This blog is about $POKT’s price action and price alone.
Price of a token doesn’t have to be backed by use cases and fundamentals.
Similarly, project fundamentals need not lead to token price appreciation or even sustenance.
Pocket Network is going through the exact same problem.
There is a bigger problem in Pocket- its a builder community that either doesn’t understand markets &/or are in denial of the existential nature of $POKT (Pocket’s native token) free falling.
There are those “let’s just build” & “if we build, they will come” vibes.
I have been very concerned since Q1 & have been repeatedly warning-
And this is my last and final attempt to sensitise the Pocket community leaders to pay exclusive attention to $POKT’s price just as they pay attention to other builder metrics.
The permanent residents of $POKT verse mimic the over zealous and optimistic nature of crypto in general. They are perma-bullish no matter what. Those include a few in $POKT verse I happen to call friends. Their stakes are high and they are invested in this project in many different ways. If I were in their shoes, I would probably not be any different.
Hence accepting critical feedback and those resulting in actions don’t come naturally & swiftly in $POKT verse.
There is also a tendency of “know it all” amongst community members. To repeat what I have said in the past- being a star node runner or a star dev or a star data scientist doesn’t make anyone a market, econ or marketing pro or in some other craft.
The decentralised nature of decision-making plays a role in slowing things down; that just comes with the package.
In the past 10 months, I have been vocal about:
-Macro/crypto correlation (related to $POKT price)
-Marketing/Narrative building
-Inflation
-Common mission, values & goals
-Protocol revenue or lack of it (financials in general)
-Importance of financial dashboards such as Token Terminal
-DAO expenses & treasury management
-Price of $POKT (again recently)
There are plans in place to address many of the above but the teams seems to be missing the existential impact of $POKT’s price action since Q1, 23.
And I am here today to raise an alarm.
2022 was a lost year for Pocket Network & the foundation is in an extremely challenging position shouldering baggages from 22 and new ones in 23.
2023, specially April has seen a flurry of bull posts & announcements from the community leaders @ Pocket Network-
And there is one more coming out about protocol revenue, decentralising the gateway pre-v1 in Q3 and activate demand side fees with an off-chain burn.
Now let us check these charts-
Y’all are used to staring at $POKT/USDT charts, comparing with $BTC & $ETH might be little unfair (although smart investors would consider those data point); so I thought let me plot $POKT against Total Market Cap & the closest peer/competitor in the market $ANKR.
Let me be ALL CAPS Jason Calacanis for a second-
“THE MARKET ISN’T BUYING YOUR STORY; CONVINCE THE MARKET INSTEAD OF CONVINCING EACH OTHER.”
The first time I had raised an alarm about $POKT’s price was in Q2 22 when the community didn’t see what macro would do to the crypto market & therefore $POKT. I remember winning a friendly bet against a community leader. Impact from macro became common knowledge in the crypto community & several other bad things happened in crypto in 22 that took the entire space down. “Correlation” became THE REASON for $POKT going to All Time Low. Fair enough!
Then came Q1 2023 when market went up yet $POKT didn’t (except during the Ku Coin campaign week), & I spoke (pay attention to the last sentence)-
And then I again alerted when $POKT didn’t move up with the market in Q1,23 but moved down recently with the market-
These are signs that only those who spend 24X7 in the markets can catch.
The daily volume of the largest exchange Ku Coin hovers in the 20s-30ks: disgusting!!
The 2nd largest exchange Huobi delisted $POKT.
$POKT is now sitting at “New ATLs”.
And it’s still not looking pretty unless intervened and made a priority for the next few months starting right now.
So why am I obsessed with price?
I agree with once $POKT community member Vitaly’s response to my tweet-
The free falling of price & liquidity is existential to the node operators, security, DAO treasury, protocol development, you name it.
DAO expenses are in USD; what happens if price drops another 50%, to .02s & .01?
Even if price stays at these levels for another 9 months?
I am not making doom predictions but given the fragilities, I also wouldn’t bet against a crisis. I would say that it’s already a moment of crisis.
Let me take this to another level quoting Jason’s tweet, which I agree with-
The above is true about all legit protocols, including $BTC & $ETH. Think for a few minutes to find some substance in the tweet. Is $POKT special?
The is no other asset class & space where reflexivity works as good as it does in crypto. Read “The Alchemy of Finance” by George Soros, one of the greatest investors alive, to understand how “reflexivity” works in markets.
And as mentioned, no other space reflects this better than crypto.
Narrative drives price & price drives narratives.
Convention is that the best and the brightest as ecosystem participant build fundamentals that price ultimately reflects, but its also the other way round- price attracts the best and the brightest to the ecosystem.
The free falling token price does exactly the opposite.
You can’t build the community you want to build in these conditions.
And whatever is remaining will stay divided & torn.
Price is the most effective unifier in the community. Whether the idealist want to believe it or not.
Next-
Every time someone mentions price, a diehard $POKT community member or leader tries to counter that with “fundamentals”.
Fundamentals can have the following characteristics-
A) The token value can be decoupled from fundamentals such as $UNI, $ATOM, $MKR, etc
B) Fundamentals can take time to unfold and specially to impact price.
The following projects have/had great teams, fundamentals, fundings, and few even did pioneering things at some point -
$ZRX, $DASH, $XMR, $ZEC, $ZIL, $KNC, $DCR, $BNT
How relevant are they now despite a lot of initial hype?
And I am being kind to list those that are not dead at least, few are still very respected with have active communities.
Price is the primary reason behind their dormancy.
Price is also the most effective marketing tool in crypto; add reflexivity & the importance of price goes beyond dumb retail.
You can call the little guy who is complaining about price smol brain, moon boy, someone who doesn’t understand &/or care about fundamentals.
But what would you call the collective intelligence of the market that is showing you the mirror not once but repeatedly?
Pocket Network maybe clearing other tests but it is consistently failing the test of the market, which is the ultimate test in a tokenised project (barring few exceptions), traded in the public market.
Do you even care anon?
The negative sentiment in the $POKT community this time around is not from tourists alone, can sense it from participants who are well invested in the ecosystem, including star node runners.
Market is signalling hard & it requires intervention, shouldn't be left to follow its natural course.
The next big narrative is a year away. So plz STOP parroting V1 as a panacea for all problems.
Focus should be what can be done in Q2 & Q3 to give the market some confidence that can drive price stability and hopefully recovery.
This shouldn’t be ad hoc community member driven initiative
Put a def con team in place; no law needs to be broken.
Here are a few comments about arresting sell-pressure in the short term-
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Kudos to the foundation for the urgency to launch $WPOKT in early Q3, pre V1 (FOR HEAVEN’S SAKE). Should be a life/death project; a 2022 repeat will be fatal.
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PNI buybacks are tiny to move markets but it can be useful as a short-term narrative if “sold & told” effectively. More below.
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Off-chain pre V1 burn is an ambitious & bold project; thanks to the foundations for advancing burn. The ultimate will be POW & closure but the narrative has to be sold starting now. That will also drive accountability.
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Targeting T1 CEXs should be the goal but what if that is taking time?
Don’t dismiss the big and popular local exchanges that offer very decent liquidity. Listing in those exchanges could be relatively easier.
$POKT being a popular token in a local exchange could attract customers from that country/region. Could become a part of marketing & localisation strategy. $POKT leading to new business unlike the conventional way of business leading to token demand- reflexivity as explained above.
5. This is the ongoing SER table-
What stops the foundation/DAO to expedite target daily emissions of 420k from Feb, 24 to June, 23?
No new experiments, simply expediting what is planned already, keeping it constant until the new tokenomics for V1 going live Q1, 24.
Btw Price= Fx (Supply, Demand) doesn’t change when it comes to tokens.
Driving demand of $POKT through revenue is a long game and full of dependencies in externalities.
Tweaking supply is quick and within control.
I have empathy towards community members who rant about supply during these dismal pricing conditions.
6. There were all sorts of assumptions when I did this survey.
The objective wasn’t to start a new proposal based on results but to gauge cursory sentiment. And I am quite comfortable with the sample size given the numbers I have seen in other polls & votes.
My primary takeaway is that the community is probably not aware that a month-on-month reduction in emissions is programmed.
The diehard $POKTO’ opians love debating using facts and details.
But it doesn’t matter whether you know about those details anon, is the market aware? Have you told the story?
Doesn’t appear so- takes to my next point.
7. It will take time to hire and have the new Head of Marketing make any difference.
Hire someone like Coin Desk immediately for the next 3 months at least. All the above actions + MORE require top class distribution for max impact.
I had proposed Coin Desk a few months ago, even shared the media-kit but got immediate pushbacks from community members who have absolutely no clue about marketing.
Messari is not going to serve the purpose I am raising.
8. Utilise the excess 1M the foundation announced in all of the above + providing initial liquidity, basically towards driving price stability and hopefully recovery.
In general-
A) Keep building but make price equally important as everything else. Don’t get stuck in “fundamentals should drive price” mode. Even the top CEOs don’t do that even though they might say it for sound-bytes.
No need to make it a public KPI, keep it internal.
Consult a lawyer specialising in US securities to get the exact instructions, if people are so afraid to even mention price.
-Foundation is Cayman based
-Members (Foundation/DAO) are globally distributed
-US based PNI is just another vendor
-Not listed in the US yet
No US listing could end up being a good tradeoff, should be explored.
Btw this is Kevin Rose, one of the popular faces in US tech space & founder of Moonbirds, reaching out to the community a few days ago when NFT prices tanked.
I am not expecting a community leader to do what Kevin did.
My point is- Don’t quote “oh because of regulations” superficially, get the details from a lawyer who works in the crypto space, when it comes to “talking price” very specific to Pocket Network’s current set up.
B) Consult those who might have hands on public market experience.
Private market experience //- Public Markets
Academics //- Public Markets
C) Get rid of the word “bootstrapping”, this leads to all sorts of excuses and that includes those that impact price. Pocket mainnet was along with Solana’s in 2020, stop treating Pocket as a baby.
And last but not the least-
Embrace price & price action; don’t be this guy-
