What is POKT Network?

Summary: POKT Network is a decentralized platform, launched in 2017, that significantly enhances blockchain interoperability and functionality by linking users across more than 50 blockchain networks. It leverages over 20,000 independent nodes worldwide, providing a resilient, decentralized alternative to traditional RPC services.

The upcoming Shannon Upgrade aims to enhance this framework by implementing a micro-rollup using Rollkit with Celestia for data availability, marking a significant shift towards a more modular and efficient system.

What is POKT Network?

Launched in 2017, POKT Network is a decentralized protocol aimed at enhancing blockchain functionality. It acts as a connector between various blockchain networks and their users, providing a reliable decentralized alternative to traditional, centralized RPC services. The platform supports more than 50 layer 1 and layer 2 chains, offering broad access to data and transaction verification.

At the core of POKT Network's operations are its node runners and gateways. The network operates with over 20,000 independent nodes spread across the globe, ensuring strong security and reliable performance, including a 99.99% uptime and latency below 50 milliseconds. Users access blockchain data through gateways like Nodies and Grove, which are crucial for the network's reach and ongoing expansion.

The POKT token drives the network's economy, motivating engagement and participation within the ecosystem. Governance of the network is managed by a Decentralized Autonomous Organization (DAO), upholding transparent and fair decision-making processes.

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How Does POKT Network Work?

POKT Network functions as a decentralized platform for RPC (Remote Procedure Call) nodes, revolutionizing access to blockchain data and transaction handling. Here’s a clear breakdown of its operation:

• ‍Decentralized Node Marketplace: Differing from centralized options such as Infura, POKT Network doesn’t own any nodes. Instead, it links users to a worldwide network of independent providers, known as Service Nodes. This structure reduces costs, boosts reliability with a 99.9% uptime, and guards against censorship.‍
• $POKT Token Mechanism: Operation within the network is driven by the $POKT token. Both customers and Service Nodes deploy $POKT as security to participate. Users send requests for blockchain connections that the software routes to Service Nodes efficiently. These nodes manage blockchain interactions and data transmission, maintaining service continuity even when individual nodes experience issues.‍
• Validation and Rewards: Validator Nodes assess the authenticity of transactions handled by Service Nodes. When transactions are verified as legitimate, POKT deducts from the user’s staked collateral, allocating 89% of the fees to the Service Node, 1% to the Validator Node, and 10% to the community-managed PocketDAO.

This framework makes POKT Network a versatile, economical, and dependable choice for Web3 applications, addressing traditional issues of centralization and reliability in node providers and establishing itself as a crucial component in the growing multi-chain crypto environment.

Shannon Upgrade

The Shannon Upgrade is the next significant step for the Pocket Network Protocol, aiming to debut a major shift with its implementation as a micro-rollup using Rollkit’s modular framework, integrating Celestia as the Data Availability layer.

Initiated in August 2023, Shannon (v1️) marks a strategic pivot for the development team, moving away from an overly ambitious and complex system design to a simpler, more modular approach. This pivot was inspired by the realization of the need to focus more sharply on the utility of the decentralized RPC and streamline new feature developments.

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What Chains Does POKT Support?

POKT Network supports various EVM and non-EVM blockchains, providing extensive coverage across the cryptocurrency ecosystem. This includes major EVM chains like Ethereum, Binance Smart Chain, Polygon, AVAX, Optimism, Optimism, Arbitrum, and AVAX, all known for their compatibility with the Ethereum Virtual Machine, facilitating a wide range of decentralized applications and smart contracts. 

In the realm of non-EVM chains, POKT Network extends its support to innovative networks such as Solana, Cosmos, and Polkadot, each offering unique functionalities and contributing to the richness of the blockchain landscape.

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POKT Token Staking

POKT staking is integral to the POKT Network's functioning, involving these key aspects:

• Purpose: Staking is essential for operating Service Nodes, crucial for relaying and validating transactions on the network. It is a security deposit, ensuring node operators' reliability and commitment.
• Requirements: To run a Service Node, operators must stake a minimum amount of POKT tokens, determined by network governance. This staking acts as collateral, locked for a specific duration. Currently, the minimum stake is 15,000 POKT for node runners and 75,100 POKT for validators.
• Rewards for Node Operation: Service Nodes earn rewards in POKT tokens for processing data requests, with the rewards proportionate to their contribution.
• Validator Nodes: Besides Service Nodes, Validator Nodes also stake POKT tokens for validating transactions, earning rewards for their validation efforts.
• Governance Participation: Staking also enables participation in the network’s governance, allowing stakeholders to vote on key protocol decisions.
• Unstaking Risks: Unstaking involves a waiting period and risks losing a portion of staked tokens if the node operator acts against the network's interests.

In essence, POKT token staking is a fundamental process that supports network security, incentivizes node operations, and allows for governance involvement, aligning stakeholder interests with the network’s well-being.

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POKT Tokenomics

The POKT Network's tokenomics are defined by its supply, minting rate, and distribution strategy. Initially, the network had around 650 million POKT tokens, with most now in circulation. The minting rate dynamically targets about 220,000 POKT daily, adjusting based on relay demand. For distribution, 85% of minted tokens are allocated to node runners, 5% to validators, and 10% to the DAO treasury. 

The supply dynamics are influenced by factors like node runner rewards, the number of relays, and gateway transaction fees. These elements, combined with the market price of POKT, determine the token's supply growth and circulation, ensuring the network's economic balance and sustainability.

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Bottom Line

In conclusion, POKT Network is a pioneering decentralized protocol that efficiently bridges various blockchain ecosystems, enhancing data access and transaction processes. Through its network of over 20,000 nodes and robust token mechanisms, POKT ensures high security, uptime, and decentralized access, making it a critical infrastructure for Web3 applications.

With the upcoming Shannon Upgrade, POKT is set to further simplify its architecture and enhance its utility, positioning itself as an indispensable solution in the multi-chain landscape.