Current Value: 5.2631579
New Value: 41,666.6667 (temporarily)
The free tier provided to application developers through the Portal is powered by the Pocket Network Foundation staking its own POKT on behalf of apps. But the Foundation is running out of POKT to stake at the current pace. We can future proof the free tier and free up the Foundation’s POKT for other uses by changing the BaseRelaysPerPOKT temporarily, enabling the Foundation to stake under the new BaseRelaysPerPOKT value and lock in a unique favorable rate that will support a large number of “free tier” offers to applications. In addition to this, the Foundation will be changing the way they manage these free tier stakes, enabling us to support a larger number of free tier applications with more dynamic volume adjustments while minimizing chain bloat, as part of a strategy to more aggressively onboard new applications.
On a daily basis, a multitude of application stakes are being created for the Portal’s free tier. As the Foundation stakes for the free tier of Pocket Portal users to bootstrap the network, the Foundation’s funds are increasingly tied up in application stakes. To give readers a sense, the Foundation is staking roughly 1M POKT a week at the current rate. While this is a good problem to have, it’s going to quickly limit the ability of the Foundation to deploy POKT elsewhere. A temporary change to the BaseRelaysPerPOKT would allow the Foundation to recover POKT to use for other purposes and pre-stake for many thousands of future applications. After the Foundation is able to pre-stake for its desired number of free tier users, the economics would resume normal operations per PUP-7: Whole Lotta Requests.
To make matters more challenging, each application is currently staked individually, leading to a growing number of app stakes on the network. While at first glance this is not a bad thing, we’re attempting to limit chain bloat (unnecessary chain size growth) caused directly by the free tier. By concentrating application on a single or a few stakes per chain we vastly decrease the number of stakes required to run the free tier program, conceivably taking the number of application stakes down from a few thousand to dozens, reducing the majority of chain bloat.
Prior to PIP-6.2, Pocket Foundation anticipated a single-digit amount of new chains being available to users per year. Now that PIP-6.2 changes this, we are seeing an explosion of new RelayChainIDs to the tune of 1 major new ecosystem per month often accompanied by Archival nodes and testnets. At the start of the Portal’s launch, we had budgeted for users to access between 1-2 dozen RelayChainIDs. At present, we have >40 RelayChainIDs and that number is subject to grow significantly in Q4 2021 and beyond. This is an opportune time to adjust the necessary POKT stakes accordingly.
New features, soon to be released on the Portal, will open up simple application staking. At that point, we’ll need application pricing that makes sense for the broader market. In the interim, because PIP-6.2 has closed off permissionless application staking, it makes sense to free up as much Foundation treasury POKT as possible for other purposes or future application staking. Further,the developers and managers of the Pocket Portal will be able to free up prior created stakes (without interruption to users), freeing up any POKT that was previously staked for subsidized applications.
Once the application staking feature is in production, it becomes incumbent on POKT Foundation to return to previous POKT BaseRelaysPerPOKT rates.
Provide detailed justification behind why the specific value was selected.
At the present, we’ve targeted a 10 month payback period from the proposal, PUP-7: Whole Lotta Requests. While this makes sense in the future when applications are purchasing and staking themselves, it only serves at the present to limit our ability to deploy our POKT elsewhere, and limits the possibilities for the Foundation to leverage free tiers as a growth acceleration mechanism. Therefore, I propose reducing the BaseRelaysPerPOKT as much as reasonably possible for this limited time to 41,666.6667. As calculated here, a BaseRelaysPerPOKT value of 41,666.6667 would make free tier application stakes cost 1 POKT. The Pocket Foundation would combine many current free tier stakes into one or several “gigachad” stakes from which the Pocket Foundation could create thousands of endpoints. This method solves for both the POKT stake and chain bloat raised above.
Acknowledge all opinions which disagree with the rationale of this proposal.
Current POKT holders could create app stakes. Counter: Not possible thanks to PIP-6.2: Settlers of New Chains
Free tiers eliminate buy pressure in secondary markets. Counter: reducing the volume of app buys in the short-term is outweighed by the potential to attract many more larger apps in the future with attractive free tier offers.
Credible neutrality is lost as other applications aren’t able to take advantage of the favorable pricing. Counter: this kind of activity (offering a free tier to onboard new applications) is exactly the kind of thing that Foundations are useful for.
This sets a precedent that the majority vote of the DAO can change the parameters in a way that grants them a huge advantage.
Where relevant, provide details of the analyst(s) whose work leads to the recommended value. How are they qualified?
Adam Liposky, Ecosystem Operations Lead
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