In 2020, the API of Infura, which provides underlying data services for Ethereum, suddenly failed, making popular applications such as Uniswap 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.

A Web3 middleware service protocol called Pocket Network has been deeply involved in the Web 3.0 infrastructure track as early as 2017. 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 anti-censorship of the network nodes.

The following is a transcript of the community conversation:

The following is a transcript of the community conversation:

Odaily: Pocket Network is a distributed API infrastructure built for Web3 applications, providing a trustless API layer. Since some readers know little 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, delivering 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. The Pocket mainnet has been running for over a year and a half since its launch on July 28, 2020.

Odaily: At present, most Web3 projects focus on the application layer, such as Uniswap and MakerDAO. Why did you choose the Web3 middle layer track and deepen the infrastructure? Can you tell us about the background of the establishment of the project as well as your original intention and goals?

Michael O'Rourke：In 2016, I met my co-founder while working at a startup. In 2017, we built smart contract applications while noticing the massive impact of Infura, the only network provider at the time. Infura fulfills a critical need for developers who need access to Ethereum, but at the same time has a huge potential single point of failure, and in November 2020 the failure really happened.

Shortly after, we published the white paper Economic Papers. In 2019, we launched the smallest viable Pocket. Incentivized testnet launched in February 2020. After months of incentivized testing, we officially launched the Pocket Network mainnet at the end of July 2020.

Additionally, prior to Pocket Network, there was zero incentive to run a full node, which led to centralization of nodes across blockchain networks. Today, the Pocket Network protocol and POKT tokens are creating value for node operators on our supported blockchain networks such as Harmony, xDAI, and Ethereum.

Odaily: The native token of Pocket Network is POKT. Can you introduce its economic model and usage scenarios?

Michael O'Rourke：Pocket Network uses its own cryptocurrency, POKT, to create a permissionless two-sided marketplace between node operators running full nodes and developers who wish to query blockchain data for their applications/services.

Pocket Network requires developers and node operators to stake their token POKT in order to participate in network activities. Since both sides of the market have unique incentives, the staking mechanisms for both sides are different.

Developers need to provide reliable infrastructure and the number of relays for their applications. By staking POKT, free available relays can be obtained during the pledge cycle. The amount of POKT that needs to be staked is proportional to the number of relays required. Currently, for every POKT pledged, 13.3684211 relays can be used in one session (one session is 60 minutes long), but the governance mechanism will adjust this parameter in due course according to the price fluctuation of POKT tokens.

Node operators also need to pledge POKT in each node. The minimum stake required to run a single node is 15,000 POKT, and an additional tens to hundreds of POKT are typically staked to prevent slashing penalties. Unlike most traditional block rewards, Pocket Network's rewards are dynamic: POKT rewards are proportional to the number of relays and transaction fees in a given block. A successful relay service will mint 0.01 POKT as a reward. 89% of them are allocated to the service nodes that complete the relay work, 10% go to the Pocket DAO Foundation, and 1% go to the verification nodes that generate blocks.

Odaily: Some Web3.0 applications may use traffic to earn revenue, and charge fees to earn revenue. What is Pocket Network's revenue model? Can you please introduce the current revenue situation?

Michael O'Rourke：Both sides of the market—application developers and node providers—buy and stake POKT. As we said before, 0.01 POKT will be minted as a reward for 1 successful relay service. The protocol automatically distributes it to 3 parties:

• 89% are allocated to the service nodes that complete the relay work

• 10% goes to the Pocket DAO Foundation

• 1% goes to the block producer (that is, the verification node that generated the block)

As relay volumes grow exponentially, protocol revenue also grows exponentially. Here are the latest figures for the past few months:

• August| 563,452,837 relays → 5,634,528.37 POKT → $1,355,290.82 → 315.70%

• September | 906,418,268 relays → 9,064,182.68 POKT → $3,009,646.82 → 222.07%

• October | 1,761,414,010 relays → 17,614,140.1 POKT → $9,162,335.35 → 304.43%

• November | 3,761,085,065 relays → 37,610,850.65 POKT → $30,411,879.24 → 331.92%

• December | 5,783,384,872 relays → 57,833,848.72 POKT → $56,881,264.53 → 187.04%

Since July 2021, the average monthly increase has been 244.72%. At the same time we see other services in the ecosystem build on the Pocket network protocol (and make money), which is cool.

Odaily: With the development of the blockchain network, the trend of node centralization is inevitable, but this can easily lead to a single point of failure. In November last year, Infura, the infrastructure on Ethereum, failed and involved a lot. What measures does Pocket Network take to avoid high node centralization?

Michael O'Rourke：Some blockchain networks will 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 POKT. This is full node incentives!

People already run nodes in different setups, from home bare metal servers, to on-premises data centers, to cross-regional cloud providers. This minimizes the possibility of single points of failure and network downtime due to some unforeseen black swan event, such as an AWS overhaul in a certain region of the United States.

We also see nodes spread across the globe as new application traffic hubs emerge in different regions. These node operators race to deploy nodes where they are needed to reduce latency between applications and nodes.

Odaily: It has been four years since the establishment of Pocket Network. Can you introduce the achievements of the current project (data on the chain such as the number of nodes)? In the past 2021, have there been major changes in data performance? Regarding the next few years, what are your development expectations at the data level?

Michael O'Rourke: FestivalThe point growth is very significant. Pocket Network has grown from 589 nodes at the beginning of the year to 18,637 nodes today. This represents a 31.6-fold increase!

I believe that nodes will grow with the number of relays, because operating more nodes can maximize the benefits of node operators, the more nodes, the more opportunities to serve the application, because no matter the amount of pledge , each node has the same chance of being selected.

The growth of relay volume and protocol revenue has already been answered above.

Odaily: I understand that POKT will actually be issued continuously with the increase in the number of node verifications. Will this cause serious inflation? What steps have you taken to address these issues?

Michael O'Rourke：The growth of nodes does not cause inflation. The generation of POKT is proportional to the number of relays (API requests) that nodes provide services through the network. A successful relay service will mint 0.01 POKT as a reward. This verifies POKT's economic model: better service attracts more applications → more application usage generates more node revenue → more node revenue attracts more nodes → more nodes increase redundancy → better service Attract more applications → growth in relays drives protocol revenue growth.

As highlighted earlier, protocol revenue has grown an average of 244.72% each month since July 2021.

Since Pocket Network is still in its growth phase and is only serving hundreds of millions of relays per day, inflation is not an issue at all right now, especially at the current stage of the entire crypto industry, where there are trillions of TAMs on the blockchain network per day ( to the fourth power of one million) relays.

Some community members are discussing how the latest proposalPUP-11: WAGMI Inflationlimit inflation.

Odaily: In addition to Pocket Network, there are many decentralized solutions on the market, such as Biconomy. Compared with these competing products, what are the differentiating advantages of Pocket Network? (Compared in terms of efficiency, cost, etc.)

Michael O'Rourke：First, we don't see these other "decentralized solutions" as competitors. Instead, think of them as complementary parts of a decentralized Web3 developer stack. Each of these application-specific middleware protocols, or "infrastructure Legos," provides a solution for a different layer of the stack: The Graph is the indexing layer, Arweave is the storage layer, Akash is the cloud layer, and Livepeer is the video transcoding layer. code layer, Pocket belongs to the RPC layer.

To demonstrate the composability of middleware, developers are encouraged to build projects that integrate The Graph and Pocket during the ETHonline Hackathon. For example, ERCgraph uses Pocket Network to get ERC20 data, and then uses The Graph to get Uniswap, Balancer, and Sushiswap 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 centralized counterparts. Let's go back to Pocket Network.

In the old model, developers would ask Infura for permission to use the network. For example, for 1 million requests per day, Infura charges developers $225 per month (plus a $250 archive fee).

With Pocket Network, there are no more monthly sunk costs (that is, the fees you pay for using relay services). Developers only need to pre-stake POKT for their applications and get network relays that are free to use for the entire staking cycle. Currently, for every POKT staked, 13.37 relays can be used in one session. Based on 1 million relay requests per day, the initial one-time (and recoverable) cost of Pocket is 3116 POKT, while the solution provided by Infura requires continuous payment for relay, and the cost cannot be recovered.

The longer an application stakes and uses Pocket Network, the closer its cost will be to zero. This economic concept is known as near-zero marginal cost. After a while, the service is basically free.

It is important to emphasize that developers can unstake at any time and then resell POKT on the secondary market to recover their initial cost. In addition, Pocket DAO can also adjust economic leverage according to different development/maturity stages, that is, adjust the relay rate corresponding to each POKT. This makes decentralized RPC services (as protocols) affordable for developers; and competitive with centralized RPC providers. For example, initially, the stake rate for relaying to the POKT application was 25k POKT for 1 million requests per day, then it was updated to 8k POKT for 1 million requests per day, and now it is 3.1k POKT for 1 million requests per day.

By leveraging the economic models of these different middleware protocols, developers can actually realize huge savings without sacrificing the benefits of decentralization.

Odaily: At present, the market is still dominated by centralized infrastructure solutions, and some Web3 applications will still choose to build based on Amazon Cloud. Which solution do you think will eventually become mainstream in the long run and why?

Michael O'Rourke：In the long run, middleware protocols will replace these legacy middlemen. In the old model, intermediaries capture value from users. In the new model, users (our developers/applications) get value from the middleware protocol. 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: Can you introduce your partners?

Michael O'Rourke：I'd be more than 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 see for yourself on POKTscan, our community-built web browser:https://www.poktscan.com/public/dashboard

We are also working with another blockchain, Fuse, to support their network. The DAOs of the two protocols exchange tokens to pay for network usage. FUSE is another network with a lot of traffic.

We also have partnerships with DFDAO and Rocket Pool, which drive significant traffic to xDAI and the Ethereum network, respectively. In addition, there are Time Leap, EarniFi, Ferrum, Flowewrpatch, Wall Street Ninja and DxDAO to name a few. EthersJS and MyCrypto have been with us for a long time!

Odaily: 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 is the background of some of our core team members:

Luis C De Leon. Luis is a systems engineer and entrepreneur who specializes in taking products from conception to implementation in the most efficient way possible. He has experience co-founding several startups with printhouse.io in his native Dominican Republic, spanning finance, telecommunications, social media, and the arts. His goal is to import the high-energy productivity engine in the traditional Internet into the encryption field, and Pocket brings him one step closer to achieving this goal.

Alex Firmani. Alex is currently Director of Engineering at PNF; he spent 18 years at an industry-leading media company in Los Angeles, where he served as a technology manager, built the R&D team, and served as CTO for 8 years, leaving in 2016. First put into use a cryptocurrency payment system in 2013, and has been working full-time in architecture and engineering for cryptocurrency companies since 2017.

Jack Laing. Jack is a governance architect who has been involved in the thriving DAO ecosystem for many years. After completing his dissertation on the topic at Oxford, he collaborated with Colony, created the leading DAO publication, and now leads all community governance efforts at Pocket Network. Jack believes that DAOs are the most important management innovation since joint-stock companies and the most important political innovation since trias politica. His goal is to lead the DAO revolution, starting with Pocket Network.

Adam Liposky. Adam is a veteran of VCs and startups. He is a general operations officer who has played a key role in the organizational expansion of several cryptocurrency projects. His passion for cutting-edge technology and novel organizational structures drove his interest in blockchain, first foraying into the field in 2017. He is currently helping Pocket Network execute protocol economics and key growth initiatives.

Odaily: Next, what new activities or plans will you have in terms of market and technology? Could you please introduce the project roadmap?

Michael O'Rourke：In general you can focus on the following things:

• Upcoming #redPOKT Red Packet Sweepstakes

• Support more blockchains

• Partnerships with more apps and protocols

• wPOKT Token and Mining Program

• POKT<>wPOKT Token Bridge

• Improvements to the Pokcet website

• Pocket 0.8.0 protocol upgrade

• Pocket 1.0 specification

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