Massive growth and adoption of Pocket Network sees the DAO accept a community proposal.
Tampa, Florida, March 18, 2022 — Pocket Network, a Web3 relay infrastructure middleware protocol, has announced a new governance policy to reduce inflation of its utility token, POKT, to manage growth and sustain fault-tolerant incentives for node runners and Web3 scaling.
Pocket facilitates blockchain bandwidth from a globally distributed 35,000-node network to Web3 applications on 37 blockchains, including Ethereum, Polygon, Solana, Avalanche and Harmony.
Pocket’s protocol operates a two-sided marketplace. On one side, infrastructure providers run nodes — or access to blockchain data — for connections to its blockchains. On the other side, Web3 application developers gain access to a robust and fault-tolerant decentralized system for querying blockchain data and provisioning nodes.
Infrastructure providers achieve network capacity and are rewarded with POKT in proportion to how many blockchain relays are serviced for application developers. These developers stake POKT in proportion to the number of relays their applications require.
The Pocket economy’s growth has been three phases: a bootstrapping phase, occurring when applications’ services were subsidized, and nodes earned attractive token incentives; a current growth phase, where bootstrapping has successfully initiated the flywheel of growth, and inflation is more efficiently managed; and a future maturity phase, where application stakes are burned in proportion to relays used as POKT’s global supply stabilizes.
Recent substantial growth in relays has marked the network’s transition to its growth phase.
“Pocket Network’s token economics has done a good job of getting us where we want to be,” said Adam Liposky, chief operating officer of Pocket. “We are now transitioning from bootstrapping our network to a more progressively managed growth trajectory that will allow us to scale globally. We have set up a powerful system to continue to properly incentivize our community, as well as protect against any unintended consequences of our network’s growing success.”
The Pocket decentralized autonomous organization (DAO) has approved a WAGMI — weighted annual gross max inflation — proposal to actively manage the system’s inflation rate and offset inflation challenges.
WAGMI modifies the current system, where a fixed multiplier of 0.01 POKT minted to node runners for each relay is replaced by dynamic adjustments to the relays-to-tokens-multiplier to target an annual inflation rate.
In February, the first adjustment targeted a 100% annual inflation rate. Subsequent adjustments will be 10% deductions monthly until July 2022, when the annual inflation rate becomes 50%. Once this target is met, the DAO can set longer-term targets and continue to manage inflation as Pocket rapidly increases its relays and implements a supply-stabilizing burn strategy planned for the network’s maturity phase.
“This inflation management framework provides node runners and our community with stable rewards over the longer term,” said Jack Laing, chief governance officer of Pocket Network. "If daily relays were to change drastically in either direction, they would no longer be exposed to supply shock.”
Stabilizing POKT’s ensures that Pocket’s decentralized ecosystem will continue to attract application developers and niche infrastructure providers currently overseeing more than 35,000 full nodes. It can meet its mission to provide fully decentralized Web3 infrastructure and grow market share with long-term sustainability.
Pocket, a blockchain data ecosystem for Web3 applications, is a platform with cost-efficient economics coordinating and distributing data at scale. It permits seamless and secure interactions between blockchains and applications. With Pocket, blockchain utilization can be integrated with websites, mobile apps, the Internet of Things and more, letting developers put blockchain-enabled applications into the “pockets” of mainstream consumers. For more information, visit Pokt.Network.
- AmyKelly Petruzzella
- Pocket Network