Attending were Chris ‘Jinx’ Jenkins, Director of PNF, and Cryptocorn, Board Observer.
TLDR:
The v1.31 update of Pocket was implemented without issue. This brought better accounting of rewards for Compute Units served and deflationary tokenomics. The focus for the next few months will be on sales, particularly Foundation Partnerships, and v1.32 which will better control for over-servicing and session mutation.
v1.31/2:
What started as a minor maintenance issue grew to a major upgrade as problems were found in v1.30 of Pocket, specifically session mutation, where nodes were not being correctly rewarded for processing compute units.
The growth of the complexity of Pocket v1.31 led to delays in the update roll out, however the Foundation was pleased with the final results of the update; new blocks started to be produced with the v1.31 implementation and no issues were detected. Part of the success of the update was due to the prolonged period that it was kept in Beta. 3 additional bugs were found during this time that were corrected, showing the importance of rigorous testing before final release. This was the first community-engineering led project for PNF post Grove and was deemed successful.
While v1.31 went a long way to correctly rewarding nodes for servicing requests, the session mutation issue was largely but not fully resolved and still needs further attention. In addition, there is an over-servicing issue, where the protocol has a safety mechanism built in to avoid exhausting appstakes during a session, throttling rewards but not requests after a predetermined limit. Requests above the threshold are still processed by the node, but nodes are not adequately compensated for these additional requests.
The combination of the remaining session relay mutation and over-servicing issues are causing the network to in-effect process some requests for free, without the user being charged or node rewarded. While significantly less of an issue than the under-counting in v.1.30, this issue may still under-count low double-digits percentage of network traffic.
Pocket Testing:
Positively, the network was stress tested by potential partners over the last few months, with one partner supplying 5k relays/second, and another bursts of 10k relays/second. If all processed and paid for, this would account for ~1trn and ~2trn CUs daily if sustained.
Currently Pocket rate limits our service either per IP, per minute or per day for each data source. The default limit for PNF provided services is 2k relays/second. PNF is in talks with partner foundations to set up their own end-points and appstake sufficient POKT to allow for 10k+ relays/second for their communities.
Korea:
There is continued focus and monitoring of the Korean market for Pocket, especially given the volumes of POKT traded on Korean exchanges. There are Korean Pocket channels and material is translated into Korean to expand the knowledge base of Korean holders.
Pocket completed a compliance audit with the Upbit exchange in December, as part of the wider Korean government’s digital assets upheaval, bringing increased regulations and scrutiny of Crypto.
Aerodrome:
PNF have quite significant positions along the wETH/POKT liquidity spectrum, and will not be investing more liquidity in the near future to support wider ranges of wETH/POKT.
Finances and Runway:
PNF has about 1 year of runway left with its finances. PNF has a roadmap to long term sustainability with hopes that this is achieved by Q3. Consu is always available to go over PNF finances in greater detail if community members are interested in learning more.
Sales:
The Truth Cartel team have moved from primarily focusing on Marketing to Sales for Pocket. The two members have already shown success in bringing on Anchain.ai as a partner, and are heavily focused on building new Foundation Partnerships in particular. There are 3 ‘high likelihood’ partnerships in the pipeline and the Sales team have a target of bringing 3x qualified meetings per month.
Marketing:
Pocket has switched its marketing strategy away from traditional marketing, which was proving ineffective at producing needed results, and towards a strategy focusing on community curation and social media.
Wen 5trn CUs?
Given the volume of requests a single partnership can bring (1 - 2 trn+ CUs/day), there is optimism that 5trn CUs is an achievable target. A positive but attainable scenario would bring 5trn CUs/day as early as ~6weeks from now, although the goal is still to achieve this consistently by end of Q2.
QoS:
Currently there is quite a wide variety of node quality on the network. PNF is working on upgrading Path to offer pro-active health checks and to start to restrict poor providers. PNF is reaching out to these poor providers in an effort to help them improve their service. Additionally, as part of the F-chains program, PNF is reallocating POKT and unstaking nodes from low performing providers.
Validators:
Validators are running and providing rewards for staking. Unfortunately, the Keplr wallet shows that the current rewards are ‘0%’, although this is an error. If one stakes with a Validator via Keplr, they will receive some rewards as part of the active claiming process, but the majority of rewards will go into the user’s wallet directly.
Rewards:
Pocket is now a fully self-sustaining network. There is no inflation, no ‘magic internet money’ being created to entice speculators. As such, real rewards are provided by real revenue. This gives current rewards for staking at ~1% APY. However, with the expected sales increase to 5trn CUs/day, APY would go up proportionally, to 5-6% APY, or double/triple Ethereum rewards yield.
There will however be a burst of rewards in the near term as suppliers are compensated for the under-rewarding of POKT during the v1.3 session mutation bug.
Longer Term Roadmap and Investment:
“Pocket is fundamentally a brick and mortar business online, not magic internet money” -Jinx
Pocket has been approached by several capital groups who are aligned with Pocket’s vision and are interested in investing in long term, sustainable infrastructure businesses like Pocket. No details to be shared at present, but as the wider crypto market shakes out projects built purely on speculation and hype, Pocket is well positioned to thrive as focus directs towards long term sustainable protocols with consistent revenue.