Economics & Game Theory
Pons Network is designed so that operators competing for profit naturally creates the best user experience. This page explains how.
The Core Insight
Traditional bridges have a problem: who pays for gas on the destination chain? Who executes the user's action?
Pons solves this with economic incentives:
- Users offer fees for indexing and execution
- Operators compete to claim those fees
- Competition drives speed and reliability
- Everyone wins
The Race to Index
What Happens
When a user initiates a cross-chain transfer:
- Message is broadcast to the network
- Multiple indexers see it simultaneously
- Each indexer races to submit the proof first
- First valid submission wins the indexer fee
- Losers get nothing (but spent gas trying)
Why This Works
For Users
Multiple operators racing means your transaction gets processed as fast as possible.
No single operator bottleneck.
For Operators
Higher fees attract more competition. Operators invest in infrastructure to win more races.
Better infrastructure = faster service = more win.
The Nash Equilibrium
Operators face a classic game theory scenario:
| Operator Strategy | Outcome |
|---|---|
| Slow/unreliable | Loses races, earns nothing |
| Fast but expensive | Wins races but low profit margin |
| Optimally fast | Wins enough races to be profitable |
The equilibrium: Operators invest in speed up to the point where marginal cost equals marginal revenue.
Result? Users get fast execution at market-rate prices.
The Race to Resolve
What Happens
After indexing completes:
- Assets arrive at user's Smart Account along with the signed action data
- Multiple resolvers see the pending action and what the user wants to do
- Each resolver evaluates profitability
- Resolvers race to execute first
- First valid execution wins the resolver fee
Profitability Calculation
Resolvers are rational actors. They only execute if:
Resolver Fee > Gas Cost + Opportunity Cost + Risk Premium
Resolver Economics
- RevenueResolver fee set by user
- Gas CostExecution gas on destination chain
- Opportunity CostCapital tied up in pending transactions
- Risk PremiumBuffer for failed transactions
Why Users Get Great Service
Users control their experience. Pay more = faster. Pay less = slower but cheaper.
Dynamic Fee Market
How It Works
Pons uses a dynamic fee market similar to Ethereum gas:
| Market Condition | Effect |
|---|---|
| High demand, few operators | Fees rise, attracts more operators |
| Low demand, many operators | Fees fall, less profitable operators exit |
| Equilibrium | Fees stabilize at efficient level |
Price Discovery
Unlike fixed-fee bridges, Pons lets the market discover fair prices:
Benefits
Efficiency
No middleman setting prices. Market finds optimal rate automatically.
Flexibility
Users choose speed vs. cost tradeoff.
Urgent? Pay more.
Patient? Pay less.
Resilience
If one operator fails, others fill the gap.
Higher fees attract replacement capacity.
Incentive Alignment
Operators
| Behavior | Incentive |
|---|---|
| Stay online 24/7 | More opportunities to earn |
| Invest in fast infrastructure | Win more races |
| Process transactions honestly | Earn fees, build reputation |
| Attempt exploitation | Transaction reverts, lose gas, earn nothing |
Users
| Behavior | Outcome |
|---|---|
| Set reasonable fees | Fast, reliable execution |
| Set fees too low | Slower execution or no takers |
| Set fees too high | Instant execution, overpaying |
Developers (dApps)
| Behavior | Outcome |
|---|---|
| Integrate Pons | Users get simple cross-chain UX |
| Show fee options | Users can choose speed vs. cost |
| Monitor status | Can show progress to users |
Why dApp Developers Benefit
Best UX = More Users
Best DevX = Faster Development = Grow Faster
Without Pons
- Build bridge integration
- Handle gas tokens
- Manage network switching
- Track multi-step flows
- Handle failures at each step
With Pons
- Install SDK
- Build your action
- Call execute()
- Done
Network Effects
More Users → More Operators
More Operators → Better Service
| Number of Operators | Effect |
|---|---|
| Few | Some competition, moderate speed |
| Many | Intense competition, fast speed |
| Very many | Maximum speed, lowest viable fees |
Long-term Sustainability
Why Operators Keep Operating
- Consistent income: Each transaction pays fees
- Low overhead: Software runs automatically
- Scalable: Same infrastructure handles more volume
- Compounding: Better operators win more, invest more, win more
Why the Network Stays Healthy
Self-Balancing System
- If fees too lowOperators leave, remaining earn more, equilibrium restores
- If fees too highOperators join, competition lowers fees, equilibrium restores
- If demand spikesFees rise temporarily, attracting capacity
- If operator failsOthers claim their transactions, no disruption
Summary
Pons Network turns self-interested competition into collective benefit:
| Stakeholder | Motivation | Behavior | Result |
|---|---|---|---|
| Indexers | Earn fees | Race to be first | Fast relaying |
| Resolvers | Earn fees | Race to execute | Fast execution |
| Users | Save time/effort | Set appropriate fees | Get matched service |
| Developers | User retention | Integrate Pons | Simple cross-chain UX |
The game theory is simple: everyone acting in their own interest creates the best possible outcome for everyone.
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