V1 Economics and Governance R&D Keystone

As set out in the V1 Economics and Governance R&D page in the POKT DAO ERA hub, the purpose of this keystone is to:

define a minimum viable set of parameters against the V1 utility spec that ensure the Pocket economy’s adaptability, dynamism and sustainability.

So, what have we done so far?

Overview of mechanisms

While this took longer than we would have liked, we have worked with the protocol team to produce this spreadsheet that details the relevant mechanisms that each of the protocol team, PNF, BlockScience, and/or the community are to work on.

As you will see, certain mechanisms are defined already, meaning that we need to focus on researching the optimal parameter ranges for such mechanisms, as well as how we could refine such mechanisms to make them more efficient and easier to administer (ie to avoid PNF having to manually update it each week). And others are still to be defined, meaning that we need to fully specify a new mechanism and ensure that it aligns with our goals for v1.


We have onboarded with BlockScience to design an open source model of Pocket’s economic system. This model will be used for simulating the outputs of scenarios across different parameter ranges to better understand the trade-offs between different parameter ranges and the risks to be wary of. In short, this work will help us have more confidence in the starting parameters we choose for v1 and allow us to use this model to tweak these parameters in the future, too.

BlockScience has only been allocated mechanisms that are already defined. This will make the most of their expertise in modelling and simulating. The research into any new mechanisms will be led by the protocol team, PNF and/or the community.

See here for a blog post about the research method that underpins how the Block Science team works, and below for an overview of the timeline for BlockScience’s work:

Research led by the community, protocol team and/or PNF

As you will see from the spreadsheet, certain of the mechanisms have initially been allocated to the protocol team and PNF as well as @RawthiL @bulutcambazi (C0d3r) @shane and @poktblade as they have already expressed interest in such areas and have demonstrated to the community their capabilities and knowledge. We are still working with all of these contributors to finalise their approach and agree on timelines and how they plan to bring their work into the public.

What’s coming up next

We still need the community to take the lead in other areas, as set out in the status column in the spreadsheet, so please reach out if you would like to get involved!

In any case, no matter which contributor or group is the driver for the R&D regarding a particular mechanism or parameter, cross-community collaboration and participation are paramount, and the recommendations of any one contributor will never be final. The DAO will eventually discuss, debate and vote on all recommendations. In the meantime, members from different research subgroups are expected to exchange ideas, discuss challenges, and explore potential solutions with the broader Pocket community.

Please stay tuned for more updates as these research workstreams progress.


Update on 1 October


Using the methodology outlined in this article, Blockscience has aligned with us on the following system goals for their review:

  1. Economic viability - make sure that all involved participants that are honest have their costs and risks covered while delivering an acceptable service on the protocol. Participating in any role should be economically rational.
  2. System reliability - make sure that the network has a consistent Quality of Service, and that deviations from it are accounted for through effective incentives and penalties.
  3. Long-term value generation - make sure that participants have access to persistent value that was generated as a result of the protocol’s success.
  4. Accessibility - make sure that onboarding to / consuming from the network is comparatively advantageous to other solutions, both decentralized and centralized.

We are in the process of finalising the KPIs that arise from these goals, and hope to share these in the next week or two.

In the meantime, the Blockscience team are developing a mathematical specification of POKT’s economic system that will be opened up for public review in the coming week or two as well. This spec will be used as the foundation for the simulation and parameter selection in subsequent phases.

Specific scenarios will start to be simulated from mid to late October onwards. Consequently, the public comms in relation to Blockscience’s work will ramp up around this time too.

Community ownership of Shannon economic mechanisms

We are still looking for community members to take ownership and start working on many of the mechanisms listed in the “Protocol, PNF, Community to review” tab in this spreadsheet

If the chance to research, design and test any of the Shannon economic mechanisms included in the spreadsheet interests you - from pricing based on computational units, to the QoS (Watcher sampling) protocol to determining the conditions for implementing a servicer stake burn or jailing, and everything in between -please reach out!

Lastly, to be very clear, everyone working in public towards defining any of the economic mechanisms for the Shannon upgrade should be paid for their work and should open up a Socket to do so. Please do reach out in advance, however, as it is important to align on what you want to work on and how you want to do it, so that you have the full context of Blockscience and/or any other major contributor.


Everyone can follow the development of Blockscience’s mathematical specification here

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Please see here for the simulation model.

Modelling and simulation has started and we expect to receive first results from early February.

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Hi everyone,

By way of update, Blockscience has finished their initial modelling and simulation work.

We now have a lot more data to guide us as we consider the future of POKT’s economics. The protocol team is reviewing how this analysis can help them recommend initial parameters for Shannon. We are also considering where we need more data/modelling to gain more confidence in the recommendations.


You can see all of the reports produced by Blockscience here covering Gateway viability, Servicer viability, Network Viability and Network Failures - Servicer scenario groups and Network Viability and Network Failures - Oracles

See here for an overview of the initial recommendations.

As well as here for the system goals and KPIs, and here for the threshold values that together formed the basis of the simulation exercises.

Next steps

The Shannon spec has changed massively (for the better!) since the start of the work with Blockscience, and so has the market along with (I’m sure!) everyone in the community’s perspective of needs and wants for POKT. So before we run ahead and go down the rabbit hole of carrying out any more modelling and simulation work or proposing any major changes, we believe it makes sense for everyone to take stock of where POKT is at and what it needs most first.

We need to be mindful of what makes sense to focus on now - in the immediate run-up to launching Shannon - as opposed to from the launch of Shannon onwards.

With all of this in mind, the protocol team is carrying out their own review based on their understanding of exactly what is needed for the initial Shannon launch. They will share their perspective very soon (shout out to @shane who has been leading all of this!)

In the meantime, we would love members of the community (particularly those who are more technical) to review this data and start to lead conversations around areas that need more research or simply those that should change so we can move forward in parallel to the protocol team and think further out than just what is needed to launch Shannon this summer.

Feel free to post here or DM me with any questions on discord/telegram.


Under "The Economics," the POKT DOCS say : “Node runners currently need to stake at least 15,000 POKT to operate a POKT node. We expect this requirement to increase following the updates to the economics based on the Economics R&D work with BlockScience.”

Any update/details on whether this requirement will increase or whether we’re still expecting it to do so?