As decentralized applications (DApps) continue to gain momentum among both crypto enthusiasts and regular users, several pain points are beginning to emerge for developers.
It's not uncommon for developers to end up making trade-offs between cost-efficiency, decentralization, privacy, and user experience.
Many of these compromises are the result of challenges at the middleware layer, as DApps have limited choices when it comes to the endpoints they use for interfacing with decentralized infrastructure like blockchains and the InterPlanetary File System (IPFS).
Pocket Network, a blockchain-powered Web3 infrastructure provider, looks to resolve this limitation by providing a no-compromises API protocol for DApps.
About Pocket Network
Pocket Network is a decentralized API designed to help Web3 applications communicate with blockchain networks through an exhaustive network of nodes.
The platform is designed to maximize the efficiency of Web3 applications by tackling some of the major issues that come with connecting to decentralized infrastructure — namely decentralization, reliability, and cost-efficiency.
As a platform that provides RPC access to a variety of decentralized networks, Pocket Network can relay requests to and from many different blockchains. The platform’s approach helps minimize costs for application developers while strengthening the overall crypto economy through a unique node incentivization model.
The Pocket Network ecosystem comprises two major players: the applications and the relay nodes. The two players are staked in an incentivized two-sided marketplace, where nodes earn POKT for servicing API requests and applications stake POKT to pay for the service.
Pocket Network helps to minimize downtime and maximize privacy by allowing applications to access an extensive decentralized network of nodes. This has the simultaneous benefit of bolstering resistance to censorship, helping applications maintain their uptime irrespective of load or other challenges.
Since launching in 2020, the platform has already attracted a host of prominent applications. It has more than 5,000 active nodes, and supports a dozen of the most popular blockchain networks.
Team and key stakeholders
The team behind Pocket Network comes from a range of technical and non-technical backgrounds. The 19-strong Pocket Network team is largely spread across development, engineering, marketing, and HR roles.
Michael O'Rourke is Pocket Network Inc.’s CEO and co-founder. An accomplished developer with a long and storied history of working with high-tech companies, O'Rourke is considered an early innovator in the blockchain space. Luis de Leon is Pocket Network's CTO and second co-founder. As a professional developer with a decade-long background in full stack development roles, de Leon brings a wealth of knowledge to the table.
Other notable individuals include seasoned blockchain engineer and Pocket Core Protocol Lead Andrew Nguyen, heavily experienced builder and creator Adam Liposky (Ecosystem Operations Lead), expert crypto operator Patrick Maguire (Operations Lead), and Alex Firmani, who is Pocket Network’s Director of Engineering and a technical wizard with a wealth of experience in high-tech startups, including Amazon during the dotcom boom.
Many of the Pocket Network core team are also node runners.
Although the foundation behind Pocket Network is built by the team, the community is incentivized to contribute to development and governance. Pocket Network counts a range of established venture funds, node runners, and blockchain firms among its strategic users — including Blockchain.com, Eden Block, Zee Prime Capital, and Monday Capital.
Moreover, the platform already has an extensive network of node operators, including well-respected names such as Skillz, Rivet, Chainstack, and over 5,000 nodes on board.
These node operators, in cooperation with application partners and select community members, are responsible for helping to shape the platform through the Pocket Network decentralized autonomous organization (DAO).
How does Pocket Network work?
Through Pocket Network's unified API, developers can easily interface with any supported blockchain. They no longer need to manually integrate each one individually.
On the surface, Pocket Network works as a simple relay between applications and the network layers they interact with. Communications between the two are serviced by nodes, which process API requests between applications and public databases, and securely return any responses to the application.
The communication between applications and nodes is regulated through a session generation algorithm, which pseudorandomly assigns a group of 5 nodes to an application. These nodes are responsible for handling API requests until they are shuffled later. Nodes are rewarded with POKT tokens in proportion to the number of requests they service during their interaction with an application.
Redundancy and decentralization are ensured by periodically replacing nodes and providing backups in case a node goes down or fails to return any results. This also gives each node an equal chance to participate in the next session.
In order to benefit from the massive redundancy of Pocket Network's node pool, applications need to stake POKT tokens or use a service that stakes on their behalf, such as the Pocket Portal. The throughput each application can use is determined by the size of their stake. Likewise, validators that wish to provide infrastructure services also need to stake POKT. The number of relays allowed per POKT varies over time (e.g. 5.26 relays per POKT per session), as does the reward per validated relay (e.g. 0.01 POKT per validated relay).
The stake put down by nodes is used to ensure that they remain honest in their duties. Validators that are consistently down or frequently return invalid data will have their stake penalized. This is directly enforced by the protocol.
The platform is run by the Pocket DAO, a decentralized autonomous organization run by Pocket users (i.e. application developers and node operators) tasked with making decisions about protocol improvements, economic policy, and ecosystem development through proposal signaling and voting mechanisms.
What problems does Pocket Network solve?
Pocket Network solves a plethora of problems at once. For one, it eliminates the need to overpay for access to blockchain data through platforms like Infura and AWS, by providing an easy-to-integrate network of relay nodes.
Unlike other API providers, Pocket Network allows applications to lower their bandwidth costs to near zero by staking POKT tokens once for a guaranteed daily bandwidth allocation.
It also helps to address the downtime and latency that comes with using centralized node providers, since nodes are incentivized to provide good service and correctly fill requests in a timely manner — or risk being penalized. Because Pocket Network offers massive redundancy by automatically swapping nodes for each session and including multiple nodes in each session, applications can avoid the possible service disruptions that might impact adoption and damage user faith in a project.
Moreover, by using a geographically distributed set of nodes, Pocket Network helps to minimize the latency for applications, improving the user experience by providing a better quality of service. This can also provide Pocket Network integrated applications with a competitive advantage over other players in the space.
Through its unique reward mechanism, Pocket Network helps to solve the problem of node incentivization, which in turn helps to build more robust and secure blockchain networks. By rewarding nodes for processing relays and returning accurate data, Pocket Network ensures applications always have a robust network of nodes to rely on.
Beyond this, Pocket Network eliminates the need to manually integrate and maintain infrastructure to support different blockchain networks, such as Ethereum, Binance Smart Chain, Avalanche, and more. By cutting out a major expense while also providing a way for applications to connect to over a dozen distinct blockchains with almost zero integration requirements, Pocket Network drastically improves the capital efficiency of projects.
Pocket Network tokens
Pocket Network uses the POKT utility token to power its service and a wrapped POKT (wPOKT) token to integrate the core service with Ethereum’s broader ecosystem.
As we previously touched on, both sides of the Pocket Network ecosystem need to stake POKT tokens to participate in its servicing layer. Applications stake POKT in order to begin submitting relay requests, whereas nodes stake POKT to begin servicing requests and earning rewards (in the form of POKT).
The token launched with a genesis supply of 650 million tokens, which were initially allocated as follows:
POKT is unusual among cryptocurrencies, in that it's not actually designed to be spent outside of the Pocket Network ecosystem. Instead, it’s used as prepayment for a daily guaranteed throughput of API requests (for the lifetime of the stake), and also as an incentive for node operators. Under its current monetary policy, the token is inflationary, with new POKT minted by the protocol for distribution to nodes that have contributed to the network’s operation. In the future, the total supply of the token will be capped by the DAO.
Wrapped POKT (wPOKT) is an ERC-20 standardized version of POKT, which can be used throughout the broader Ethereum ecosystem — such as decentralized exchange (DEXs) and other DeFi applications.
The wPOKT token will be 1:1 backed with native POKT and will be made available through a custom-built POKT-wPOKT Ethereum bridge. The token will allow community players to stake their wPOKT on behalf of an application through a “Regen” farming application, helping to subsidize costs for their relays, while providing an opportunity for wPOKT stakers to earn a yield.
Though Pocket Network isn’t the only blockchain API provider in operation today, it is the only blockchain API protocol, and therefore offers more than a few distinguishing features that help to separate it from the competition. Some of the most prominent include:
Pocket Network is built around the concept of community governance, which in this case is handled through a decentralized autonomous organization (DAO).
Different stakeholders in the Pocket Network ecosystem can submit proposals to the DAO and vote on already tabled proposals which can help shape the development and operation of the protocol.
Moreover, individuals can prove their stakeholder status and earn the right to vote in the DAO through a range of gamified pathways known as Pocket Arcade.
It protects privacy
Unlike many infrastructure providers, Pocket Network doesn’t force applications to pass through a centralized intermediary when attempting to communicate with the blockchain.
It also uses session tumbling to automatically select another set of 5 nodes to service the application after every hour.
This ensures applications can better protect the integrity of their own and their users’ data, ensuring no centralized entity can store, sell, or misuse it.
No monthly fees
Pocket Network completely nixes the software-as-a-service (SaaS) model many of its competitors use. Instead, applications are guaranteed a fixed number of API requests each day based on the number of staked POKT. The network automatically adjusts the cost of relays based on the current usage of the network.
The longer they use the service, the more value these apps can extract and the closer their costs get to zero. Pocket Network refers to this as near-zero marginal costs. If the applications decide to stop using the service, they can sell their POKT on the secondary market to recoup their initial expenses.
It resists censorship
The absolute persistence of decentralized applications is one of the key advantages they offer over regular apps. However, this is being gradually undermined by the increased pervasiveness of centralized infrastructure providers.
Pocket Network overcomes this challenge once and for all through its massively redundant node network, which ensures applications maintain as close to 100% uptime as possible. Applications can either connect to Pocket Network’s node network directly through PocketJS to maximize decentralization or use a service that stakes on their behalf, such as the Pocket Portal.
It supports a dozen blockchains
Rather than needing to manually build in support for a variety of blockchains, developers can use the one-stop API to access more than a dozen distinct blockchains — and the list is growing all the time.
The platform is egalitarian in its operation. All applications have the same priority in the network, with the only difference being the number of API requests they can submit based on their total staked POKT.
Likewise, all nodes are given an equal shot at being selected for a session regardless of the size of their stake, ensuring rewards are evenly distributed across the network. This establishes a fair playing field where nodes can be certain of a reliable source of income — provided they play by the rules and offer high quality service.
A look ahead
The majority of the development surrounding Pocket Network is carried out by the Pocket Network Core Team and the Pocket Network Foundation, which is the entity tasked with carrying out the decisions of the DAO.
This team launched a variety of new products and shipped numerous upgrades to the platform in recent weeks, including Pocket Portal — a developer dashboard and management tool; Pocket Core 0.6.3, a major update that includes major quality-of-life improvements; and support for a litany of new chains including xDAI, Avalanche, Polygon, and Binance Smart Chain.
Now, the Core Development Team is focusing on Pocket 1.0, the next game-changing release of Pocket Network that aims to introduce a host of features, scalability improvements, and quality-of-life fixes. Meanwhile, the Pocket Foundation team is laser-focused on building tools that make the platform better, faster, and easier to use for chains of all sizes.
Pocket Network will spend the next few years expanding its service to blockchains large and small. Its permissionless nature and open architecture mean that it’s not bound to traditional integration cycles — the market will dictate the areas the protocol supports. Support for new chains will be able to spin up in days rather than weeks or months, at little cost to users.
In the second half of 2021, Pocket Network will be integrated with the broader DeFi landscape — unlocking a range of new use cases and potential collaborations. Users will be able to stake their wPOKT on Pocket Network's upcoming data farming platform to help subsidize the network bandwidth costs for any application on any blockchain connected to Pocket Network. The wPOKT to POKT bridge will launch shortly after.
“In 2017, part of Pocket’s core thesis was that we would live in a world with thousands of blockchains. We are seeing some ‘unbundling’ of popular Ethereum applications moving to their own blockchains like Compound or Audius embracing Layer 2 solutions. With the advent of Cosmos chains and Parachains, we are well on our way to that reality.
In this future, Pocket shines. As settlement layers get abstracted, Pocket provides one censorship-resistant and cost-effective portal to building on web3 rapidly. Protocol builders don’t want to worry about running infrastructure for their users. Applications don’t want to have a slew of different services as they deploy their smart contracts on multiple platforms.
Infrastructure is a commodity, and through removing middlemen and excessive costs, Pocket is in a prime position to capitalize on this multichain future.” — Michael O'Rourke, Pocket Network Co-founder and CEO
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Project overview of Pocket Network