Pocket Network’s Shannon Upgrade Rethinks Data Infrastructure for a $390B Open Future

Pocket Network has completed the Shannon network upgrade, marking a pivotal step in its evolution as a decentralized data infrastructure provider. This transition has transformed Pocket from a blockchain-specific relay network into a Cosmos-based, general-purpose coordination layer for open data services. The upgrade introduces a range of enhancements, including permissionless participation, compute-unit pricing pegged to USD, and modular governance through Token Logic Modules (TLMs). These changes aim to create a more sustainable and scalable economic model for $POKT holders while enabling the network to support a broader range of open data services beyond blockchain RPCs, such as AI inference and Web2 APIs.

The Shannon upgrade significantly overhauls Pocket Network’s tokenomics. Unlike the previous inflationary model, which lacked a direct link between usage and cost, the new system introduces a burn-to-pay mechanism where applications and gateways consume $POKT to fund relays. Each data request is priced in compute units (CUs), with 1 billion CUs equaling $1. The POKT-to-CU ratio is dynamically adjusted via a parameter called the Compute Unit to Token Multiplier (CUTTM), ensuring pricing stability even as demand fluctuates. This shift introduces deflationary pressure as the token supply contracts with increased usage, aligning incentives between demand and token supply. Additionally, the introduction of volume-based rebates for high-traffic gateways further enhances network participation and sustainability.

Shannon’s modular governance model, implemented through TLMs, allows the community to govern tokenomics, rewards, and upgrade logic without requiring hard forks. This flexibility enables the network to adapt to evolving market conditions and technological advancements. Governance has also been reactivated, with the DAO now overseeing treasury minting, pricing adjustments, and incentive strategies. These changes reinforce Pocket’s commitment to a decentralized and community-driven model, ensuring long-term adaptability and resilience.

The migration to the Cosmos SDK has also enhanced the network’s architectural robustness, enabling features like Inter-Blockchain Communication (IBC) compatibility and dynamic staking mechanisms. The new chain structure supports on-chain slashing, modular upgrades, and improved interoperability across Cosmos chains. Pocket’s soft launch of the new chain in March 2025 has already resulted in over 4,000 confirmed blocks, with key components such as validators, block explorers, and exchange integrations being actively onboarded. The team is also preparing for future IBC support, which will further expand the token’s utility across the Cosmos ecosystem.

Pocket Network’s strategic partnerships are also accelerating ecosystem growth. A notable collaboration with Kleomedes, a leading staking platform in the Cosmos ecosystem, has introduced Pocket’s decentralized RPC and open data services to 14 Cosmos chains, including Akash, Osmosis, and Elys Network. This partnership strengthens the network’s presence in one of the most active interchain ecosystems, offering Cosmos projects a scalable, censorship-resistant alternative to centralized infrastructure. Through this integration, Kleomedes is operating nodes within the Pocket ecosystem, expanding its reach to developers and end-users across the Cosmos ecosystem.

With the completion of the Shannon upgrade, Pocket Network is positioned to play a critical role in the rapidly growing open data economy. The network’s transition to a Cosmos-based infrastructure, combined with usage-driven economics and modular governance, has set the stage for sustainable growth and broader adoption. As the open data market is projected to reach $390 billion this year, Pocket’s deflationary token model and competitive pricing—averaging $2.50 per million relays—position it as a strong contender in the infrastructure space. The integration of AI inference, decentralized social data, and other emerging use cases further expands the network’s potential, reinforcing its role as a foundational layer for the next generation of decentralized applications.