[DRAFT] [GF: Phase 1 Proposal] Pocket Network

ARCHIVED & OLD Missions Governance Fund: Phase 1
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Project name: Pocket Network

Author name and contact info (please provide a reliable point of contact for the project): Jesse Jones - @duckie3351

I understand that I will be required to provide additional KYC information to the Optimism Foundation to receive this grant: Yes

L2 recipient address: 0xc84852f566C1b34DA3b3c72cd58796a48B91D38b

Which Voting Cycle are you applying for?: Cycle 8

Grant category: Infrastructure

Project description (please explain how your project works):
Pocket Network is a decentralized RPC service that enables a permission-less network of independent node operators to be incentivized for running full nodes for blockchains supported by the network. Daaps pay for RPC throughput by staking POKT token, and node operators are compensated in POKT token based on RPC requests served. The beauty of this model is a positive feedback loop that is created: as the usage of the RPC increases, the incentive payout for node runners also increases, thus incentivizing more full nodes to spin up and strengthening the overall RPC service. This model reduces central points of failure within the RPC layer, while increasing geographic distribution, redundancy, and censorship resistance. We currently support over 38 blockchain networks, including many popular EVM protocols. For real-time network data visit: https://www.poktscan.com/. By sponsoring daap’s usage of Pocket RPC within the Optimism community we are contributing to decentralization, increased resiliency, and censorship resistance of the network.

Pocket expedited support for Optimism on 13/06/2022 after feedback from the community regarding problems with existing RPC services. Since then we have not rate-limited the public Optimism endpoint and our Optimism traffic has grown day by day and recently broke into our top 10 chains by relays (currently at 40m relays per day), signaling the service to value to the Opti community and builders.

POKTscan
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Providing this service is unsustainable and as we launch our paid strategy at the end of September, rate-limits across all public infra will be introduced and we are therefore seeking support from Foundations to continue to operate high-quality public goods. As opposed to other providers / running your own nodes, investing in Pocket in not a sunk cost but rather just an opportunity cost - POKT must be purchased and staked to utilize the protocol, but this POKT is owned by Foundation and this investment can be recouped (subject to POKT token price fluctuations) on the open market at any time the OP Foundation wishes.

Project links:

Additional team member info (please link):

Team Size: 60 team members

  1. Leadership: 8
  2. Operations / BD: 7
  3. Marketing: 7
  4. Financ e / HR: 6
  5. Governance: 6
  6. Engineering: 31

Social profiles

  1. CEO
  2. CTO
  3. CGO
  4. COO
  5. CIO
  6. CMO

Relevant usage metrics (TVL, transactions, volume, unique addresses, etc. Optimism metrics preferred; please link to public sources such as Dune Analytics, etc.):

Portal-Stats-Grafana
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Competitors, peers, or similar projects (please link):
Infura
Alchemy
QuickNode
ANKR

Is/will this project be open sourced? Yes

Optimism native?: N/A

Date of deployment/expected deployment on Optimism: 13/06/2022

Ecosystem Value Proposition:

Providing the Optimism ecosystem with high-quality RPC infrastructure for new projects to reliably source current and historical Optimism data

Has your project previously applied for an OP grant? No

Number of OP tokens requested: 185,185

Did the project apply for or receive OP tokens through the Foundation Partner Fund?: No

Proposal for token distribution:
123,456 for delivering network support via our network of 30K full nodes throughout the world and fixed overhead costs in maintaining the service
61,729 for on-going throughput (currently at 40m relays per day) which will be exchanged for POKT in order to be staked on our network to receive the current bandwidth of relays. This is effectively a token swap and OP Foundation would own the POKT stake that they can request be unstaked and transferred to them at any time if the service is no longer needed.

If we were unsuccessful in our proposal to secure retroactive funding, we would still want to continue to support the network and therefore in an effort to do so sustainable, we would introduce performance limits that would channel users to our paid tiers in our portal where costs would be passed on to Opti-builders.

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You will need to comply with the draft stated here

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Updated to suit the template requirements

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hello @duckie3351 and thank you for your proposal. The purpose of this grant phase is to incentive usage and growth on Optimism, and your proposal as it currently stands is asking for retroactive funding. I would encourage you to consider applying for a retroactive funding once this phase starts or rewrite your proposal to better fit the goal of this grant phrase.

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hi @marc!

Thank you for your feedback. I see your point - part of this proposal does seek retroactive funding for the work already completed in spinning up support for Optimism so our network of node runners were incentivised to start receiving relays. I would be happy to separate this part of the proposal at your request if preferred. I was unaware of this and unable to find info online that details it. This would be super helpful. Thank you.

The second part of this proposal is focused on future usage and growth. Currently our publicly exposed endpoints for Optimism are doing 44m relays per day (1.2B per month - thousands of dollars per month on an enterprise plan). This represents another 10% growth since I originally submitted this proposal. Optimism is one of our fastest growing networks. To sustain this growth we have two options in front of us:

  1. The first is to request support from foundations as we have done here. This would allow us to stake POKT on behalf of the Foundation and Optimism builders would be able to continue to utilise this public good for the next 24 months.

  2. If the grant application is unsuccessful, we would rate-limit the public endpoint at our free tier (250K relays per day - a drastic cut from the current 44M per day) to encourage builders to sign up for a paid plan with us or a competitor (hopefully us). This is necessary for us to cover costs of the every-growing ecosystem of networks we support as we can’t continue to offer such a high number of relays for free.

Therefore this application is directly contributing to the growth of the Optimism ecosystem over the next 2 years in a substantial way.

I have two questions:

  • Is it preferred I split this into two applications although they are intrinsically linked?
  • When does this growth grant application round end and the next retroactive funding phase begin?

Thanks,
@duckie3351

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To answer your questions:

  • Indeed, retroactive funding phase hasn’t been announced. There’s no set date yet announced from the Optimism Foundation as far as I am aware. You can read about it more here.

  • If you are requesting support and funding directly form the Optimism Foundation, there’s a specific form to fill in order to get a partner’s grant. This is part of the 5.4% of the OP token supply dedicated to the partner fund. Find the form here

  • A proposal submitted on gov.optimism.io is part of the Governance fund, voted and discussed by the community, and eventually voted on by the Token House, or governance participants.

  • Cycle 8 has already began and votes are on snapshot. Cycle 9 will be dedicated to grants council and protocol delegation program proposals. January 19th: Season 3 starts with Voting Cycle #10. See more here.

That being said, I do see that you can both try to reach out for a partners fund, as well as ask for a grant from the governance fund cycle #10 incentivizing usage of your RPC endpoints.

I will give you my feedback, and you can feel free to take it or adjust it based on your judgement. A better proposal from Pocket imho would:

  1. Encourage new builders to deploy to Optimism with its RPC endpoints. The funds would be used for the usage of RPC endpoints for projects that haven’t deployed yet on Optimism.

  2. Encourage previously deployed projects to continue using your RPC endpoints. Part of of the grant is to subsidize your RPC endpoints (34% for example), while another paid by developers (33%), and the rest 33% you can offer as co-incentives. Letting developers pay for your would validate that you are offering a superior product than the free tiers of other providers.

  3. Not encourage exchanging the grant received for POKT token. The community isn’t a fan of dumping governance grant for other protocols tokens. I tired understanding why there needs to be a token for validators to run a node but I wasn’t able to. You probably have a very clear answer, so if there’s an absolute need to exchange OP for POKT, I would clarify it clearly in your proposal.

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Thank you @marc! This is all great and useful feedback. I will definitely take it onboard and rework our proposal on how we can focus on supporting apps not yet using our OP endpoints as well as subsidise those already on the network.

One thing I’m still a little unsure about:

  • You mentioned Cycle 8 voting has already begun on Snapshot - when does this close and is our proposal automatically transferred to Snapshot once we make the suggested edits and have the final draft here in the forum?
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Voting Cycle 8 already passed. You are on track to make the updates and keep up for Cycle 10 in January

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