Q4 2025 marked a pivotal transition for Pocket Network as the Foundation assumed direct operational responsibility for critical infrastructure while continuing to advance protocol development. Following the successful completion of the Shannon upgrade, Grove concluded its role as the centralized service and protocol development partner, and PNF stepped into a new phase of decentralized, community-driven growth.
We’d like to extend our sincere thanks to Grove and the entire team — particularly Art Sabintsev — for their years of dedicated work bringing Shannon to life. The upgrade enabled permissionless demand, automated mint/burn tokenomics, and generalized data transport, fulfilling the original vision for Pocket Network. Grove will continue building adjacent technologies that integrate with the Pocket ecosystem, and we look forward to seeing what they create next.
Grove Transition and PNF Operations
With Grove’s core deliverables complete, PNF moved quickly to ensure continuity of service. During November, the Foundation built and deployed a new load-balancing gateway infrastructure based on the PATH SDK. On November 25th, PNF’s gateway became the sole operator of the public RPC portal at https://api.pocket.network.
The new architecture enables round-robin load balancing between PNF’s gateway and other participating gateways in the network, ensuring redundancy and setting the stage for a more decentralized gateway layer. Network access continues to be diversified by a growing group of gateway operators including DevDAO Cloud, Pokt.ai, and others. Head of Protocol Otto Vargas is now working closely with key contributors in our ecosystem to push protocol engineering forward (and huge shout out to Jorge Cuesta especially for significant contributions to PATH, PNF’s load balancer, and the relay miner).
The network currently serves 65 active data sources, with another half dozen rolling out in the coming weeks.
Foundation Partnership Program
In Q4, we announced the launch of PNF’s Foundation Partnership program, which offers chain foundations and ecosystem projects dedicated, unlimited RPC access at wholesale cost. As a non-profit, PNF provides this service at the absolute minimum operating cost — dramatically less expensive than any commercial provider.
Radix is our first confirmed Foundation Partner. Through this partnership, Radix will sponsor their public endpoint to offer truly decentralized access to their chain data, with a gateway service layer operated by Stakenodes, a trusted noderunner in the Pocket ecosystem. We have additional partnerships in the pipeline and expect to announce more in the coming weeks.
Chain foundations interested in the program can learn more at pocket.network/foundation-partnerships or reach out to directors@pokt.foundation.
Growth
As we ironed out the last of the fixes and optimizations, PNF shifted towards the next most important priority: growth.
Truth Cartel, working closely with community contributors like TimRiggins, have shifted their focus from messaging to business development. We are actively in outreach with other blockchain foundations, dapps, and DeFi platforms, along with a significant focus on what is becoming an emerging growth point for Pocket: LLM integrations.
PnyxAI is a case study of LLMs operating on Pocket Network, and two other LLM companies are currently in the pipeline for partnership deployment. Additionally, Pocket as a data source for MCPs integrated into LLMs has been proven as a use case — our own MCP implementation has demonstrated another channel for growth that is being followed up with third parties testing integrations into their own MCP stack.
Protocol Development: v1.31 Upgrade
Development work continued throughout Q4 on the next protocol upgrade, v1.31, which is now in an extended beta period on betanet. The upgrade is available for noderunners to install and test, with mainnet deployment targeted for February 10th.
The extended beta reflects the scope and significance of changes in this release. Beyond the PIP-41 deflationary mint mechanism, v1.31 includes critical fixes to historical relay mining difficulty tracking — which previously caused valid proofs to be rejected when difficulty changed between session start and proof submission — as well as fixes for session mutation issues that could corrupt historical session data when suppliers updated their stakes. Additional improvements address memory allocation issues that caused instability under load, and ensure deterministic behavior across nodes to prevent consensus divergence.
These are foundational fixes that affect claim/proof validation and network consensus. Taking additional time to thoroughly test them in a live environment before mainnet deployment is the prudent approach. The bugs present in v1.30 have caused the need to rebuild the Beta environment, and we are taking great care to avoid the same thing happening in mainnet.
The release also includes security updates with CometBFT upgraded from v0.38.17 to v0.38.19, and an admin recovery mechanism for Morse accounts that will allow PNF to assist users more efficiently.
For full details, see the poktroll repository.
PATH Overhaul
The PATH SDK received significant attention during Q4, culminating in the v1.0.14 release in January. The most substantial change was a complete overhaul of the Quality of Service (QoS) system, replacing the previous sanctions-based approach with a reputation scoring system. This new system allows for much more granular filtering of nodes participating in sessions, improving overall service quality and enabling more nuanced responses to node performance.
Additional optimizations were made throughout the codebase. See the PATH repository for commit history and release notes.
Relay Miner Improvements
The high-availability relay miner implementation saw significant improvements to memory usage and performance during Q4. These changes resolve previous performance issues that often caused lags and resource spikes during operation. The relay miner now supports multi-transport (JSON-RPC, WebSocket, gRPC, REST/SSE), horizontal scaling with Redis-backed shared state, and automatic leader election.
Development continues in the pocket-relay-miner repository.
Governance: PIP-41 and Deflationary Tokenomics
On January 3rd, 2026, the Pocket Network DAO unanimously passed PIP-41, a proposal that introduces a 97.5% mint ratio to Shannon tokenomics. The change is elegantly simple: for every 100 POKT burned by applications consuming data, only 97.5 POKT is minted back to network participants. The remaining 2.5% is never created, permanently reducing total supply with every relay served.
This makes Pocket Network the first web3 protocol to achieve programmatic deflation through core tokenomics design — not through halvings, not through treasury burns, but through the fundamental mechanics of how the protocol operates. More traffic means more deflation, and the mechanism is automatic, predictable, and scales directly with network usage.
The 97.5% ratio represents a conservative starting point, deliberately chosen to minimize impact on active network participants. Suppliers see only a 1.24% reduction in rewards, while the DAO retains full authority to adjust the mint ratio based on network health and market conditions. Future governance proposals may reduce the ratio further as the network grows.
Implementation is included in v0.1.31, scheduled for February 3rd. For more details, see the full announcement and the proposal on the Forum.
Financial Update
2025 represents a strong improvement in financial discipline, transparency and reporting practices compared to 2024. Below you can find the key highlights for 2025:
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Significant Reduction in Total Expenses: Total expenses decreased from ~$9.4m in 2024 to ~$4.7m in 2025, representing a ~50.3% reduction year over year. This is a reflection of the prioritization of cost management and efficient allocation of resources from the team.
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Full Financial Transparency Achieved: All expenses have been fully shared publicly with the community via the Shared Pro-Forma, enabling clear visibility into month to month expenses as well as having a weekly spot on the ecosystem call to address any questions or concerns about our projections.
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Consistent Quarterly P&L Reporting: Financial reports were delivered consistently on a quarterly basis throughout the year, improving accountability and ongoing financial oversight.
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Public DAO Transactions: All DAO transactions done by PNF were made public including brief descriptions strengthening transparency and allowing the community to better understand how funds are being used.
What we expect for 2026:
Building on the strong financial improvement and transparency practices established in 2025, we are very encouraged by the progress made so far. These practices have been proven valuable for both internal management and community trust, and we are committed to maintaining and further improving them throughout 2026.
Our key financial goals for 2026 include:
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Enhanced Transparency & Reporting: We will continue strengthening our transparency and reporting standards by introducing an improved Pro-forma format, including Actual vs Projected figures and variance analysis. This will provide an even clearer view of fund allocation, performance, and financial decision-making.
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Further Expense Reduction: Our objective for 2026 is to reduce overall expenses by an additional 40% (yes, 40%, crazy but we like challenges), while maintaining operational effectiveness and prioritizing high impact initiatives for development.
We believe these goals will continue to strengthen our financial accountability, and support sustainable growth for the ecosystem in the year ahead. We are happy PNF remains in strong financial condition, with sufficient runway to effectively operate through the remainder of 2026 even without additional income.
You can find our latest reports below:
PNF Financial Reporting - Q4 2025 P&L Statement
PNF Financial Reporting - 2025 P&L Statement
As always, Consu is available and happy to answer any questions about specific expenditures or line items. (TG: @Consuel0_Toro, Discord: consutoro)