Original Title: $POD: The Buyback Engine Powering the Dolphin Inference Network
Original Source: Dolphin
Original Compilation: Yuliya, PANews

Editor’s Note: Recently, the AI main storyline in the Base ecosystem has experienced explosive growth, with privacy-first generative AI platforms Venice ($VVV) and its ecosystem projects attracting the most attention. As a core default model of Venice, Dolphin Network and its token $POD performed astonishingly in May, with market capitalization soaring from $12.2 million to $192 million, an increase of over 14 times. This article details Dolphin Network’s unique “Peer-to-Pool” economic model, token value capture mechanism, and innovative design to ensure network security through staking and penalties. Below is a detailed breakdown and analysis of the mechanisms:

Peer-to-Pool (点对池) Economic Model Design

Dolphin Network is designed as a “Peer-to-Pool” system, aiming to reutilize idle GPUs. Each AI model runs on a GPU provided by the network.

This differs from most AI DePIN projects. In other networks, buyers typically rent a node directly from providers, establishing a one-to-one “session.”

· On the supply side, nodes running the same model form a “pool,” jointly handling task requests. The system randomly assigns tasks based on node availability, with no direct contact between requesters and node providers. The only criterion for nodes earning rewards is how many AI inference tasks (i.e., inference tokens) they process, with rewards paid out from the protocol treasury in POD tokens.

· On the demand side, users accessing via API purchase quotas directly from the protocol. Dolphin Network accepts payments in $POD, $ETH, $BTC, $USDC, $XMR , and $ZEC .

All income received by the protocol is 100% used to buy back POD tokens on the market—this directly offsets token issuance.

Buyers and sellers are separate, meaning the POD rewards sent to nodes can be more or less than the POD earned from income.

To illustrate more intuitively, here is a specific case of running the Qwen3.6-35B model on Dolphin Network:

· Current cost to run datagen.dphn.ai: $0.50 per 1 million tokens processed.

· Cheapest comparable competitor on OpenRouter: $1.00 per 1 million tokens.

· Dolphin charges users: $0.70.

· Dolphin pays nodes: $0.50.

· Net buyback funds: $0.20 per 1 million tokens generated.

In other words, Dolphin Network’s pricing is not only 30% lower than the cheapest centralized provider, but also generates a net profit of $0.20 for every 1 million tokens, which is used to buy POD on the market.

Why is this the best application scenario for DePIN?

This model is regarded as a highly promising application direction in the DePIN field, mainly for the following reasons:

· Extremely high AI inference demand: The market’s appetite for AI inference computing power is booming.

· Huge idle computing power pool: The supply of idle gaming GPUs capable of running local AI models is enormous. This network mode feels similar to traditional GPU mining (PoW), but since the output is genuine AI computation with commercial value, the earning potential is much greater.

· Ignoring geographical restrictions: Unlike many DePIN networks, AI inference’s geographical location is not critical, avoiding coverage issues. Due to the high flexibility of AI inference in terms of location, latency of a few hundred milliseconds has minimal impact on user experience. This allows Dolphin Network to connect global consumers and computing resources, greatly enhancing each node’s scalability and utilization.

· Liquidity pooling for computation is essential: It’s the only way to unlock the largest GPU supply group (gamers and PC enthusiasts). It allows nodes to go online or offline at any time, without needing fixed online hours like P2P node renting. Previous GPU DePIN projects required one-to-one binding between consumers and nodes, which is impractical for idle GPUs like gaming PCs or data center GPUs, as owners may want to reclaim their computers at any time. After all, no one wants to rent a GPU that gets reclaimed and causes a sudden disconnection.

Token Mechanism and Value Accumulation

POD is the only valuable asset in the Dolphin ecosystem. All income generated by the network is automatically used to buy back POD on the market. Moreover, Dolphin has no external equity structure based on shareholders and will never introduce one in the future.

For POD holders, staking tokens into the xPOD treasury grants multiple exclusive benefits:

· Direct automatic compound dividends from network buybacks.

· Daily AI inference quota, enabling free use of all models on the network.

· Premium subscription status in Dolphin’s web chat, bots, and other ecosystem applications.

In tokenomics design, Dolphin draws from many excellent DeFi projects, deeply integrating the most suitable parts for distributed AI inference and training networks:

· Inspired by ETH mechanisms: Node operators and validators must deposit collateral; malicious behavior results in direct deduction (penalty).

· Inspired by CRV mechanisms: Provides reward acceleration for node operators. Locking POD can double earnings, and based on other platform deposit yield ratios, 1.5 to 2 times acceleration is highly competitive.

· Inspired by xSUSHI/yCRV mechanisms: Introduces auto-compounding staking vaults. Users don’t need to manually claim rewards, meaning xPOD (staked Dolphin tokens) can be used as collateral for node operators.

· Inspired by stAAVE mechanisms: Sets reasonable cooldown and withdrawal windows to ensure network fund stability.

· Inspired by vlCVX/veCRV mechanisms: Establishes a “bribery market” for daily unused xPOD computing quotas. Users can sell unused quotas for higher staking returns.

Deposit Binding, Penalties for Violations, and Reward Multipliers

In decentralized computing networks, cheating is undoubtedly the biggest threat. If unchecked, node operators might secretly switch to smaller, cut-down, or fake AI models and still earn rewards. This would cause output quality to collapse, buyers to flee, and the entire ecosystem’s flywheel to stall.

To address this, Dolphin Network introduces a “deductible deposit” mechanism, deeply binding node operators’ interests to the value of POD tokens. If malicious cheating is confirmed, nodes will have a deposit equivalent to four weeks of income deducted directly. This makes cheating economically unfeasible.

By default, node operators earn “bound” POD. Once a node accumulates a deposit equivalent to four weeks of income, they can choose at each weekly settlement whether to continue receiving bound POD or to take tradable liquid POD.

Choosing to withdraw liquid POD incurs a 20% fee, which is directly added to the xPOD staking treasury, distributed to other stakers and honest node operators.

Nodes can further deposit xPOD into binding contracts, which not only increases their earnings but also grants qualification to verify other nodes in the network.

The POD reward multiplier determines how much extra a node can earn beyond the basic reward. This mechanism is inspired by Curve Finance’s LP acceleration but has been specifically adapted for decentralized AI networks, adding features like usage-based rewards, unified deposit calculations, and violation penalties.

In simple terms:

· Nodes earn basic rewards by completing AI computations, validation tasks, and protocol duties.

· The system multiplies node rewards based on the amount of tokens bound in the account and the profit ratio.

· When calculating profit ratio, the system considers the average of the past few weeks’ basic rewards, using a “fast-up, slow-down” smoothing algorithm: as your workload increases, your average reward metric rises quickly; when idle, it decreases slowly.

· If your account maintains a deposit exceeding 3 months of earnings and has at least 50,000 POD active, you qualify as a validator.

· Binding a deposit equivalent to 6 months (26 weeks) of earnings guarantees at least a 1.5x reward multiplier.

· Exceeding 6 months’ worth of earnings can push the reward multiplier up to 2x. The exact amount depends on your relative share compared to other over-binders and how much you exceed the 6-month target.

All calculations are based solely on POD quantity, with no fiat price oracle involved. Deposits are calculated per account (wallet), and the resulting reward multiplier applies to all nodes under that account. Increasing nodes increases total earnings, so active deposits must be proportionally increased to maintain the same reward multiple.

Finally, Dolphin Network will release tomorrow a paper titled “Encrypted Live-Weight Proofs for Decentralized Inference,” detailing a lightweight verification system capable of validating whether nodes on various hardware are running correct models, surpassing standard TEE verification limited to enterprise NVIDIA GPUs.

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