Applications (or gateways staking on behalf of applications) pay for RPC data requests by staking and burning POKT. Node operators serve RPC data requests for applications and receive block rewards (token incentives) in proportion to their work done.

Pocket Network is a decentralized infrastructure protocol (a blockchain) that provides RPC data for blockchains. Pocket Network was founded by Michael O’Rourke and launched in 2020.

Pocket Network is governed by the Pocket Network DAO. Pocket Network's investors include Placeholder, 1kx, Arrington Capital, etc.

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Infrastructure

Pocket Network

# Pocket Network Expenses Methodology

## 1. Overview

PocketNetwork expenses represents the total daily USD value of token rewards distributed to network participants including node operators, miners, and other infrastructure providers. This metric captures the protocol's operational costs by measuring POKT token incentives paid out to maintain network services. The calculation processes raw reward data from PocketNetwork's APIs across two different schema versions and converts native token amounts to USD using daily market prices.

## 2. Data sources

- **PocketNetwork API v1 data**: Raw fees and rewards data from PocketNetwork's scraper API covering the period up to January 11, 2022, containing aggregated `nodeRewards` parameter values
- **PocketNetwork API v2 data**: Token incentives data from PocketNetwork's updated API structure covering periods after January 11, 2022, with separate `servicer_amount` and `producer_amount` parameters for different participant types  
- **End-of-day price feeds**: Daily market price data from CoinGecko for the POKT token using the `pocket-network` identifier to enable USD conversion

## 3. Step-by-step calculation

### Component A: POKT rewards data extraction
- **Purpose**: Extract and standardize POKT reward data from two different API versions with different schemas
- **Logic**: For the v1 period (through January 11, 2022), extract aggregated node rewards using the `nodeRewards` parameter and classify as "Aggregated token incentives". For the v2 period (after January 11, 2022), extract separate reward amounts using `servicer_amount` for "Node Operators" and `producer_amount` for "Miners". Both versions include timestamp, chain identifier as 'pocketnetwork', business classification as 'Blockchain' and 'infrastructure', and token symbol as 'POKT'
- **Key fields**: Raw reward amounts from `nodeRewards`, `servicer_amount`, and `producer_amount` parameters, along with participant account classifications and timestamps

### Component B: Token incentives calculation
- **Purpose**: Process raw POKT amounts, correct decimals, aggregate by day, and convert to USD
- **Logic**: First, correct decimal places by dividing all raw amounts by 1,000,000 (1e6) to convert from smallest POKT units to actual POKT tokens. Truncate timestamps to daily boundaries and group by day, summing all token incentives across different account types for each day. Join with CoinGecko daily market price data using the 'pocket-network' identifier, multiplying daily POKT amounts by corresponding USD prices to get dollar values
- **Key fields**: Corrected `token_incentives` amounts after decimal adjustment, daily aggregated sums, and USD-converted values using daily price multipliers

### Final aggregation  
- **Combining components**: The finalized token incentives data flows directly into the expenses calculation without additional transformation
- **Currency conversion**: USD conversion occurs during the token incentives calculation using end-of-day CoinGecko prices matched to daily timestamps
- **Time aggregation**: All data is aggregated to daily boundaries using timestamp truncation, with final sums representing total daily reward distributions
- **Final calculation**: The expenses metric equals the total USD value of daily POKT token incentives distributed to all network participants, with any missing days filled with zero values to ensure complete time series coverage

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total project operating and incentive expenses.

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