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What is Relay Mining? Meet the Incentive System Fueling the Decentralized Data Revolution

Posted on March 19, 2025 - 6:18 pm by

In summary:

  • Applications connect directly to Pocket Network’s decentralized infrastructure, with optional gateways (Portals) serving as off-chain proxies to facilitate access.
  • Relay mining incentivizes participation and powers the network
  • Pocket Network addresses data accessibility challenges in Web3 and AI

The intersection of AI and Web3 has been profound and immense, creating an ever-growing demand for data. But this demand comes with challenges: skyrocketing costs, copyright ambiguities, and centralized choke points that threaten the open internet. Even worse, the incentives between data providers and consumers often clash.

When large language models (LLMs) are trained on blog content, for example, they risk cannibalizing the very traffic those blogs rely on. The result? A lose-lose scenario: creators lose visitors, and AI models lose access to fresh, high-quality data.

Enter Pocket Network, a decentralized infrastructure protocol that has been pioneering solutions since 2017. With thousands of nodes across 50+ blockchains, Pocket introduces Relay Mining, a crypto-economic system that aligns incentives through verifiable work.

👉Curious about a deeper dive into this innovation? Read this whitepaper: Relay Mining: Verifiable Multi-Tenant Distributed Rate Limiting.

What is Relay Mining?

Relay mining validates and processes network requests in Pocket Network. It allows participants to earn rewards by serving blockchain data to applications. Services (nodes) run nodes that handle API requests from apps needing access to blockchain data.

These miners compete to service relays and earn POKT tokens as payment. The system aims to create a decentralized infrastructure for blockchain data access. It differs from traditional crypto mining in that it focuses on useful work rather than solving arbitrary puzzles.

Relays are the core units of work in Pocket Network. They represent API requests from applications to access blockchain data. When an app needs information from a specific blockchain, it sends a relay request through the network.

Key mechanisms:

  • Relays: Individual data requests (e.g., “Fetch NFT ownership data for CryptoPunk #123”).
  • Cryptographic proofs: Nodes use digital signatures, commit-and-reveal schemes, and Sparse Merkle Sum Tries (SMSTs) to impute ownership.
  • Distributed rate limiting: A fair-share algorithm prevents network spam like a decentralized traffic light system.
  • Applications: Applications stake POKT to access the network and direct requests to servicers.

One of the standout features of relay mining is its verifiability. The network ensures that miners have processed only valid relays before issuing rewards, preventing fraudulent claims, and maintaining the system’s integrity.

This verification process helps maintain high-quality service across the network. It also allows for fair reward distribution based on actual work performed. The system’s transparency builds trust among participants and users.

Let’s use an analogy below to make things clearer:

Think of relay mining as a decentralized courier service—such as UPS for blockchain data. Apps are customers needing packages (data) from various warehouses (blockchains). Servicers are the delivery drivers picking up and dropping off these packages.

Each successful delivery (relay) earns the driver a small fee. The network tracks all deliveries to ensure drivers are doing their job correctly. This system creates a reliable, efficient way for apps to get the necessary blockchain data.

Relay mining decentralizes blockchain data providers and consumers just as a courier service connects senders and recipients.

How Relay Mining Works: A Technical Overview

Relay mining is a key process in the Pocket Network that incentivizes participants to handle network requests. It uses probabilistic mechanisms and crypto-economic incentives to estimate RPC volume usage and enable decentralized multi-tenant rate limiting.

What are the Key elements of Relay mining?

The key elements of relay mining include:

  1. Applications: Clients that stake POKT to access blockchain data.
  2. Servicers(Nodes): They process requests and interact with blockchains.
  3. Proofs: Evidence of completed work by nodes.
  4. Crypto-economic incentives: using a native cryptocurrency on a distributed ledger to reward Servicers (RPC providers) for handling read requests, reducing reliance on altruistic or centralized node providers.
  5. POKT tokens: The incentive for participating in the network.

Relay mining in Pocket Network works like a digital delivery service. Servicers in the network act as couriers, picking up user data requests and delivering them to the right blockchain. When a servicer completes a delivery, it logs the work in a Sparse Merkle Sum Trie (SMST).

The process starts when an application sends a request directly or through an optional gateway. The servicer handles the request and generates proof of work. At the end of each session, servicers submit their total work to the network and must reveal a randomly selected proof for verification. If the proof checks out, they are rewarded based on their total estimated relays, not just the selected proof.

This system encourages servicers to handle requests efficiently and honestly.

Let’s break it down step-by-step:

  1. Application requests data.
  2. Servicer nodes serve the request.
  3. Relays are recorded and verified on the blockchain.
  4. Servicers are rewarded with POKT tokens based on the number of valid relays they serve, as estimated through probabilistic mechanisms. 

The magic lies in Verifiable Multi-Tenant Rate Limiting, a system that ensures fairness and scalability. It’s like a traffic cop for data requests, ensuring no single user or node hogs the network.

Relay mining uses probabilistic mechanisms to estimate network traffic. This approach allows the system to scale efficiently, helps prevent spam, and ensures a fair distribution of work among nodes.

The process creates a balanced ecosystem. Users get reliable access to blockchain data. Nodes earn rewards for their services. The network maintains decentralization and security.

Relay mining makes Pocket Network run smoothly without becoming too complex. It’s like a game in which players (Servicers) complete tasks (handling requests) to win prizes (POKT tokens). The rules are simple, but they keep everything fair and efficient.

The system doesn’t need to track every request. Instead, it uses smart math to guess how much work each node is doing, making the network faster and cheaper to run.

This means reliable service without high user costs. It’s a way for node operators to earn rewards while supporting decentralized networks. The whole process keeps Pocket Network running without a central authority in charge.

The Innovation of Relay Mining – and Why it’s a Breakthrough

Relay Mining is a new approach to decentralized infrastructure. It uses clever math and economic incentives to estimate RPC usage and fairly reward network participants.

Relay Mining uses probabilistic mechanisms to track RPC traffic. This allows the network to scale efficiently, as it doesn’t need to record every request. The system creates a fair marketplace where costs and earnings reflect actual, verified usage, aligning the interests of all network players. It also enables permissionless servicers. Anyone can join and provide services. This increases network resilience and decentralization. Because the process is efficient and low-cost, it allows even small players to participate. This widens participation and strengthens the network.

While traditional solutions might not fairly reward all participants, Relay Mining ensures everyone is paid for contributions, creating a more sustainable ecosystem.

Benefits For Network Participants

Pocket Network offers unique advantages to different groups involved in its ecosystem. These benefits drive engagement and growth across the network.

For Suppliers (Node Operators)

  • Incentivized participation: Earn POKT tokens for providing a valuable service to the network.
  • Monetization opportunity: Turn idle hardware into a revenue-generating asset.
  • Fair and transparent rewards: Relay Mining ensures that rewards are distributed proportionally to the work done.

For Applications (Developers)

  • Reliable and cost-effective data access: Access a decentralized network of data providers.
  • Scalability: Benefit from the network’s ability to handle many requests.
  • Censorship resistance: Rely on a decentralized infrastructure that is less susceptible to censorship.

For Token Holders

  • Value accrual: As the network grows and usage increases, the demand for POKT tokens is expected to rise, potentially increasing their value.
  • Network security: Staking POKT contributes to the security and stability of the network.

Real-World Adoption: Who is Using Pocket Network Today?

Pocket Network is making waves across various blockchain ecosystems, providing reliable and decentralized access to data. Let’s explore some of the key users leveraging this innovative infrastructure.

  • Ethereum and Polygon projects: Many decentralized applications likely rely on Pocket Network to fetch on-chain data efficiently and cost-effectively. By reducing operational costs, Pocket enables these dApps to function smoothly without financial strain.
  • Web3 Gaming Projects: Blockchain-based games may depend on real-time data feeds, from in-game assets to transactions. Pocket’s decentralized RPC services ensure seamless gameplay by delivering reliable and uninterrupted data access.
  • DeFi Applications: In the decentralized finance (DeFi) sector, applications use Pocket Network for price feeds and transaction processing. Its decentralized structure eliminates single points of failure, a crucial factor in maintaining trust and reliability within DeFi.
  • AI & Machine Learning Models: AI and machine learning developers are beginning to explore Pocket Network as a robust and censorship-resistant data source for model training, making it an attractive option for researchers in this field.

Future Horizons: Where Relay Mining Takes Us

Relay Mining is crucial in Pocket Network’s vision for an open data network. It can power a wide range of decentralized applications and use cases.

The most exciting future development coming to Pocket through the Shannon upgrade is the addition of Websockets, allowing relay mining to support long-lived connections like websockets.

Final thoughts

Servicers play a crucial role in the Pocket Network ecosystem, providing data to on-chain users for training AI agents, predicting market movements, and powering decentralized applications. 

As the gateway ecosystem grows, new possibilities for builders and data brokers will continue to emerge, with relay mining serving a critical role of attributing and rewarding participants. 

Additional readings:

  1. POKT DOCs – A comprehensive guide on how the network operates.
  2. Pokt-Network GitHub repository – User documentation and technical resources.
  3. Community Shepherds – Governance initiative supporting the ecosystem.
  4. Pocket Network profile on Messari – Analytical overview of the project.
  5. TL;DR summary of the AI litepaper – Insights into Pocket Network’s AI-driven developments.
  6. Michael O’Rourke’s Grove’s Gateway Thesis – Discussion on broader implications of Pocket Network’s technology.