Pocket Network joins Token Terminal as a top 5 revenue protocol
Pocket Network joins Token Terminal as a top 5 revenue protocol
Pocket Network is thrilled to join Token Terminal, a leading crypto fundamental data tool, revealing the outstanding growth of our protocol through pivotal market metrics. From now on, analysts, investors, and the community at large have an additional avenue to follow Pocket’s growth into mainstream awareness. Learn more about how Pocket solves crypto’s multi-chain challenge while creating a new economic model with incentives for all parties.
Pocket Network is the missing piece of the puzzle for crypto’s mainstream adoption. How?
Until Pocket emerged, crypto faced one of its biggest setbacks to streamline data transmission between blockchains and applications: decentralization and incentives.
For crypto’s mainstream adoption to occur, the underlying protocols and applications must serve the end-users and work seamlessly regardless of the networks that operate under.
Much like the internet in the ’90s, the next wave of solutions in the crypto space is working on the common goal to make applications work as integrated as possible, making it a great experience for the end-user.
How Pocket uses decentralization to boost crypto’s multi-chain future
Many of the popular applications in crypto for DeFi, NFTs, or DEX trading need to pull data from different blockchains, which requires building unique infrastructure to accommodate several APIs.
Until now, Web 2 solutions connected to APIs in a centralized manner, raising risks for decentralized projects. Pocket is tackling this issue from the get-go by introducing a solution that guarantees full decentralization of data pulled from every blockchain while creating incentives for users to execute that work.
In essence, Pocket acts as the middleman between applications and blockchains by creating a solution that unifies the infrastructure needed for transmitting data.
$POKT is the incentive ecosystem for Pocket Network to fulfill its goal
Pocket created a double-sided marketplace, where applications developers can access data at a fraction of the cost, while node runners guaranteeing the servicing of data get rewarded for it. At the center of the marketplace is Pocket’s native token: $POKT.
Node runners need to buy $POKT and stake it (at least 15,000 $POKT with possible additional tokens for reassurance). Even though the initial cost may seem higher than alternatives, it is an investment that will significantly reduce costs over time due to the near-zero economics placed into the system.
As time goes by, the maintenance cost of using Pocket reduces, creating long-term incentives for its use and becoming a much more cost-efficient alternative. At the same time, node runners, when servicing relays for applications, get rewarded with $POKT for their work.
Developers that want to link to blockchain data from their applications also need to buy and stake $POKT to have a guaranteed amount of API requests (relays) per session for the life of the stake. This system reduces ongoing costs for developers while creating more use-cases by holding $POKT.
Pocket experienced exponential growth in 2021, servicing 13B+ relays
Pocket has attracted investment from leading venture capital firms and tremendous user growth.
In 2021, Pocket grew to serve 13.9 billion relays, reflecting a 25.8x increase in application relays from 2020. The growth in relays led to more than 138 million $POKT tokens minted and over 18K nodes staked across 17 countries.
One key change that supported this growth was the new onboarding strategy: “Settlers of New Chains.” The more blockchain APIs Pocket can integrate into its solution, the more growth it will experience. However, there are key elements to evaluate and work with to make sure the onboarding goes smoothly.
The new strategy works on two main fronts. First, it offers a revenue incentive for new node runners to start operating right away. Second, it shortens the Whitelist (gives more notice for new runners to set up), allowing them to be in full force to start working with Pocket.
Pocket’s decentralized approach to a full node structure and its Whitelist strategy for new chains allowed us to close the year with over 20 newly supported blockchains, including Harmony, Ethereum, Fuse, Avalanche, and Solana.
Joining Token Terminal as a top 5 protocol by revenue
Amid our growth quest, we couldn’t be more enthusiastic about being featured on Token Terminal as a leading revenue-generating protocol in the new decentralized economy.
Token Terminal is becoming the go-to tool to analyze crypto protocols, bringing traditional financial metrics to the decentralized world, helping analysts to draw fundamental valuation of protocols.
The merge of traditional metrics into crypto is an essential step for its continued institutional adoption, besides contributing to its maturity as a sector.
Analysts can now get a comprehensive overview of the main metrics of Pocket Network and draw their analysis for a protocol that is aligning network effects, native crypto compensation, and next-age infrastructure for the future of Web 3 with a long-term mindset.
Pocket as an incentive protocol, generating growth and revenue from tokenomics
Pocket builds upon the incentive protocol thesis with our native token - $POKT - rewarding the adoption of the network.
The economic model under Pocket encourages early adopters to join the network while being incentivized to boost its infrastructure by interacting with $POKT. Pocket generates more revenue as a protocol by increasing support for more blockchains, node runners, and applications, leading to an everlasting cycle of adoption.
How is revenue generated based on growing adoption?
For both developers and stakers, $POKT is at the center. For every relay served on Pocket Network, 0.01 $POKT is minted. Pocket’s monetary model follows the following formula:
relays * 0.01 $POKT * daily average USD price of POKT
At the core of the revenue formula sits the development of the network itself, meaning the growth it can sustain through the number of relays served. The key element is that the expansion and economic model of the protocol are intrinsically linked to its token.
How is revenue divided between actors in the network?
Node runners receive 89% of the total rewards, while the Pocket DAO gets 10%, and the block producers receive the remaining 1%.
The optimal strategy for node runners is to operate as many nodes as possible with the amount of $POKT they have, increasing their reach and probability of more nodes being chosen to serve relays, earning more rewards. Node runners can gain even more if they are the block producer on each node.
A protocol where token, revenue, and growth feed each other
As actors in the network contribute to its growth, their chance to get more rewards increases, effectively incentivizing all parties to work towards the growth of the infrastructure.
Because of the network effects present in the infrastructure growth/token revenue model, in 2021, Pocket increased its revenue by 1000x, closing December with $50M+ in revenue. According to Token Terminal, Pocket Network is now a top 5 protocol by revenue in the crypto sphere.
Get involved in the future of crypto infrastructure
As a Web 3 solution, Pocket encourages multiple parties to become involved in its ecosystem. The road to Pocket doesn’t end at becoming a node runner or application developer accessing the network.
As we enter this new growth stage by integrating with tools like Token Terminal, we welcome more research, analysis, and discussion on Pocket Network.
Currently, there are many ways to be active with Pocket, whether as a contributor, submitting improvement proposals, voting, producing content, and, in the future, even becoming a farmer of $wPOKT.
Stay tuned for updates and join our Discord community.