PEP-3: API3 Token Swap


  • Author(s): Adam Liposky, Michael O’Rourke
  • Recipient(s): API3, we would receive the equivalent amount of API3’s token
  • Category: Agreements
  • Asking Amount: 250,000 POKT


We propose to do a token swap with API3 that will result in relays being driven to the network. The API3 token would be owned by the Pocket DAO and held/managed by the Pocket Foundation. The Pocket Foundation Directors will vote on behalf of the Pocket DAO on all API3 DAO matters. We propose that all API3 governance matters be debated on the forum and sent to a Pocket DAO vote; the Foundation directors will be compelled to vote according to the will of the DAO.


API3 creates networks of first-party, API provider-operated oracles with decentralized governance. They would like to partner with Pocket Network and the Pocket Network DAO by acquiring POKT for throughput which will be staked as an application. The proposed plan would be to swap enough POKT for API3 to up to 10M relays per day through Pocket Network.


The relationship with API3 is an excellent way to drive relays to Pocket Network, fitting within our integration growth strategy. Staking API3’s token grants us rights to the governance of API3.


A one time transfer of 250,000 POKT of DAO treasury tokens will be made to API3. In exchange, Pocket DAO will receive the equivalent amount of API3’s token to be calculated at the time of transfer.


This relationship feeds two birds with one scone. It will serve as the DAO’s first inter-DAO strategic partnership and will drive up to 10M relays/day to the network.

There is also an opportunity to more deeply integrate with API3 for price feeds when the stability adjustment is activated with Pocket Network’s monetary policy. Currently, the Pocket Foundation is tasked with adjusting developer pricing in accordance with the DAO’s decisions. When Pocket Network’s public markets have matured, using an oracle like API3 would remove this burden from the Pocket Foundation.

Dissenting Opinions

  1. Too much POKT for a single partnership.
  2. API3 won’t drive the relays we believe they can.
  3. A swap with such an early stage token is very high risk.
  4. There are better ways to use the POKT we have in the treasury.


  1. Token Swap
  2. Onboarding and usage of Pocket Network by API3


Foundation Directors


Copyright and related rights waived via CC0.


Hi, I just wanted to drop by and talk about how API3 and Pocket Network complement each other.

As mentioned above, API3 is about API provider-operated oracles. These weren’t a thing before simply because an API provider operating an oracle node is generally not feasible. We came up with Airnode, an oracle node that is designed to be set-and-forget, which still needs access to the smart contract platform it serves.

Availability is pretty important for an oracle node, which is why Airnode is designed to use multiple blockchain providers simultaneously. For example, an Airnode can use both Infura and Alchemy, and will only become unavailable when both go down. However, we believe that this setup has a lot of room for improvement. The main issues we see with these service providers are that (1) they are not that many, (2) they are individually centralized, (3) they only plan to serve on Ethereum. Pocket Network helps with all of these, which is why we like it at API3 quite a lot.

What API3 can provide to Pocket Network is a very healthy kind of demand. Each Airnode periodically polls the chain for oracle requests and then makes further calls if there are requests to be fulfilled. This creates a steady demand distributed over time, which is ideal. As more API providers spin up Airnodes, this will create a linear increase in demand, again, distributed regularly over time. Furthermore, API3 will require the same service on all the chains it will operate on. This will allow Pocket Network to expand to new chains with the guarantee that there will be existing steady demand. Finally, API3 can provide Pocket Network with the tailored price data it will need to automatically regulate its incentivization functionality.

At a high level, we consider ourselves to be building actually decentralized infrastructure, both in architecture and governance, and see that Pocket Network is doing the same. The similarity in their ethos and the correspondence in supply-demand between the two projects pose a significant opportunity for a strategic partnership, which we believe would be bootstrapped through this proposal.


Thanks for dropping by and adding your thoughts @burak. I’m in agreement with all the points you mentioned. I believe this to be a valuable proposal worthy of approval by the DAO. I see a strong strategic partnership between Pocket and API3 for years to come.

1 Like

I think there are many good reasons to proceed with this partnership.

Firstly, 250,000 POKT (c.$25k) doesn’t seem to be too excessive for the first kind of partnership like this.

API3 also seems to very aligned with Pocket philosophically, and there seem to be lots of potential growth synergies between the respective protocols.

I have a few questions, however:

  1. Can someone confirm what percentage of the DAO’s treasury tokens this amounts to?
  2. What blockchains are envisaged as part of this support package?
  3. Can Pocket do something with the API3 tokens other than HODL them?
  4. In terms of OpSec, does the DAO need to open an Ethereum-based multisig wallet to hold API3 tokens?

I can reply to some of those from our side

  1. We’re mostly focused on Ethereum-like chains at the moment, xDai, Matic, Fantom are some of the integrations that are already announced. We’re also planning to integrate to more exotic chains, but that’s a more mid/long-term thing.
    We’ll mostly be driven by demand while deciding on which chains we’ll be actively operating on, i.e., there needs to be a project that will be using our services on the chain.
  2. The tokens can be staked at our DAO pool (that will be launched in a few months) to receive inflationary staking rewards and voting power. When our decentralized API insurance service kicks in (some more months later), the funds in the pool will be used as collateral, but this can be expected to increase the staking rewards accordingly, you can refer to this post for more details.

This slightly less than .5% of the treasury of the DAO (not counting Foundation treasury).

I’ll defer to @o_rourke on the last question.

1 Like

Thanks for the feedback everyone. I am particularly excited about the possibilities of using the API3 service to assist in any future price solutions needed for the Pocket protocol.

To answer @Dermot’s question, I think a multisig is very sensible for holding any API3 tokens.

Are we able to stake and participate in the API3 DAO through a multisig though? Or will this need to be done through a regular Ethereum account @burak?


A very user friendly way of doing this would be for our DAO dashboard to have a WalletConnect integration and you to use a Gnosis Safe to interact with the dashboard through that (see link). I conveyed to the team that is developing the DAO that a WalletConnect integration would be nice to have, and apparently there isn’t an obstacle in the way of having that.


This proposal passed with 6 Approvals and 0 Rejections, so I’ll now close the topic.