Pricing Throughput for Applications

Jeremy Beal
Jan 23 · 3 min read

Applications take a gamble relying on single-service providers. A black swan event could take down a decent chunk of websites and applications, for a couple of minutes to a handful of hours.

And this is what exactly happened, not once, but several times during the 502 Bad Gateway Summer of 2019 . These single points of failure ranged from bad software deployments to network route leaks to faulty configuration changes, revealing holes in the cloud computing’s atmosphere. Even though legacy-cloud architectures have reduced the cost of creating new software startups, it forces organizations to be dependent on a single-service in order to operate.

A risk that can result in a loss of profits and an increase in coordination costs.

Pocket Network’s decentralized, redundant architecture design significantly reduces centralization risk and application development costs. If a node were to go down, an application would be automatically and randomly assigned a new Service Node within the protocol. This guarantees near-constant uptime.

By leveraging the Pocket Network, application developers will find it is less time-consuming and more cost-effective than centralized counterparts. They’ll be able to use one interface to access any blockchain protocol, or many, especially if they’re developing a multi-chain application. Without worrying about having to set up their own infrastructure, developers will realize they can save even more time and redirect it to focus on building or designing their applications.

To access the Pocket Network during testnet and mainnet, applications will have to stake POKT tokens for a specific amount of relay throughput. Applications need to stake only once, incurring additional fees at the point when they choose to either reduce or add to their existing throughput capacity. Thereby, offering decentralized API services at a much more affordable rate.

Imagine only having to pay $25 once, instead of $25 every month!

What is the minimum I can Stake?

As a developer, the minimum amount you can stake is 1 POKT token. Once you stake, it will undergo a minimum unbonding period for 21 days. This means you can’t unstake your POKT tokens from the network during that time period.

How will my max relays be calculated?

The formula for calculating the max amount of relay your application can send is as follows:

MaxRelays = StabilityAdjustment + ParticipationRate * BaseThroughput

The Max amount of relays is calculated by three factors:

in the short-term to correct deviations from the Local Peg that are most likely attributed to short-term changes. If the StabilityAdjustment persists above/below zero without resetting, the StabilityAdjustmentPocket DAO can attribute the deviation from the Local Peg to a more permanent change that occurs in the Pocket Ecosystem, at which point, the DAO will update it.

BaseRelaysPerPOKT and reset StabilityAdjustment to zero.

For the BaseThroughput, it is the number of Relays an Application is getting per POKT staked. This is calculated by the base amount of relays per POKT token which is then multiplied by the amount of native POKT tokens staked.

The ParticipationRate acts as a proxy for monitoring and measuring the Pocket Ecosystem and is reflected on a block by block basis. It does it by adjusting an application’s MaxRelays dynamically based on the growth or decline in network-wide stake rates.

When is the best time to stake?

The best time to stake is during the growth phase. The growth phase is the amount of throughput that is gained as the participation rate grows from its initial launch. What does this mean? This means that you don’t pay anything else until the network growth has slowed down and the application burn kicks in.

Conclusion:

During testnet, Pocket Network Inc. will have an online faucet that’ll send you test POKT tokens so you can try out and access the Pocket Network. During this time, the market can begin testing the initial price point for throughput. Once the protocol arrives at mainnet, where users will have to pay for real POKT tokens, the market encourages developers to take advantage of the protocol’s growth phase, when you can obtain more throughput for the base amount of tokens staked.

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Originally published at https://pokt.network on January 23, 2020.

Connect any App, to any Blockchain, from any Device.

Jeremy Beal

Written by

Pocket Network
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