Author: Michael O’Rourke, Co-Founder and CEO, Pocket Network, Inc.
When we first dreamed of wPOKT 15 months ago, Pocket Network was in a very different place. We saw it as a way to take the burden off of the Pocket Network Foundation for free tier staking and a way to get communities involved.
Back when we released the original wPOKT farming green paper, we were doing only 5M relays a day, had only 600 nodes on the network, and supported only two blockchains. Today, thanks in large part to the Portal, we are serving over 200M relays a day with over 30+ chains and have over 30,000+ nodes on the network across 24 countries. Needless to say, things are vastly different than they were back then. As such, we need to adjust our strategy regarding wPOKT.
While we still believe in the fundamentals of a data farming program, it no longer fits cleanly in the Pocket ecosystem in the way in which it was originally envisioned. Proposals like PUP-9: Gigachad Pocket Portal Free Tier and PUP-7: Whole Lotta Requests have made the wPOKT data farming program less and less relevant, practically eliminating the utility of the program. What was left after these proposals was a husk of a former idea, one we held onto and didn’t abandon fast enough – that’s on us. We owe it to the community to hold ourselves accountable and focus on activities that will have an outsized impact on the growth of the network, rather than hold onto ideas that are past their prime.
In light of these successes and due to the shifting landscape of Pocket, it is our opinion that we should stop development on the wPOKT farming application and deliver only the wrapped token (wPOKT), so that we can narrow the focus of our engineering resources on enhancing the core products and tooling that have been responsible for our success so far.
So what does this mean for wPOKT?
To be clear, we are still launching the wPOKT token, but we won’t be launching a farming application. We believe wPOKT is critical to governance efforts and payments to Pocket DAO participants. We understand that there is a need for ERC-20 implementations of POKT in both DeFi and the greater EVM development space. That said, the wPOKT farming application will no longer be a focus of the core team.
So why are we letting it go?
- wPOKT Farming became a distraction from our core drivers of growth
- The need for liquidity has been sufficiently met which means that the LBP is no longer required
- The need for relay subsidies has passed due to PUP-9
- It would be wise to limit the risks of wPOKT as bridges are consistently victims of attacks and exploitation
- wPOKT experimentation can be an organic community effort (everything we’ve built is open source)
It is a distraction from our core drivers of growth
The Portal has been the core to our success over the last 8 months. The Portal, in its current form, did not exist when we first began thinking about wPOKT. Instead of focusing on the Portal, which drives our growth, we’re now forced to divide our attention on wPOKT, which has proved a distraction detrimental to growth. We have big plans for the Portal, and we’re better off focusing all our resources behind improving the Portal than launching an entirely new product that divides resources and attention.
The need for liquidity has been sufficiently met
When we started the wPOKT project, it was unclear how long it would take for POKT to be adopted by exchanges. A beneficial side effect of the wPOKT farming application was the Copper launch with AMM liquidity. Even if POKT were to remain unlisted, the bridge to wPOKT and DEXes would provide a backup. However, due to the success of the Portal and the growth it brought us, we are now listed on exchanges and our liquidity needs have been sufficiently met for where we are in our project lifecycle. While we believe in ensuring that Pocket remains as open to the community as possible, we feel an LBP would now be a distraction from the core mission of driving relays to the network and native integrations with POKT.
The need for relay subsidies has passed
When we envisioned wPOKT as a flywheel on relay growth, we were doing about 5M relays a day. Now we are doing over 200M relays a day, driven single handedly by the Portal.
We’ve gone through several phases of the protocol as we’ve grown. When we launched we spent 10 months seeding the supply-side (nodes) of the network and optimizing the quality of service for applications. We then passed a quality threshold, launched the Portal, and we’ve seen the benefits of growth over the last 7 months. Now that we’ve bootstrapped a healthy supply-side (nodes), we are setting our sights on ensuring the sustainability of Pocket’s economy for the long run by refining the Portal experience and educating the demand-side (app developers) on the value of purchasing and staking POKT. This is our number one priority with the Portal.
The recently introduced Portal Gigastakes provide as many relay subsidies as we will need moving forward – with the Pocket Network Foundation staking on behalf of all applications today – eliminating the need for crowdsourced staking. This will enable us to scale a free tier horizontally to many more applications, however, we plan to lower subsidies over time for larger applications as we introduce paid tiers to the Portal.
While having an aggressive free tier has allowed us to demonstrate the power of decentralized infrastructure, as the protocol continues to mature we should begin enabling the applications we serve to become paying customers and owners of the underlying network. wPOKT farming unfortunately distracts from this objective.
It would be wise to limit the risks of wPOKT
We’ve all seen the risks of bridges over the last several years, most recently with the wormhole hack. Cross-chain bridges are complex and bring significantly more technical risk to both the protocol and the entire Pocket ecosystem. It would therefore be wise to keep wPOKT small, allowing for Pocket Network to experiment with various types of DAO and payment infrastructure, and let DeFi organically experiment with other wPOKT use cases.
wPOKT experimentation can be an organic community effort
In the last year, Pocket’s community has demonstrated their creativity in full force, with innovations such as staked node aftermarkets, OTC bots, fractional staking pools, and ERC-20 staking tokens. This indicates to us that, if wPOKT farming is truly a need that the community has, they will make it happen. Perhaps we can have our cake and eat it too; the core team can focus on using the Portal to continue to drive relay growth, while the community experiments with creative wPOKT use cases.
What do I propose we do next?
I have put up a proposal to revise the POKT allocation granted in PEP-5. The proposal will narrow the budget to only a limited amount of POKT for seeding the bridge and AMM liquidity.
As soon as one of the bridges is completed after audits, and we find consensus on a proper launch for wPOKT, I say we move forward with it in a lighter, more cautious fashion. We will still have a need for the wPOKT multisig signers selected in PIP-10. We look forward to launching wPOKT in the near future.
Thank you for your understanding everyone. This has been a difficult and bittersweet decision for me, though myself and the team are confident it is the right one. Onward and upward.