they’re fragmented, marked up, and delayed, then channels value back to the institutions that generate them.

The proposed subscription product for Pyth is designed to deliver pure market data directly into existing workflows beyond blockchain environments for:

• Risk models & analytics

• Clearing & settlement systems

• Government regulatory and compliance workflows

• Accounting & reporting tools

• Display monitors

• Historical research

Imagine a world where anyone, from the world’s largest institutions to individual traders, can purchase comprehensive, specialized market data from Pyth Network. We’re proposing that payments can be made in multiple ways, including USD, onchain stablecoins, or PYTH tokens. This flexibility opens the door to millions of potential subscribers around the globe.

The proposed plan includes revenue from subscriptions flowing back into the Pyth DAO, and leaving the DAO to decide how best to deploy these funds to strengthen the network and align contributor incentives. Possibilities discussed in the governance forum include token buybacks, revenue-sharing models, and other mechanisms to reward publishers, users, stakers, and holders. As adoption grows, this feedback loop could scale the network’s reach, reinforce its data quality, and compound value for all participants.

Pyth already meets the quality, speed, and coverage required to compete—and win—in this market. With a new product for the DAO to consider, demand accelerating, and a clear path into a $50B industry, Phase 2 lays the financial and structural foundation for Phase 3: scaling Pyth into the global price layer for every market, everywhere.

Phase 3: Scaling the Network Globally

With the infrastructure built and the subscription data model in motion, Phase 3 should be about achieving total market coverage:

• Adding 200–300 new symbols every month

  • 3,000+ symbols in 2025

  • 10,000+ in 2026

  • 50,000+ in 2027

• Complete coverage across:

  • Trading venues

  • Permissioned DeFi

  • Unpermissioned DeFi

  • OTC markets

Why this matters:

• It establishes the most complete financial data layer in the world

• It eliminates regional silos, asset-class gaps, and vendor complexity

• Like Spotify, the catalog keeps growing—but unlike legacy providers, the contributors share in the upside

Here’s how Pyth stacks up today:

Here’s where we expect Pyth to be by the end of next year:

Each new data source attracts more builders and institutions, driving adoption and subscription revenue. That revenue strengthens the Pyth DAO and expands incentives for contributors. These growing incentives draw in even more data sources, accelerating the cycle.

The path forward is clear. With dominance in DeFi and accelerating adoption across TradFi, Pyth Network is positioned to capture a meaningful share of the $50B+ global market data industry. But that’s not the end state. Pyth has the potential to become the single source of truth for all of global finance.

Disclaimer:

For purposes of this disclaimer, any individual accessing or engaging with content provided by or on behalf of Douro Labs (“Douro”), whether as a viewer, listener, reader, website visitor, subscriber, participant, or by any other means, is collectively referred to as “you” or “your”.

All content made available by or on behalf of Douro, including but not limited to podcasts, videos, blog articles, newsletters, presentations, reports, social media posts, and other written, visual, or audio materials, including this document (collectively, the “Content”), is provided solely for general informational and educational purposes.

Nothing in the Content constitutes or shall be construed as financial, investment, legal, tax, accounting, or any other form of professional advice. The Content is not intended to be, and must not be understood as, a recommendation, solicitation, invitation, or offer to buy, sell, hold, or otherwise transact in any financial instruments, securities, digital assets, or other assets. The Content is general in nature and does not take into account your individual objectives, financial situation, or particular needs.

You are strongly advised to conduct your own independent research and to consult with appropriately qualified, licensed professionals before making any financial, legal, or investment decisions.

To the maximum extent permitted by applicable law, Douro and its officers, directors, employees, consultants, members, representatives, other agents, and all associated parties disclaim all liability for any direct or indirect loss, damage, or consequence arising from your use of, or reliance upon, the Content.

Accessing, viewing, listening to, downloading, subscribing to, or otherwise engaging with the Content does not create any advisory, fiduciary, or client relationship between you and Douro or any of its officers, directors, employees, consultants, members, representatives, or other agents.

If you are uncertain about any aspect of the Content, you should seek professional advice from a qualified expert in your jurisdiction.