Proposed Tokenomics

All numbers are for exemplary purposes only and it is all subject to the passing of a DAO proposal. We're sharing here for transparency and to facilitate discussion.

Tokenomics Vision

POKT Network is designed to create a mutually beneficial ecosystem for all actors - gateways, suppliers, and sources. Through balanced incentives, each actor can focus on generating value in their specific area, while contributing to and benefiting from the overall ecosystem. The growth of one sector inherently brings value to the others.

Shannon's proposed tokenomics are the mechanism that achieves this balance and provides incentives that make business sense. It fosters an environment that entices businesses to bring their operations to POKT Network, thereby generating revenue. It also plays a crucial role in achieving network-wide goals, such as hitting deflation as demand grows on POKT Network. In this scenario, all actors and stakeholders, including POKT token holders, stakers, and LP suppliers, benefit from the growth of POKT Network's demand side and the influx of more businesses joining the ecosystem.

Current Tokenomics

Our live protocol (Morse) uses a relatively high ratio of POKT minted per POKT burned to sustain a competitive APY for suppliers. However, high minting opens the door for “self-dealing,” which is economic gaming through permissionless gateways. This is why gateways are currently permissioned and under the control of PNF.

Relays per day: 400M	Demand Side	Supply Side
Burn / Mint	Burn 1 POKT	Mint 135 POKT
Permissionless	❌	✅
Staking APR	-	9%
Self Dealing Mitigation	PNF	PNF

Future Tokenomic Goals

POKT Network's major protocol upgrade, called Shannon, has four main goals to start to unlock POKT’s full potential:

1. Permissionless Gateways and Nodes - Allow POKT Network’s demand and supply sides to grow in a fully permissionless manner.

2. Meaningful staking APR - Incentivize stakers to ruse their POKT productively to earn from serving the network

3. Address Self Dealing - Enable both #1 and #2 without making self dealing possible

4. Introduce rewards for Sources - New source of revenue for new actors to incentivize ecosystem growth and connections.

To ensure these goals are met, we proposes to introduce Token Logic Modules into the Shannon upgrade.

Shannon Tokenomic Features

✅ Permissionless Gateways

✅ Permissionless Suppliers

✅ Add Sources rewards

✅ Set deflationary threshold

✅ Stable fees (POKT fees denominated in USD)

✅ Competitive staking APR

✅ Incentivize independent node running

✅ Reward network balance

✅ Modular tokenomics for different data types (Token Logic Modules)

✅ Self dealing and gaming protection

✅ Increase rewards with network growth (whether growth in relays or and POKT market value)