Keystone PM: @Jack
Copilot: @Dermot
The protocol will continue to have negative net revenue for as long as supply-side fees (emissions) exceed demand-side fees, i.e. POKT will be inflationary. However, as we said above, making protocol revenue our north star does not mean that we should turn on net revenue (deflation) overnight. As long as our gross revenue (demand-side fees) is growing, and thus our potential to generate net revenue once we cut the protocol’s COGS (emissions), we are making progress towards our north star.
For this reason, we would propose breaking the “protocol revenue” north star down into a short-term, a medium term, and a long-term metric:
So now that we know what the road to revenue looks like, how are we going to embark on the journey? Below we outline an implementation plan.
| Stakeholder | Roles & Responsibilities |
|---|---|
| PNF | Facilitate this implementation plan; Governance transactions (parameter changes and burns) on the DAO’s behalf |
| Gateway Operator(s) | Sell relays; Reduce operating costs |
| Economists | Build more robust models of all of the ideas outlined above, to help the DAO make informed decisions; Design an updated emission control policy as described above |
| Voters | Evaluate and approve/reject the proposals stemming from this plan; Govern demand-side and supply-side fees |
| Protocol | Incorporate lessons from GatewayOperatorFee era into v1 design |
| Deliverable | Stakeholders | Timeline |
|---|---|---|
| Finalize a fee collection and burning process | PNF, PNI | This Week, Done |
| Audit legacy parameters/proposals that may need to be formally overwritten (e.g. PUP-9, PUP-23, PUP-7, USDRelayTargetRange, ReturnOnInvestmentTarget) | PNF | This Week, Done |
| PNI to start transferring POKT into the DAO treasury, in advance of approved PIP to activate burn | PNI | May 1st, Done |
| Publish PIP to introduce and activate GatewayOperatorFee and burn | PNF, PNI | May 1st, Done |
| Pending PIP approval, test burn transaction then begin burns | PNF | Mid-May, Done |
| Build models of the ideas in this post to help with analysis | Economists | Q2, Blocked |
| Design an updated emission control policy as described above | Economists | Q2, Blocked |
| Confirm our interpretation of protocol revenue definition with data aggregators (Messari, Token Terminal, Web3Index) | PNF, Economists | Q2, Done |
| Update POKTscan to track gov burn transactions, create a dashboard similar to https://ultrasound.money/, and create API endpoints for tracking cumulative burn | POKTscan | Q2, Done |
| Liaise with data aggregators to incorporate new burn data into their dashboards (Messari, Token Terminal, Web3Index) | PNF | Q2, Done |
| Incorporate The Road to Revenue into PNF’s PR strategy | PNF | Q2, Done |
| Node Economics Survey | PNF, 1kx | Q3, Done |
| Continued reporting to the DAO on gateway cost reduction efforts | Gateway Operator(s) | Q3 onwards |
| Continued refinement of demand-side and supply-side fee parameters | Economists, Voters | Q3 onwards |
| Incorporate lessons from GatewayOperatorFee into v1 | Protocol | Q3 onwards |
No budget is allocated specifically towards this project.