What is Pocket Network and how can Pocket nodes generate passive income (even if you don’t have enough $POKT crypto tokens for a full node)?
Let’s take a look and find out why Pocket Network nodes are very different to other ‘passive income nodes’ you might be familiar with and how you can grow and compound without technical knowledge via PoktPool.
What is Pocket Network?
Pocket Network is a cross-network, reliable and decentralized web3 API protocol for all major blockchains; Ethereum, Solana, Avalanche, Algorand, Harmony, Polygon, Binance Smart Chain and more. It aims to keep costs for developers low (ie the costs to query data via the API) whist passing rewards/revenue to the node operators.
Essentially it is a relay that allows developers and dApps to easily and economically query data from multiple blockchain sources by creating a marketplace of decentralized nodes (supply side) and developers/dApps (demand side). Decentralization means there is no single point of failure and the infastructure and uptime is more reliable.
Pocket market themselves as a protocol, not a SaaS (softaware as a service) business; no subscriptions, no hidden fees and no lock-ins. If you’re a dApp developer, you can get started for free https://docs.pokt.network/home/paths/app-developer
However, if you’re reading this, you’re probably more interested in the passive income crypto opportunity that Pocket Network provides…
There is no cap on the number of $POKT tokens. They launched with a fully diluted supply of 500 million. New $POKT is minted every block, meaning it is inflationary.
This is to incentivize and reward node operators — they stake $POKT to create nodes and earn $POKT rewards.
However, developer/dApp spend will be burned in equal or greater quantities to those being generated by nodes.
Meaning $POKT will become deflationary. 🙂
Pocket Network – passive income nodes
Nodes get rewarded when developers and dApps use data. So, by creating a POKT node, you can earn fairly passive income.
I say ‘fairly’, because operating a node is not entirely passive if you are responsible for its upkeep.
However, there is another way which I’ll get to later. #Poktpool 😉
Note that as already mentioned, a POKT node is a proper, functioning piece of kit that supports the blockchain. It is not one of the passive income ‘nodes’ that exist which are not really nodes (read more on failures and rugs by “nodes” and “DAOs” here).
This brings us on to…
How much can I earn from a POKT node?
POKT being a true node means the rewards provided will vary based on demand and activity on the network. It fluctuates.
A node earns around 60-100 POKT per day.
So if the token price is $1, then you would ‘earn’ $60-100 per day assuming you sold the tokens at market price.
Due to the utility of the token, it is anticipated that if successful, the price will rise over time as more users come onboard to the POKT Network.
How much does a POKT node cost?
In terms of tokens, you need to stake 15,000 $POKT for a Pocket node and around 100 extra POKT for a burn buffer.
Pocket Network (POKT)
You’ll also need a server (eg VPS hosting) which can vary in cost.
What is the ROI on a Pocket node?
Due to the rewards varying and the token price changing, it is virtually impossible to provide accurate info on ROI.
However very crude maths says;
If it costs me 15,000 POKT and I earn 100 POKT per day, then it will take me 150 days to gain 15,000 $POKT tokens….obviously if you are earning closer to 60 POKT per day, then it will take around 200 days, excluding any VPS hosting fees.
The good news is that your 15,000 $POKT tokens are staked – you still own them and can unstake. Another difference to most of the passive income nodes (aka ‘fake nodes’!).
Also, by using POKTpool, you can speed up ROI due to their weekly compounding system.
How to get a $POKT wallet
As the name suggests, Pocket Network is it’s own network and blockchain. That means you will need a Pocket wallet to store your tokens.
You can get the wallet from Pocket: https://wallet.pokt.network – as with any wallet, be sure to store your password, seed and json securely.
Where to buy $POKT tokens
You can purchase Pocket Network tokens via OTC (‘Over The Counter’) process StarDesk is the Escrow platform of choice due to its low cost, however there are other options here: https://forum.pokt.network/t/overview-of-otc-markets/629 .
You can also purchase on crypto exchanges Gate.io, MEXC Global and Huobi.
How to setup a POKT node
Full details on how to setup a Pocket Network node can be found here: https://docs.pokt.network/home/paths/node-runner
It’s a fairly technical process and one I choose to avoid for that reason and a couple of others; I don’t want to manage uptime and I want to maximise compounding opportunities.
I want passive income 😉
A POKT node is too expensive – no it’s not!
Well, maybe it is, however, there is another option; fractionalized nodes.
Not only fractionalised, but auto-compounding and fully managed 🙂
Sounds like a dream, but it’s real…
What is POKTpool?
Poktpool is a platform that enables you to participate in fractionalized POKT nodes and more!
If, like me, you don’t particularly like running command lines, want as little responsibility as possible and as much passive bang for your buck, PoktPool is the answer.
It’s automated fractionalized staking pool for POKT nodes mean you can earn passive income even if you can’t afford a full node.
And your POKT rewards are auto-compounded every week!
Poktpool take 10% as their fee however this is more than compensated for by their uptime and automated weekly compounding.
Currently (March 2022) Poktpool are updating their entire system and making it a lot easier to join the pools.
At this time, it’s a bit cumbersome and managed via Google forms, Discord and spreadsheets (screenshot above).
Very soon, their new platform will allow anyone to join and manage their POKT with ease.
Meanwhile, there’s not much point in me writing a detailed guide on the current/old platform.
You can check it out here https://poktpool.com – I recommend joining their Discord and getting a feel for how things operate.
Note that when the POKTpool platform goes live, it will require KYC to register (anyone on the current POKTpool system will also have to KYC).
POKT notes / conclusion
There is a 21 day unstaking period for your node. This is a safety measure to prevent nodes from coming on and off the network regularly and ensuring uptime. This also applies if you choose to use POKTPool.
Overall, POKT is yet another diversification within the crypto space for me. It is a blockchain with a purpose and has already proven utility and has potential to be hugely successful as Web3 takes hold.
For me, using POKTpool for my POKT is a no-brainer — they look after all the tech and enable me to invest and grow without having enough POKT for a full node. Obviously, this might not be a viable option for some people due to the forthcoming requirement for KYC.
Also, with POKTpool, you are handing over your POKT to a centralised platform which may be deemed more risky for some…or safer for others!
NOTE: THIS ARTICLE IS A WORK IN PROGRESS
This article is a work in progress and will be updated with more information on the new POKTpool platform + other non-KYC pooling opportunities, POKT team/people etc over the coming weeks….just busy times right now. Meanwhile, go Google em and join the Discords!!