In 2020, the API of Infura, which provides the underlying data service for Ethereum, suddenly failed, resulting in UniswapOther popular applications were also unavailable, and the Ethereum network was once paralyzed. With the rise of DeFi ecological applications, people’s attention to the underlying infrastructure of Web3 has begun to increase.
One named Pocket NetworkAs early as 2017, the Web3 middleware service agreement has been deeply involved in the Web 3.0 infrastructure track. The project mainly provides RPC relay services for various application builders by providing a unified API, and cross-validates the data to ensure the accuracy of the data and the censorship resistance of network nodes.
On January 5th, Pocket Network co-founder & CEO Michael O’Rourke visited the Planet Chaohua Community to explain in detail how Pocket Network creates a powerful open source infrastructure layer for Web3 applications.
The following is a record of the community dialogue:
Odaily Planet Daily: Pocket Network is a distributed API infrastructure built for Web3 applications , providing a trustless API layer. In view of the fact that some readers don’t know much about Pocket Network , I would like to ask you to give us a brief introduction to the project and its development.
Michael O’Rourke:Pocket Network is a decentralized blockchain API built for Web3 applications, which transmits data to any blockchain through a network of thousands of nodes. If you are familiar with Infura or Alchemy, you can think of Pocket Network as a decentralized multi-chain alternative. Since its launch on July 28, 2020, the Pocket mainnet has been running for more than a year and a half.
Odaily Planet Daily: The vast majority of Web3 projects currently focus on the application layer, such as Uniswap and MakerDAO . Why did you choose the Web3 middle-tier track to cultivate infrastructure? Could you please introduce the background of the establishment of the project and your original intention and goals?
Michael O’Rourke:In 2016, when I was working in a start-up company, I met my jointFounder. In 2017, we built a smart contract application while noticing the huge influence of Infura, the only network provider at the time. Infura meets the key needs of developers who need to access Ethereum , but there is also a huge single point of failure, and a failure occurred in November 2020.
Soon after, we published a white paper on economics. In 2019, we launched the smallest feasible Pocket . The incentive testnet was launched in February 2020. After several months of incentive network testing, we officially launched the Pocket Network mainnet at the end of July 2020.
In addition, before Pocket Network, the incentive to run full nodes was zero, which led to the centralization of nodes across blockchain networks. Now, the Pocket Network protocol and POKT token are creating value for node operators on the blockchain networks we support (such as Harmony, xDAI, and Ethereum).
Odaily Planet Daily: The native token of Pocket Network is POKT . Can you tell us about its economic model and usage scenarios?
Michael O’Rourke: Pocket Network uses its own cryptocurrency, POKT, to create a permissionless bilateral market between node operators running full nodes and developers who want to query blockchain data for their applications/services.
Pocket Network requires developers and node operators to pledge their token POKT to participate in network activities. Since both parties in the market have unique incentive mechanisms, the pledge mechanisms of the two parties are different.
Developers need to provide reliable infrastructure and number of relays for their applications. By staking POKT, they can get free available relays during the staking cycle. The number of POKTs that need to be pledged is proportional to the number of relays required. At present, for every POKT pledged, 13.3684211 relays can be used in one session (a session is 60 minutes long), but the governance mechanism will adjust this parameter in due course according to the price fluctuation of the POKT token.
Node operators also need to pledge POKT in each node. The minimum staking required to run a single node is 15,000 POKT. In order to prevent penalty reduction, tens to hundreds of POKTs are usually pledged. Unlike most traditional block rewards, Pocket Network rewards are dynamic: POKT rewards are proportional to the number of relays and transaction fees in a given block. One successful relay service will cast 0.01 POKT as a reward. 89% of them are allocated to service nodes that complete relay work, 10% enter the Pocket DAO Foundation, and 1% go to verification nodes that generate blocks.
Odaily Planet Daily: SomeWeb3.0Applications may use traffic to generate revenue and charge fees to generate revenue. What is the revenue model of Pocket Network? Could you please introduce the current revenue situation?
Michael O’Rourke:Both sides of the market-application developers and node providers will buy and pledge POKT. As we said before, one successful relay service will cast 0.01 POKT as a reward. The agreement will automatically distribute it to 3 parties:
- 89% are allocated to service nodes that complete relay work
- 10% enter the Pocket DAO Foundation
- 1% goes to the block producer (that is, the verification node that generates the block)
With the exponential increase in the amount of relays, the protocol income also increases exponentially. The following is the latest data from the past few months:
- August | 563,452,837 relays → 5,634,528.37 POKT → $1,355,290.82 → 315.70%
- September | 906,418,268 times relay → 9,064,182.68 POKT → $ 3,009,646.82 → 222.07 %
- October | 1,761,414,010 times relay → 17,614,140.1 POKT → $ 9,162,335.35 → 304.43 %
- November | 3,761,085,065 times relay → 37,610,850.65 POKT → $ 30,411,879.24 → 331.92 %
- December | 5,783,384,872 times relay → 57,833,848.72 POKT → $ 56,881,264.53 → 187.04 %
Since July 2021, the monthly average increase has been 244.72%. At the same time we see that other services in the ecosystem are built on the Pocket network protocol (and profitable), which is so cool.
Odaily Planet Daily: With the development of blockchain networks, the trend of node centralization is inevitable, but this can easily lead to a single point of failure. In November of last year , the Infura infrastructure on Ethereum failed, and the implications were wide- ranging . What measures has Pocket Network taken to avoid a high degree of centralization of nodes?
Michael O’Rourke:Some blockchain networks have this problem, but this is not the case with Pocket Network, because our economic model encourages node operators to expand their nodes in order to seize more opportunities to randomly choose to participate in work, serve applications and earn money POKT. This is the full node incentive!
People are already running nodes in different settings, from home bare metal servers to local data centers to cross-regional cloud providers. This minimizes the possibility of a single point of failure and network failure due to certain unforeseen black swan events (such as an AWS overhaul in a certain area of the United States).
We also see that as new application traffic centers appear in different regions, nodes are also distributed all over the world. These node operators are competing to deploy nodes where needed to reduce the delay between applications and nodes.
Odaily Planet Daily: Four years have passed since the Pocket Network was established. Can you tell us about the achievements of the current project (the number of nodes and other on-chain data)? In the past 2021, has there been any major changes in data performance? Regarding several years, what are your development expectations at the data level?
Michael O’Rourke: Section point increase is very significant. Pocket Network increased from 589 nodes to the beginning of today’s 18,637 nodes. This means an increase of 31.6 times!
I believe that nodes will grow with the increase in the amount of relays, because operating more nodes can maximize the benefits of node operators. The more nodes, the more opportunities to provide services for applications, because regardless of the number of pledges , Each node has the same chance of being selected.
The increase in relay volume and protocol revenue has already been answered above.
Odaily Planet Daily: I learned that POKT will actually be issued continuously as the number of node verifications increases. Will this cause serious inflation? What measures have you taken to solve these problems?
Michael O’Rourke: The growth of nodes will not cause inflation. The generation of POKT is directly proportional to the amount of relay (API request) that the node provides services through the network. One successful relay service will cast 0.01 POKT as a reward. This validates the economic model of POKT: better services attract more applications → more application usage generates more node revenue → more node revenue attracts more nodes → more nodes increase redundancy → better services Attracting more applications → The growth of relays has promoted the growth of protocol revenue.
As previously emphasized, agreement revenue has increased by 244.72% on average each month since July 2021.
Since the Pocket Network is still in the growth stage and only provides services for hundreds of millions of relays per day, inflation is not a problem at all at present, especially in the current stage of the entire encryption industry, the TAM on the blockchain network is tens of trillions per day ( To the fourth power of one million) times of relay.
Some community members are discussing how to limit inflation in the latest proposal PUP-11: WAGMI Inflation .
Odaily Planet Daily: In addition to Pocket Network , there are also many decentralized solutions on the market, such as Biconomy . Compared with these competing products, what differentiated advantages does Pocket Network have? (Compare in terms of efficiency, cost, etc.)
Michael O’Rourke: First of all, we do not regard these other “decentralized solutions” as competitors. Instead, think of them as a complementary part of the decentralized Web3 developer stack. Each of these application-specific middleware protocols or “infrastructure Lego” provides solutions for different layers of the stack: The Graph belongs to the index layer, and Arweave belongs to the storage layer.AkashIt belongs to the cloud layer, Livepeer belongs to the video transcoding layer, and Pocket belongs to the RPC layer.
In order to prove the composability of middleware, we encourage developers to build projects that integrate The Graph and Pocket during the ETHonline hackathon. For example, ERCgraph uses Pocket Network to obtain ERC20 data, and then uses The Graph to obtain Uniswap,BalancerandSushiswapFund pool information: ERCgraph uses Pocket Network to get ERC20 data then the Graph to fetch Uniswap, Balancer, and Sushiswap pool information . ETHonline 2021 update: BlockHook , Proxy Poster , and Li . Finance Bridge Aggregator Analytics .
It is more appropriate to compare these decentralized solutions with their corresponding centralized solutions. Let us return to Pocket Network.
In the old model, developers would obtain network access from Infura. For example, for 1 million requests per day, Infura charges developers $225 per month (plus $250 file fees).
With Pocket Network, there are no more monthly sunk costs (that is, the fees paid for using relay services). Developers only need to pre-stake POKT for their applications, and they can get a network relay that can be used for free throughout the pledge period. Currently, for each POKT pledged, 13.37 relays can be used in one session. Based on 1 million relay requests per day, Pocket’s initial one-time (and recoverable) cost is 3116 POKT. Infura’s solution requires continuous payment for relays, and the cost cannot be recovered.
The longer the application pledges and uses Pocket Network, the closer its cost is to zero. This economic concept is called near-zero marginal cost. After a period of time, the service is basically free.
One point that needs to be emphasized is that the developer can release the pledge at any time and then resell POKT on the secondary market to recover its initial cost. In addition, Pocket DAO can also adjust the economic leverage according to different development/maturity stages, that is, adjust the relay rate corresponding to each POKT. This makes decentralized RPC services (as a protocol) reasonably priced for developers; at the same time, it is more competitive than centralized RPC providers. For example, at first, the pledge rate relayed to the POKT application was 25k POKT corresponding to 1 million requests per day, and then updated to 8k POKT corresponding to 1 million requests per day, and now it is 3.1k POKT corresponding to 1 million requests per day.
By making full use of the economic models of these different middleware protocols, developers can actually achieve huge savings without sacrificing the benefits of decentralization.
Odaily Planet Daily: At present, the market is still dominated by centralized infrastructure solutions, and some Web3 applications will still choose to build on the Amazon cloud. In your opinion, in the long run, which solution will eventually become mainstream, and why?
Michael O’Rourke: In the long run, middleware agreements will replace these legacy middlemen. In the old model, middlemen get value from users. In the new model, users (our developers/applications) derive value from the middleware agreement. The old model will not be able to compete with the cost-effectiveness and other emerging advantages of middleware protocols such as Pocket Network.
Odaily Planet Daily: Can you introduce your partners?
Michael O’Rourke: I am very happy to introduce some of our recent partners.
We worked with Harmony to migrate and manage a portion of their public RPC traffic. The Harmony ecosystem is one of the most trafficked networks. You can view it yourself on the web browser POKTscan built by our community: https://www.poktscan.com/public/dashboard
We are also working with another blockchain Fuse to support their network. The DAOs of the two agreements exchanged tokens to pay for network usage costs. FUSE is another network with a lot of traffic.
We have also established partnerships with DFDAO and Rocket Pool, which bring a lot of traffic to the xDAI and Ethereum networks respectively. In addition, there are Time Leap, EarniFi, Ferrum, Flowewrpatch, Wall Street Ninja and DxDAO, etc. EthersJS and MyCrypto have been with us for a long time!
Odaily Planet Daily: The Pocket Network team are all extreme hackers who focus on the technical field. Can you tell us about the background of your core team members?
Michael O’Rourke: Here are the backgrounds of some of our core team members:
Luis C De Leon. Luis is a system engineer and entrepreneur, good at implementing products from conception to implementation in the most effective way. He has co-founded a number of start-up companies with printhouse.io in his home country of the Dominican Republic, involving finance , telecommunications, social media, and art. He has rich experience. His goal is to introduce the high-energy productivity engine of the traditional Internet into the encryption field, and Pocket makes him one step closer to achieving this goal.
Alex Firmani. Alex is currently the engineering director of PNF; he worked for an industry-leading media company in Los Angeles for 18 years as a technical manager, established a research and development team, and served as the chief technology officer for 8 years before leaving in 2016. A cryptocurrency payment system was put into use for the first time in 2013. Since 2017, he has been engaged in architecture and engineering work in a cryptocurrency company full-time.
Jack Laing. Jack is a governance architect and has been deeply involved in the booming DAO ecosystem for many years. After finishing his thesis on this topic at Oxford University, he collaborated with Colony to create the leading DAO publication, and now leads all community governance work for Pocket Network. Jack believes that DAOs are the most important management innovation since the stock company, and the most important political innovation since trias politica. His goal is to lead the DAO revolution, starting with the Pocket Network.
Adam Liposky. A Dam, is a venture capital and start-up veteran. He is a full operations officer and has played a key role in the organizational expansion of multiple cryptocurrency projects. His enthusiasm for cutting-edge technology and novel organizational structure drove his interest in blockchain, making his first foray into the field in 2017. He currently mainly helps Pocket Network implement the agreement economy and key growth plans.
Odaily Planet Daily: Next , in terms of market and technology, what new activities or plans will you have. Could you please introduce the project roadmap?
Michael O’Rourke: In general, you can pay attention to the following things:
- The upcoming #redPOKT red envelope lucky draw
- Support more blockchains
- Build partnerships with more applications and agreements
- wPOKT pass and mining program
- POKT<>wPOKT Token Bridge
- Improvement of Pokcet website
- Pocket 0.8.0 protocol upgrade
- Pocket 1.0 specification
Our team will continue to work hard, welcome attention!