The economic processes of Pocket Network V1 are going to be more complex that the current ones. The addition of new protocol actors will create new sources of minting (they will need to be paid for their work) and new sources of burning (some actors will have burning mechanisms).
Currently V1 is aiming to include 5 actors:
- Servicers : What we call today node runners, they will be paid for their work (mint) and also they will be punished for their misbehave (burn).
- Validators : In V1 the node runners and the validators are different actors. They will still do the same job but they will be independent actors.
- Applications : The application in V1 will incur into burning, this means that the GatewayFeePerRelay (GFPR) will be replaced with ApplicationBurnRate (ABR). Also applications must stake POKT according to their relay rate (a sink of POKT). We should expect this POKT sink to grow with relays, which currently does not happen.
- Gateways : Applications can delegate their stake into Gateways (actually Im not sure how this will be articulated). Gateways will be (probably) a new actor in V1 that will be a sink for POKT, as they would need to have stake.
- Fishermen/Watchers : (Name TBD) They are actors responsible for reporting QoS. They will be permissioned at the beginning of V1 but they would need to have a POKT stake (sink) and they will be paid for their work with minting (source).
The DAO itself could be seen as an additional source of POKT, as we need to create their treasury out of the total minted tokens.
Researching the mechanics among these players is important not only to the development of V1 (making sure all interaction mechanisms are available), but also to be able to modulate the token supply. As an example, in our V1 fairness thread we advocate for a change in servicers staking strategy that can lead to an increase of staked POKT (to run 15 chains in 3 regions you would need 15x3 the stake of a single servicer instead 1x). Things like this create expectancy of token scarcity which is as good as scarcity itself in some cases. The question is then, how much POKT will be required for V1 to work? Is the liquid POKT is out there enough to cover this? It would be great to shape the answers to these questions as soon as possible.
Current minting mechanisms (and even our current proposal) just look in the whole supply changes and simplify the minting as node rewards. In V1 the minting will have to pay for node runners services but also for DAO, Watchers and Validators, their cut of the total minting will need to be measured and maybe the supply reduction revisited. Who should pay for network security (Validators), the ecosystem governance (DAO) and network QoS observation (Watchers)? should it be reduced from what we expect to pay to the Servicers or will we allow an small supply growth (holders pay also through dilution) to cover these expenses (at least temporary)?
We want to kickstart this discussion, we need to know where the community stands with respect to this subjects and then we need to start building consensus on what we want V1 economic landscape to look like. Then we can start modeling, the math will probably be the easiest part…