What is POKT Network?

POKT Network is a decentralized blockchain data platform that can support large-scale data coordination and distribution at a relatively low cost. With POKT Network, developers can easily integrate blockchain technology into websites, mobile applications, IoT services, and other applications, allowing users to interact freely with Dapps that adopt blockchain technology.

The company behind POKT Network is Grove, a DePIN provider (formerly known as Pocket Network Inc.). DePIN refers to a physical infrastructure network built using blockchain technology and token incentives, allowing other projects to utilize these services to deploy Dapps quickly. As a result, they don’t need to purchase and operate their infrastructure to provide RPC and API interfaces, making this track the Web3 version of Amazon Web Services or Google infrastructure services. However, the DePIN track also often presents a narrative in reverse. Our overreliance on these cloud computing infrastructure giants in the Web2 world highlights the significance of decentralized physical infrastructure networks.

Grove has been developing POKT Network since 2017 and launched the mainnet in July 2020. With over 20,000 independent distributed nodes worldwide, it can provide large-scale multi-chain data. Currently, POKT Network supports over 60 chains, including Polygon Mainnet and Ethereum. With a current price of $0.18 and a market ranking of around 196, the network’s native token ($POKT) holds a market cap of slightly over $300 million.

POKT Network has built Gateway on top of its base layer to interact with the POKT Network protocol, making it easier for developers to access public data on the blockchain through infrastructure.

What is Gateway?

POKT Network, as a RPC base layer, is a foundational protocol and network for node operation. If Dapps directly access the POKT Network protocol, it will create lots of friction. Therefore, the native development team Grove and other development teams from the POKT Network Foundation ecosystem have built different Gateways. They are integrated abstractly on top of the RPC base layer of POKT Network to optimize the quality of service (QoS) of the network and facilitate developers to build value-added functions such as analysis, alerts, and team management. In the architecture diagram, POKT Network includes the base layer protocol and a decentralized node network for protocol operation. Different Gateways are running on POKT Network. Dapps can enjoy the benefits of POKT Network simply by accessing the Gateway.

Source: Network Architecture

Why are RPC Nodes Crucial?

POKT Network refers to the RPC base layer. RPC (Remote Procedure Call) nodes can perform various functions in various blockchains, such as querying blockchain data, sending transactions, and creating smart contracts. Developers can execute these operations by sending specific requests to RPC nodes. Then, RPC nodes forward the requests to the blockchain network and return the results to the developers.

Typically, Dapps cannot directly access data from different blockchains. When implementing various features, interacting directly with blockchain networks will incur unnecessary costs during the development process. In essence, POKT Network is to incentivize and coordinate a decentralized supplier network. This network aims to provide access to blockchain RPC nodes, enabling dapps to read/write data from various blockchains. Developers access data from over 60 chains at relatively low costs (reasonable market prices after economies of scale) with low-latency simply using one connection. Such infrastructure ensures that anyone can become an operator of decentralized RPC nodes, and the infrastructure is ultimately owned by users rather than monopolized by specific providers.

Funding Situation

POKT Network (Grove) has raised over $17.9 million so far. The most recent financing was held in November 2023, with $7.9 million raised from Fidelity’s Avon Ventures, Placeholder Capital, and Druid Ventures. According to an email statement publicly disclosed by the team, Grove will use the funds to establish new partnerships and promote DePIN adoption among the general public.

Source: Rootdata

Apart from institutional financing, POKT Network received a $16,396 grant from Aave Grants Recipients for ecosystem application integration in June 2022. Relying on this partnership with the leading open-source liquidity market and lending platform, Aave can access real-time blockchain data (such as prices and smart contract statuses) through RPC node functionality.

The Development Team

Graduating from the University of South Florida, Michael P O’Rourke is the founder and current CEO. He also founded the Tampa Bay Blockchain Developer’s Meetup. Arthur Sabintsev graduated from The George Washington University and is currently the COO and a member of Grove’s board of directors. He was an experimental nuclear physicist in his early days and later worked on iOS development and operations. He has more than ten years of iOS ecological development and leadership experience since 2011, and is also an open source contributor with over 10,000 stars on github.

Problems that POKT Network Solved

Open Data: A Native Idea in Blockchain

POKT Network is designed to provide momentum for unstoppable open data and open infrastructure, ensuring that anyone in the future can become an operator of decentralized RPC nodes, and ultimately allowing users to own the infrastructure for accessing open data.

To explain it with an analogy: we can imagine blockchain as a huge reservoir where data infrastructure like POKT Network is the pipeline and valves beneath the reservoir, and blockchain data is the water stored in the reservoir. The abstracted Gateways on top of POKT Network can be imagined as faucets placed in various locations, directly connecting to wherever water (dapps) is needed. Currently, there are two officially built faucets, and in the future, customized faucets (self-hosted Gateways) will be supported to achieve more diverse functions, such as directly providing purified water to merchants for blending into various beverages to sell to customers.

In the blockchain world, there is inherently no closed data; the concept of open data is fundamentally a “native concept” in blockchain networks. The problem lies in accessibility: can Dapps directly access blockchain data? How can Dapps deal with the risk of supplier bankruptcy with RPC interfaces hosted by a few providers? How to make RPC interface hosting more decentralized? POKT Network assumes that all the water stored in the huge reservoir of blockchain is open, and a complete set of pipeline and valve infrastructure can help us build faucets to connect water to where it is needed.

Those Who Operate Nodes “Own” the Infrastructure

A general example is Uber and Airbnb, which, before their IPOs in 2018, suggested to the SEC, which was soliciting public comments, to expand the rules of 17 CFR § 230.701 so as to allow companies to provide economic rewards to non-employee workers in the form of equity.

17 CFR § 230.701 mainly stipulates the exemption conditions under which companies can issue securities (such as stock options) to employees, consultants, etc., and the proposal made by Uber and Airbnb deviates from the spirit of 230.701; roles such as drivers and landlords, who provide services to platforms but are not employees of the companies, do not meet the conditions for obtaining this exemption to issue securities under 230.701 because specific service providers in the “gig”/“sharing” economy platforms are usually not considered employees, and 230.701 mainly applies to traditional companies and cannot yet cover the labour force in emerging platform economic models.

Akin to many decentralized infrastructure networks, POKT Network hopes to ensure that tokens are distributed to users who provide services in the network through incentive measures and decentralized networks. They believe that whoever operates the RPC node truly owns the open data infrastructure. However, POKT Network’s governance model differs significantly from the typical governance model based solely on token-weighted voting.

Governance Strategy of POKT DAO

The Gini coefficient of POKT DAO’s governance model is 0 (completely equal), and developers have strong decision-making power in managing the protocol, based on a one-person-one-vote basis. However, there are still many challenges in terms of representativeness and complexity. In September 2023, the Modular Governance Foundations Announcement (PGOV2) of POKT DAO (PGOV2) updated the governance model, aiming to address the complexity and technical challenges of implementing the new governance model by using a series of proposals to decompose the new governance model into smaller, manageable modules. The specific approach is to decompose the 3D governance model in PGOV1 into six independent modules:

• Personality (digital identity)
• Citizenship (foundational membership)
• Reputation (references for development and influence)
• Stake (capital deployment)
• Voting & Execution (decision-making and execution)
• Metagovernance (control parameters and decisions)

Each module will be presented independently, and the metagovernance proposal will tie everything together. The expected effect makes the governance model easier to understand and implement, allowing for a more gradual and seamless transition to the new model. Therefore, it realizes a more flexible and composable governance model that can ultimately be replicated by other organizations.

POKT DAO has three types of proposals - PEP (funds), PIP (protocol upgrades), and PUP (parameter updates). In recent times, proposal PIP-37 has sparked much discussion. It involves the reputation system mentioned above: introducing power levels where reputation cannot be bought, which can strengthen the one-person-one-vote governance model.

This unique DAO governance strategy of POKT Network got the nod from Messari analysts in early 2023. The POKT Network’s official website states, “We may be the only revenue-generating web3 protocol not constrained by purely token-weighted voting.”

POKT Network Gateway

Grove API and Nodies DLB are the first two Gateway protocols running on POKT Network, while Liquify is a developing Gateway protocol. On April 9, it was officially announced that three new Gateways from Developer DAO, Raid Guild and Chainstack respectively were added through strategic cooperation.

Grove

Grove provides Grove API, an officially developed Gateway and the first Gateway in the network. The Grove API acts as a performance layer on top of the permissionless protocol, serving as a crucial link between users and the underlying blockchain. It supports the EVM/non-EVM ecosystem. Grove’s infrastructure is optimized for fast performance and designed to meet the rigorous requirements of contemporary blockchain applications. From transaction submissions and blockchain queries to complex smart contract operations, Grove supports fast and seamless interactions.

Nodies

Nodies launched Nodies DLB. The team co-founders had been actively engaged in the POKT ecosystem for a long time before, assisting in developing protocols and Dapps on the network. Projects they participated in include LeanPokt (reducing network costs by more than 99%) and Chocolate Rain (finding and fixing security vulnerabilities), Session Rollup, PocketJS contributions, and overall technical advisory for the entire POKT Network, to name a few. Ultimately, their experience allows the team to build a second Gateway in the network.

Since early 2021, Gateway has been operating redundant nodes across multiple geographic regions to ensure optimal uptime and performance. The Gateway also performs automated advanced monitoring and alerts for all infrastructure, block synchronization times, and delays. Nodies is now the sole public RPC provider representing the POKT Network.

Developer DAO

Developer DAO is the first gateway owned and operated by DAO. It repurposes RPC revenue for the public good and provides censorship-resistant RPC. Its unparalleled network of builders will accelerate innovation and growth. Developer DAO emphasizes a model where technology promotes the common good.

Porters (Raid Guild)

Powered by the Raid Guild, Porters owns technical talent from the leading Web3 developer collective Raid Guild. The group has offered support for nearly 200 Web3 development projects, and Porters will build features and services faster than ever before while adhering to open-source principles. Porters envisions a new era of decentralized infrastructure—a platform built by developers, for developers.

Chainstack

Chainstack, one of the largest and most respected RPC businesses and another provider of the Infura multi-chain RPC network DIN, is poised to quickly direct large volumes of traffic, using POKT Network to increase scale and resilience. Chainstack expects initial relay volume to be ~100 million Relays per day.

Liquify

Liquify is a Gateway currently being integrated. It will enable testing and optimization of the gateway suite developed by Nodies. We will see the impact on network volume by the end of April 2024.

POKT Network Mainnet

Morse

Morse is the current mainnet version of POKT Network, and the last push update was in February 2024. The team has stopped updating and is focusing on the next Shannon upgrade.

Morse is a real-time protocol built on top of the Tendermint framework in the Cosmos ecosystem. Since its launch, the protocol has served nearly 730 billion Relays on over 60 different blockchains using a network of approximately 20,000 nodes located in more than 22 countries.

Source: Mainnet data, taking Block 129,141 as an example

Shannon Upgrade

The next upgrade of the mainnet protocol is named after the father of information theory, mathematician and cryptographer Claude Shannon. The upgrade will be deployed to Celestia’s Mocha testnet in February 2024, and will be deployed to the POKT Network mainnet by the end of the second quarter of 2024.

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Roadmap (Source: Official Documentation)

Several Available Methods for Accessing RPC

POKT Network offers several methods for accessing our decentralized RPC service based on your needs.

1. Using Public Endpoints: These are endpoints hosted by third parties, free but with rate limitations. This access method is suitable for non-custodial wallet users, hackathon developers, or any developers trying out POKT Network.
2. Using Third-Party Gateways: These are webpages hosted by third parties. They provide an interactive interface for developers seeking convenience, and their prices vary depending on the gateway.
3. Using Self-Hosted Gateways: Maintaining access points independently, suitable for enterprises selling RPC services or developers willing to bear higher complexity and autonomy. In addition to self-hosting costs, POKT Network also charges $0.85 for every one million Relays. Currently, Nodies Gateway is preparing to open-source its code, and after the next Shannon upgrade, developers can build self-hosted permissionless gateways on POKT Network, making it easier to customize direct access to protocols for specific dapps.

$POKT Token

Ecosystem Wallets

Previously, the most well-known wallet in the POKT Network ecosystem was SendWallet, developed by @send’s developer @zeroxBigBoss. Around mid-March 2023, the wallet announced the cessation of staking services (already staked $POKT would be returned to users), followed by halting $POKT trading on March 29th. However, as of April, there was no official announcement on Twitter, and the official website became inaccessible, with related plugins still available in the Chrome store, not indicating cessation of operations.

At present, the better wallet choices are POKT Network’s own open-source wallet and NodeWallet recommended by the project. With features such as mnemonic import and compatibility with the wPOKT bridge, NodeWallet is a project that the Pocket Network Foundation will suppor in priority. The plugin design is open-source, and security is enhanced using argon2 + AES-256 GCM for quantum-safe encryption.

Token Economics

$POKT is for incentivizing node operators/Web3 developers to stake nodes and relay blockchain data requests on the network. $POKT was listed on July 28, 2020, with a Genesis token supply of 650 million. Unlike most traditional block rewards, $POKT rewards are dynamic. The amount of minted $POKT is proportional to the number of data relays and transaction fees in a given block, and rewards are distributed among service nodes, validator nodes, and the POKT DAO managing the protocol. 85% of newly minted $POKT in each new block is distributed to node operators, 5% to validators, and 10% to the POKT DAO vault.

Node operators are required to stake a minimum of 15,000 $POKT currently to operate a node, which may increase in the future. Validators must stake enough $POKT to become one of 1,000 validators, which is the protocol-defined cap. According to POKTscan, the current “validator threshold” is 75,550 $POKT. Additionally, sequencers will replace the role of validators in the new Shannon protocol upgrade.

The latest supply schedule for $POKT aims to mint an average of 220,000 $POKT per day, with the specific amount fluctuating based on network request volume. There is some controversy regarding the calculation of the circulating supply of $POKT, with some including the DAO vault and others excluding it. The primary drivers of $POKT supply include the number of $POKT paid to node operators, the number of gateway requests, and the fees per relay. The community can adjust the supply model assumptions based on expectations of $POKT price, node operator rewards, network request volume, and other factors.

All in all, as an incentive token, the issuance rate of $POKT is determined by the actual usage of the network rather than a fixed issuance curve.

Future Partnerships & Conclusion

Infura

In addition to the integration with past close partners like Aave, POKT Network also established a partnership with the popular developer service project Infura.io in 2023. Having been acquired by ConsenSys, Infura.io provides a range of API services, including Ethereum nodes, Eth2 nodes, transaction relay, Layer 2 networks, IPFS, Filecoin, and more.

Thesis Defense

On February 15, 2024, Thesis Defense became the security audit partner for the POKT Network Shannon upgrade. The advanced security auditors and cryptographers at Thesis Defense have audited multiple ecosystems, including Ethereum, Zcash, Stacks, Mina, Polygon, and Bitcoin. They have studied various technologies, including smart contracts, cryptographic protocols, consensus mechanisms, bridging, and wallet/browser extensions.

Their focus in the audit of the Shannon upgrade was Shannon’s Sparse Merkle Tree (SMT), which enables POKT Network to track hundreds of thousands of nodes and trillions of RPC requests with minimal on-chain data.

Rollchains & Celestia

On April 18, 2024, the POKT Network team announced seamless interoperability with the Celestia ecosystem and rollup networks by integrating Rollchains modules and utilizing Celestia’s data availability layer.

Conclusion

Seen from the overall landscape, POKT Network (Grove) has been marginalized by the DePIN track for various reasons. To catch up with the narrative of 2024, they naturally attempted proactive collaboration with interoperability protocols, which will require time to validate their effectiveness.

Overall, public attention towards the only RPC node incentive network in the current Web3 ecosystem has been relatively low. PEP-69 presents a notable case: Messari’s protocol analysis team volunteered to author a comprehensive research report to the POKT DAO, proposing a price of $100,000 worth of tokens for four quarters of work (the last Messari report was written in January 2023). The voting result of the snapshot taken on April 4, 2024, was in favor, so barring any unexpected developments, the first report is expected to be released on June 30, 2024. This may potentially increase public awareness of the POKT Network.