Pocket Network was designed to be the most censorship-resistant, reliable, and performant RPC infrastructure provider in the world.
As of Q1 2021, we were relaying only 2-4m RPC calls per day. We realized we needed to find ways to grow the protocol. To improve the UX of using Pocket, we opted to build the Portal, a gateway that integrates with the blockchain on behalf of applications for more convenient access. This decision was also made in service of overcoming scaling and performance-related constraints in our protocol’s V0 architecture. This was the best decision we made as it has led to our exponential growth to 1B daily relays throughout the last year. However the decision also came with a tradeoff – in order to bootstrap our two-sided RPC market, by making the service more convenient, performant, and scalable, we also centralized the demand-side of our protocol.
We are building Pocket Network to be a Sovereign Cryptonetwork. The TL;DR is that there are four vectors that protocols must decentralize to be truly sovereign:
- Capital Markets
We are doing an outstanding job decentralizing the supply and governance vectors of the protocol. When it comes to decentralized demand and capital markets, we still have work to do. Had it not been for the scaling and performance constraints of Pocket today, we would likely already have decentralized demand. As an independent blockchain outside of the Ethereum ecosystem, creating a thriving ecosystem around liquidity, lending, and general accessibility around POKT is not straightforward. While we have made strides getting listed on exchanges this year, we still acknowledge that we have months of work ahead to fully decentralize the capital markets vector.
Pocket Network is a zero-to-one innovation filling in the biggest missing gap in the crypto industry today. It’s clear the entire web3 middleware layer needs to be censorship-resistant, especially the node layer, as every application or abstraction needs to interact with on-chain data. While I am incredibly proud to see how far we’ve gotten, proving that a global set of independent node operators can provide service on par with centralized options, we still have a long way to go.
Enter the US Treasury
When the Tornado Cash news came out, my first reaction was surprise that this had happened far sooner than I imagined. When we first began thinking about Pocket in late 2016, we always felt that the RPC layer would become a prime candidate for censorship, however, I thought we were still 2-4 years away from explicit attacks against the RPC layer.
As a company, and DAO, Pocket Network should never support criminal activity. That said, privacy is an unalienable right. By sanctioning a neutral privacy technology, the US Treasury has compelled US-based communications providers to ban all law-abiding citizens from accessing their unalienable right to digital privacy.
While Pocket Network is a global protocol with a permissionless supply-side surpassing 30,000 nodes, and the Pocket DAO is a supranational entity, the Portal is a centralized access point for the demand-side that is operated by Pocket Network Inc, an entity registered in the US. As an American company, we have hired nearly 60 people across 15 countries, creating over $100M of value as we progressively build credibly neutral, capture-resistant technology. The Portal must comply with US regulations to ensure that we can continue on our mission. To this end, effective immediately, the Portal will be blocking interaction with the following addresses associated with Tornado Cash as mandated by the US Treasury.
Communications technologies have had to fight for institutional change before, and they have had to comply with regulations to ensure they survived long enough to win the fight. SSL, an encrypted communications technology that laid the foundations for much of the World Wide Web today (email, messaging, HTTPS), used to be under strict control by US regulators. It took decades of fighting (while complying) for these technologies to become the world-changing public goods that they are today.
The blockchain industry is in a very similar position today. We are building public goods that by their nature disrupt the institutional status quo. While we will continue to ensure that all technologies controlled by our US entity are compliant with US regulations, we will also continue on our mission to build a supranational censorship-resistant communications technology, and we will be supporting any efforts that help regulators to realize the world-changing benefits that these technologies offer, as they did the World Wide Web.
A critical milestone in our fight for institutional change is the launch of Pocket Network V1. V1 fundamentally re-architects our protocol to be more scalable and performant, such that the Portal is no longer needed as a centralized stopgap. You can learn more about V1 in our docs and follow our public roadmap for V1 on Github. With the launch of V1, we will be able to decentralize the demand-side of Pocket Network, unlocking truly permissionless access to RPC infrastructure.