PUP-12: Inflation Stop-Gap Proposal: Double Trouble

Yeah and it solves (or helps a lot) for the attempt to balance both long-term nodling and speculating

Makes staking POKT still super attractive,

And even if/when inflation dies back, still healthy enough speculation around the tokenized assets compensates without negatively effecting pockets fundamentals.

I don’t want to make this proposal discussion about that exclusively, but Its important for people to be aware that if that comes out soon, and we rally around it, then we can dial back inflation some/ a lot without as much of the perceived blowback (theoretically lol)


Hello all. I’d like to offer my two cents in here, for whatever that may be worth.

In my view it is absolutely perilous to consider changing the reward structure at this juncture. (If it works don’t fix it)

I do not believe that the current structure is flawed. I must say that it is the most beautifully designed system / protocol I have ever found.

I firmly believe that pocket network has the capacity to have a million nodes running along with 100,000 validators. I project the API calls created by web3 to double every 4 to 6 months from here. As long as balance is maintained between the node side and the dApp side we need to keep the pedal to the metal!

Even in a market downturn, perhaps especially now, app development will continue to double on a yearly basis for the foreseeable future. It seems to me that the current 300 million per day can very easily 10x over the next year. If scalability is not an issue we should stand pat.

As long as supply is constrained by the staking of new nodes as well as dApps being staked; the current rate of minting new tokens will at some point create a scarcity, hence making the current mechanism deflationary.

The DAO treasury has 70 million tokens locked up? Let’s get those tokens out there to developers in the form dApp staking grants on a 30 day trial basis. Once we bring them on board and show them what we have to offer they will never go back to Infura. We can easily do 1,000 grants per month right now and only use 10% of the treasury in doing so. I Believe by making this available to developers at no initial cost to them we, will grow relay numbers exponentially.

This simple practice of 1,000 rolling grants of 30 day duration, even at a 67% retention rate, should double the amount of active dApps from here in the next 90 days.

Pocket network might currently be handling one tenth of one percent of the actual traffic happening. That’s just a guess. I’m an eternal optimist when it comes to crypto in general. Web3 makes me exponentially so. With that said I not only feel that we want to continue the current rate of growth but that we need to. It’s better to have the extra ammo if we need it than to need it and not have it.

Has anyone yet proposed a system of extending grants to developers? Is the any implementation of an EVM at this point?

I’m class of 2017. My first BTC was purchased 5 years ago this month, as soon as the BTC price passed the price of gold.

I feel very strongly about this Pocket network being the absolute best protocol launch ever.

Not even the sky is the limit.

I have read literally hundreds of white papers and looked at hundreds of roadmaps. Not a single one ever came close to generating this much of a feeling of gnosis.

Gnosis that this is the one. One protocol to run them all.

I firmly believe that if we stay the course during this downturn that before 2025 $pokt will be listed #10 by market cap. Maybe higher, definitely #1 by revenue.

Sometimes it’s hard to see the forest for the trees.

For me personally, it’s as clear as day.

Cheers. And thank you. I have finally found my home in this community!


I believe the DAO should represent the contributors in their entirety, including those whose contribution and commitment is monetary. However, I understand the risk of centralization that plagues most PoS networks, so their influence should be moderated. Let’s discuss it somewhere else, yes.

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Now That’s What I Call Optimism.

I’m intrigued by the dApp Staking Grants idea. It sounds like a concrete way to leverage DAO funds into more relays.

Does anyone have details on if and how this has been done in the past with other protocols?


I could be perseuded to set up a booth here to take grant applications :grin:

The 36th annual Game Developers Conference will take place from March 21 to March 25, 2022 at the Moscone Convention Center in San Francisco, California


Thanks for all the feedback. I love a good controversial proposal. Get ready for a novel…

My opinions are my own

First things first, this proposal and my opinions are my own (just like WAGMI). I originally threw @o_rourke’s name on the proposal because I ran it by him, as I do with most things, but this is my idea. Not the core teams, not the DAOs, etc. Direct your hate my way :smiling_imp: - I’ve removed him to avoid association with the broader core team. This isn’t a core team proposal.

On Timing

There are a lot of issues to unpack. Let’s start with the big issue: timing. This proposal was timed amid a debate around POKT inflation and a broader economic (and crypto) downturn. This proposal isn’t designed to solve price woes, especially during a crypto-wide sell-off. We’re now tied to the market good or bad, I understand that. I don’t believe it’s healthy to keep this level of inflation in a good or bad market. The argument about inflation should largely be separated from day-to-day market price action. While I do agree with @lex that it’s worth seeing how things shake out, it’s not necessarily something we want to punt on for months as the market is always shaking out.

To be clear: PUP-11 or PUP-12 HAVE NOTHING TO DO WITH THE MARKET CONDITIONS. I proposed WAGMI, similar inflation results, different approaches, pre-exchange listing, and pre-price run-up. I happened to publish this proposal during a market collapse and happened to publish the other during a run up.

The last thing I want is panic selling because of a decrease in rewards during a very uncertain market, but it also doesn’t mean that we can’t debate issues like this. Maybe I give our community too much credit, but I don’t want to baby them fearing they may overreact to a debate that’s been going on for over a month at this point.

On the topic of the Pocket DAO

The notion of “if the DAO wants more, it needs to do more for us (node runners)” is unfamiliar to me. DAO voters are the DAO - not the core team. I don’t even have a vote, so you’re asking yourselves to do more work. If you don’t have a vote - go get one. Everyone on this thread is likely eligible. If you’re expecting the DAO to do your bidding without participating as a voter or a contributor to Pocket, it’s my opinion, that you’re doing it wrong. If you want to help grow the DAO, talk to @JackALaing. If you’re concerned about my proposals, the most effective thing you can do is vote against them if you don’t like them.

In times like this, we should be rallying to the DAO asking how we can help. We should support it rather than ask what it can do for me. This is a community effort and it’s going to move a lot faster if more people contribute.

If the DAO numbers are the concern, we can calculate an acceptable return level that includes an increased DAO allocation. These are not mutually exclusive in my calculator. We can also strike the DAOllocation from the proposal altogether. It wasn’t part of my first draft, but I did some math and the DAO is getting crushed by dilution, so I figured it was best to include the issue in here. In hindsight, probably conflating too many issues.

On Parameter Specifics

The adjustment in the parameter still provides a very healthy return. 80% ROI annually is very strong in comparison to other crypto returns with similar risks. Why inject additional inflation into circulation if we don’t have to?

To run some numbers out: Let’s pretend the crypto sell-off continues and there’s an 80% drop from ATH of $3.20 (ish), that’s $.64 POKT. Multiplied by 32.877 that equals ~$21/day or $635/month. Plus, as I pointed out previously, this return is likely to grow as the network grows.

I’m open to @lex’s proposal to edit the proposal to give people time to digest it. We can also step down over time, which I think is reasonable. If I proposed something where we stepped down to this level over the course of 4 months, beginning with the first reduction in 30 days would that quell some of the concerns?

App Subsidization / App Grants

Pocket Foundation already does this through the portal. While we don’t give out tokens, they found it more effective to stake on their behalf. See PUP-9: Gigachad Pocket Portal Free Tier


Hey guys

I am a new investor, the price has dropped since I invested and I am looking to DCA some more. I am currently running fractional nodes via the POKT pool and am not bothered about short term price movements as I know the high APY and strength of POKT usecase will always shine through long term.

It actually sounds ridiculous proposing such a huge change so quickly, of course the apy should drop gradually to incentivise new buyers and node runners.

The market has taken a huge down trend. you cannot blame tokenomics that have seemed to work until BTC takes a nose dive.

When you factor in bullish announcements, massive uptrend, VC backing and early investors OF COURSE you will get a sell off with a major CEX listing like huobi as it give long term investors an easy place to take profits.

With the high APY (and some more marketing), CEX listing , VC backing and constant adoption onto different blockchains you will continue to attract new investors running nodes and holding POKT.

But please do know the high APY attracts investors in these market conditions too as everyone will be looking for a stable passive income in an amazing Web3 protocol that is not a ponzi.

As a new investor I fully agree to lower the APY…but please do it gradually otherwise it really looks like you are using bullish announcements and CEX listing to use new investors as exit liquidity rather than added long term investors to continue to help build POKT.

Myself and several others have only heard about POKT and invested and will continue to invest. Bitcoin halvening works but certainly not Tenthening.

If the tokenomics and adoption have been well thought out there will be no need to have such a harsh change to rewards so suddenly.

A gradual deflationary mechanism should be added and I would love to see some long term holders share their ideas on this.

I ran fractional nodes the day I bought, I am sure that shows I am here for the long term.

Looking forward to growing with everyone at POKT. :slight_smile:


Right on. I’m going to become a Shepard and full time abilities will begin to show. I will volunteer to do conventions and trade shows. I’m free for the next 2 months. Seriously, anything I can do to help, please call on me. I’ve been a web entrepreneur since 1999. Glad to do anything that keeps pocket growing fast and balances things out. I love to travel. Let’s talk about it.

I’m sure I can build the dApp side at DevCons as well as build the brand simultaneously! This is so exciting!
Where do we begin? @JackALaing


Every time I have some concerns, Adam, you’re quick to dispel them with solid answers. I appreciate your well reasoned approach.

This was fundamentally the major concern I had, as noted in my previous responses.

I support the inclusion of an increased DAO allocation as part of this proposal.

I very much support a staged approach to this, especially since as one of the partners in a fractional staking pool, services such as ours are likely to be heavily impacted by this proposal given the fickle nature of retail.

Additionally, derivatives such as collateralized staking have already sprung up, and an immediate implementation of a reduction of this size will fundamentally alter terms schedules that are live today. In short, I don’t think this proposal has a complete view of the impact it will have in the marketplace, and the immediate impact it will have on a number of large noderunners.

Given those considerations, I would be inclined to vote in support of this proposal.


This dramatic change in rewards would stomp out independent node runners IMO. Chain nodes are becoming increasingly more expensive to run (Harmony has doubled in storage size in a matter of months) and from my napkin math, 80% barely covers the growing expenses of node running over the course of a year with the cloud… unless you have a lot of POKT nodes.

Ultimately, the cost of trying to run your own nodes will not be worth the time and resources, sending even more folks to the huge node providers. Not to mention the rug pull effect it would have on node runners that are just gotten started in the last few month. I think that kind of dramatic changes would be a stain on our project. In all of POKT’s economic models there were curves… I’ve never considered an economic model with immediate drops of 70%.

We’ve marketed this phase as our “Growth phase”, so I suggest we have a model that can begin to tapper the growth phase, not cancel it over-night. This could be a great marketing event as well, encouraging folks to jump in with node running while this growth lasts for the next 10 months, or something of that nature.

One real fact is that right now we don’t have ways for apps to practically stake POKT for relays, so there’s no reason for apps to purchase POKT right now. Node running is the only economic incentive to buy POKT. Cutting the rewards to where your essentially forced to use a large node provider, or be an independent whale, will take away some of the natural fire that is in our community IMO.

TLDR: The huge node services can easily absorb this dramatic of a reward change as their margins are astronomical, while this could essentially illuminate the small (but growing) community of independent node runners if enacted with this kind of drop-off.



The entire calculation is based on the current state of the POKT network.
Are you not thinking of further expansion? The network grew at a fast rate in the recent months.
Do you have projections for the amount of dApps that are going to be joining POKT (increasing the daily relay count) in 2022 and following years?

Other than Harmony, the number relays coming from other chains towards POKT is insignificant.

The upcoming wPOKT is meant to help POKT tap into the ether blockchain.
Lets assume POKT is servicing ~250Mil relays a day. It seems that POKT is getting just the tip of the amount of daily relays passing on ether (Infura is said to handle billions of txns on ether per day).
Aren’t you expecting a significant increase in this number with the rise in usage of ether based dApps (and possibly/hopefully other chains)?

It seems like a drastic move (regardless the timeframe) to be doing a 70% decrease in node rewards.
Why not aim to a smaller target that will match the potential increase in daily relays (which seems like a big unknown right now).

The current RelaysToTokensMultiplier is attracting stakers who are node runners, who are taking a higher risk. Without an increase in the daily relays the current situation will lead to a decrease in POKT rewards and may create a negative effect on the entire project.

Stating PUP-11/12 have nothing to do with market conditions is fine - but the numbers suggested in the PUP itself do have a strong correlation to the market conditions. Reducing to 80% ROI in POKT greatly differs if POKT price is 1$ or 4$ - and as was mentioned earlier, price movements can be unpredictable and uncorrelated to the inflation so how can you set the reduction while the price is as volatile as it is now? I would expect this volatility to decrease when POKT gets near a stable state (which adds another big unknown into the equation - when?)

I fully agree with the (urgent) need to address inflation - but I also think that at the current state of this project, the community needs to be investing its time in increasing the demand and usage by dApps from different networks as it seems the market share of POKT vs. its competition is very small.


Well, I’m pretty sure that a sudden slashing of rewards would pretty much kill node runner and staker enthusiasm, precipitate a massive exodus from the community, and welcome a downward death spiral in token price benefiting absolutely no one. Furthermore, a sudden increase in DAO appropriations in the wake of this would be viewed with a jaundiced eye by the recently disenfranchised node runners. This project was really looking great and WAGMI sounded like such a well measured and responsible path to fiscal responsibility. Why oh why the sudden turn in strategy and new trajectory headed for a cliff in the popular opinion of your community members? Markets do not like sudden and irrevocable change and they react dramatically and frequently irreparably.


Sushi USDC/WETH pool has ~55% APR at the moment. No 21 day lock-up, no node hassle, ultra-liquid easy to sell token, deep pool, benchmark pool collateral, already integrated into the DeFi ecosystem. On the other hand, some degree of IL.

So, I would target something like 100-120% APR as the final point of our bonding curve.

Other chains can adopt us as their default RPC and that will give a boost to the APR but the community doesn’t have this kind of information, therefore it is another risk to assume.

Yes, I would definitely support something like “4 month long reduction of RelaysToTokensMultiplier starting March, 1, adjusted every month, and targeting 100% APR.”

That would also give the BD team time to on-board more relays from chains and some extra fuel for the marketing team.

UPD: probably, it would be even better if the reduction isn’t linear and becomes steeper to the end. This way we can market it as something like “look, if you stake today you will have 2-3 months of almost stable huge APR but after that we will predictably and fairly rug it to still higher than average value so your tokens become more valuable.” This will allow us to get maximum attention on the span of the next 2-3 months, during the LBP and the liquidity bootstrapping phase. Also, it will quell some immediate concerns about inflation.


There would be an intense emotional backlash amongst the general retail investor community which would come from implementing PUP12.

WAGMI has been vetted and generally well received by the reasonable masses… as shown above by he staking trends, there has been huge enthusiasm by small investors to scoop up what the whales have dumped on us; however… (be it real or imagined) an aggressive move like PUP12 will be seen as a power and money grab by the masses of retail investors who judge and vote in black and white.

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in general the idea of lowering inflation is a given one, with that a gradual change is a must in order not to break the "“machine”, furthermore there are several aspect connected to it that must be taken under consideration:

  1. if the increase in node count is on the rise and liquid pokt is not rising dramatically this means growth of the network is healthy and thanks to that inflation, this gives us the ability to supply any demand of relays and dapps.

  2. by doing such a drastic change we will be hurting 15-20% of our node operator who entered when pocket was between 1.8-3$.

  3. if we wish to stop or slow down the growth of the network ( node count) this is the way to go :slight_smile: .

  4. how many nodes do we aim to achieve within 6 months, how many in 12 months? assuming the requirement is the same of locked pokt ? do we aim to have 100k nodes within a year? if so the math of 15,350 x 100,000= 1,535,000000 pokt, that is assuming we leave the number of pockt per node at 15,350k ±, add to this a certain amount of pokt in the liquid market like the same ratio today or any other ratio we aim to achieve, but if 40% is liquid and 60% staked ths mean another 1 bil ± should be in circulating, + daps, hence the need for inflation at this point.

  5. what is the capacity the network is working now? how many more relays can the network provide before it can not because of slowed growth? this growth in relays should be combined with the growth of nodes to balance between the two is important.

  6. for investor and hodlers we have staking via poktpool, i believe that investors and hodlers will love this compounding feature and will give answer to this sector of the market that we just entered to.

  7. if w wish to reduce inflation we can do it gradually on a monthly basis, i do not have the number because i need more data as mentioned above.

  8. we can start charging and burning that revenue from dapps yet we must stay competitive in this stage to capture more of the market share.

  9. in your proposal you wrote 100% for 15 months? or 100% APY? it is unclear so let’s stick with APR as this is the standard of conversation :slight_smile: clarity .

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This proposal deterred me from buying the dip yesterday. Also bothers me how you talk about the current ATH when POKT literally just went parabolic on listing and funding with amazing rewards…now as soon as more retail wants to get involved you propose slashing rewards by over 70%? Insanity, so much room to grow and build…before a GRADUAL deflationary approach. More nodes the better.



I’m a current fractional staker of POKT on Poktpool, so I’m representative of the retail investor. What initially brought my attention to the Pocket Network were the promises of high APR of staking rewards, and what really convinced me to invest was the high IQ and levelheadedness of the community after researching more into it.

Yes, we must eventually control inflation but - as others have commented before me - if we do this in an abrupt fashion, it will turn off the most recent investors and node operators as well as future ones, which may compromise the network as a whole.

What I suggest is maybe a combination of the WAGMI proposal and this one, where the 0.01 value of the mint rate curve starts at about where we currently are in relays per day (~ 250 mil) coupled with a lower end cutoff at the proposed value of 0.003162.

So as the relays per day increase, the RelaysToTokensMultiplier approaches the value of 0.003162 and never goes below it. From then on, we can see how the market behaves to this and ajdust accordingly.

This way, we insure a gradual and healthy amount of inflation control without scaring off new backers of the project.

EDIT: Just realized that the 0.003162 parameter is based on 300 mil relays per day so we can’t use that as a fixed number. The solution would be to then adjust the lower end of the curve so that the minimum APY is roughly what equates to 100%.


To follow up on this, looking at it from a retail investor’s perspective, if POKT manages to establish itself as THE passive income crypto with a good APY over other projects, sound sustainability and inflation control and continued network growth, we’ll have very solid buying pressure, as there’ll a percentage allocated to POKT on nearly every crypto investor’s portfolio.


We really need to work on your timing Adam on when you submit these types of proposals. :joy: While I agreed this shouldn’t be tied to current market conditions, but it’ll still drive the wrong initial idea of why it was submitted.


I also do think some form of inflation control has to be done but not this way.
Team can always control amount of inflation using ‘Relays’ meaning team can delay adding new chains to control inflation. Let’s say we get double or triple number of node runners right at this moment. That naturally makes average reward by 1/3. DAO still gets 10%. More marketing and making awareness in crypto world is key solution not manipulation on economy in this magnitude. Let market chose it’s own destiny.