wPokt Launch: Subsidized Infrastructure Through Regen Finance

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Pocket Network

4 min readMar 18, 2021

Pocket Network is proud to announce the upcoming launch of wPOKT, a fully collateralized ERC-20 token version of our POKT token, which is slated for Q2 this year. Also, a novel regen finance data farming program comes with the launch of wPOKT changing how farmers think of yield.

Oh? You don’t know what POKT is anon-kun?

First of all, NGMI.

That is, unless you read this of course. Pocket Network is essentially a blockchain agnostic protocol that incentivizes full nodes and decentralizes dAPP infrastructure.

POKT is staked in exchange for a proportional amount of relays for the lifetime of the staked POKT. Currently, the ratio is 1 POKT to 1.67 relays per session (each session lasts 6 blocks or roughly 1 hour).

As infrastructure demands increase for a particular app or protocol, more POKT can be staked. If the project is scrapped, the POKT can be unstaked, allowing developers to recover which was once a sunken cost.

This innovative tokenomics model reduces infrastructure costs by 10x, and removes the largest central point of failure for majority of projects using Infura, AWS, etc.

Find out why Decrypt calls us “Web 3’s answer to Amazon Web Services” here.

Why Wrapped POKT?

While we believe that the future of finance will be multi-chain and are actively positioning ourselves to be the decentralized infrastructure protocol of choice, the current future of finance is firmly on Ethereum.

With $41.5B in TVL (according to Defi Pulse), the Ethereum Network is settling around $25B per day in value — more than twice that of even Bitcoin’s.

We believe the overwhelming majority of liquidity and projects will remain on Ethereum for the foreseeable future, so a bridge between POKT and wPOKT was an obvious next step.

How can I get wPOKT?

Initially, token distribution will be done via a Balancer Smart Pool (wPOKT/DAI) as this will allow granular control to ensure fairer distribution.

Specifically, we’ll be using the smart pool as an LBP, or Liquidity Bootstrapping Pool. In practice, Pocket will actively adjust the ratio between wPOKT and DAI as time elapses.

Initially, heavy weighting in favor of wPOKT will be seen but the curve will flip as the sale period ends.

Theoretical Price Example. Actual Numbers TBD.

The purpose of this will be to keep the price steady throughout the distribution period, with a minimum price close to POKT for added downside protection.

Where can I get wPOKT after initial distribution?

For users who were unable to acquire tokens during this event, the proceeds left over after initial token distribution (which will be heavily weighted towards DAI at this point) will be used as seed liquidity on Sushiswap.

Staking wPOKT

Unlike the de facto standard of staking where user liquidity is incentivized with the tokens of the project (this is also the initial distribution event), staking wPOKT will allow users to participate in regenerative finance through data farming.

How it works is so:

Users acquire wPOKT, either through participation in the initial Balancer LBP, exchange POKT to wPOKT at a 1:1 ratio, or purchasing through an AMM like Sushiswap.
wPOKT are put into “Staking Farms” — smart contracts that let staked wPOKT earn a yield proportionate to relays subsidized by the Staking Farm.
The longer you stake the more rewards you get — deposits start at 1x and increase linearly to 3x if you stake for 60 days.

Staking Farms And Regen Finance

At launch, a single staking farm will be launched. All staked wPOKT into this farm will subsidize relays for all Ethereum applications currently using Pocket Gateway — a network farm, if you will.

Farmers seeking higher yields could do so by staking wPOKT for protocols they think will require a large number of relays — remember a big factor of yield is relay usage by the underlying application.

This mechanism is why we’re calling wPOKT the first-ever regenerative finance project: growth leads to higher yields.

Everyone’s incentives are lined up and benefit:

Farmer's yields increase as apps/networks grow.
Apps are more reliable and draw in new users.
Networks are more robust with new infrastructure, encouraging new users to stay.