Akash sits at the intersection of a few narratives, including interest in Cosmos chains, AI, and DePIN…
In this edition, we’ll go over what exactly Akash is, some of its new initiatives, the role $AKT plays, and more. We’ll also go over some other protocols in the decentralized computing space and how they compare.
Keep your guard up in the markets ⬇
Background on Akash Network
Akash is an open network for buying and selling cloud resources using the native token, $AKT. It primarily connects people looking to sell excess CPU/GPU power with people looking to buy CPU/GPU power. People can lease cloud computing resources in a more decentralized way, with less hurdles than what exists when going down the traditional cloud comput route with service like AWS and Microsoft Azure.
The protocol functions as a layer-1 blockchain built with the Cosmos SDK, with some attractive attributes including its independence and security maintained by active validator leaders. It aims to be the first ‘Supercloud’ to provide permissionless access to cloud resources. The protocol started off as a decentralized CPU marketplace, but has since expanded to include other offerings like GPUs and even dedicated IP renting.
The $AKT token is notably up over 800% this past year (currently $2.53), though still down ~68% from its ATHs ($8.07).
Each $AKT grants one vote in the blockchain, making it essential for the network's functionality. The blockchain is fueled by tokens emitted at every block. Akash has a fixed token supply of ~389 million, following the initial release of 100 million tokens. The circulating supply currently sits at around ~226M tokens.
Many providers are staking their tokens to obtain attractive rewards, which also helps to further decentralize the network as the stake is diversified. $AKT serves a very important role as both an important piece of governance, which is prevalent on the network, as well as incentivization for cloud providers.
The Case for Decentralized Computing
This is a theme reflected across numerous decentralized cloud and DePIN projects. We recently covered Hivemapper, a project aiming to build more affordable digital mapping technology to rival Google Maps, Apple Maps, etc. Like Akash, the protocol aim to disrupt existing providers by giving smaller businesses a more accommodating alternative to the existing monopolistic, all-or-nothing-esque pricing that can be a barrier. Decentralized protocols can use tokens to incentivize and crowdsource the acquisition of in-demand resources or data, and then monetize these resources.
Increased Interest in Akash Continuing into 2024
Decentralized computing protocols like Akash aim to disrupt a massive and extremely important industry. Most notably, this industry is still growing with demand for these services increasing at a rapid pace. AWS, Microsoft Azure, and Google Cloud take up ~65% of the market
Akash’s Forray into GPUs
Last year, amidst AI hype and increased attention around projects like Render, Akash announced their entry into GPU services. The protocol launched a testnet and subsequentially, their mainnet.
The team has specific strategies in mind for incentivizing providers of GPUs including H100 and A100 GPUs by Nvidia. Akash aims to create pools with specific characteristics for hardware configurations and distribute tokens to these pools, initially offering high rewards to attract providers. This would be similar to the original distribution of $AKT, where initial providers, especially those using their own hardware, received outsized rewards.
There is $400M+ in Akash onchain incentives reserved to reward behavior from users There is also a pilot launch proposal by Akash entailing $5M (denominated in AKT) for this GPU incentivizes strategy. The team estimates that this proposal would bring in an additional 1,000 A100 GPUs, which could be used at a rate of $0.79/hr. High-density GPUs like the A100 apparently fetch a high utilization rate on Akash, at 95%+.
General GPU utilization for Akash since the program’s inception last year
Pilot proposals last 90 days so that the team can observe user behavior and adapt the program as necessary. There are over 280 proposals that have been made for the Akash Network, making governance a significant endeavor. In addition, 90% of contributions made to the Akash network have come from outside of the actual organization, highlighting the open-source and receptive nature of the protocol.
Transparency and openness are prioritized; all meetings and product developments are publicly available and summarized on GitHub. This approach enables anyone to catch up on developments and participate in community discussions.
Akash ML
Amidst a boom in AI there is renewed interest in Akash from large Machine Learning (ML) companies, especially for Akash’s A100 GPUs. GPU shortages and tax incentives are also factors that affected inflows and interest.
In fact, this interest prompted the creation of Akash ML, a suite of services that were designed to facilitate Akash’s adoption with features like credit card payments for ML services.
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Other Decentralized Computing Plays
ICP (Internet Computer Blockchain) is a general-purpose blockchain aiming to replace traditional IT and cloud infrastructure, enabling Web3 dApps to run completely on-chain.
ICP hosts a wide range of projects tackling multiple verticals, from DeFi to NFTs, Games, Metaverse, and even Social Media.
ICP aims to eliminate reliance on third-party cloud hosting services by providing smart contracts that can handle HTTP requests themselves.
ICP reduces costs and potential problems for developers, as a result of keeping everything on-chain.
Filecoin is an open-source, decentralized network providing cloud storage.
Filecoin provides a peer-to-peer cloud storage marketplace, a similar concept to Render but for secure cloud storage instead of GPU rendering.
Filecoin is a relatively popular decentralized computing platform, originating in 2014.
The native token, $FIL is currently a top 50 coin, with a market cap of $2.5B.
ShdwDrive was introduced by blockchain service provider GenesysGo. It aims to provide decentralized storage services to rival that of Filecoin & others.
The protocol also aims to be a DA (Data Availability) layer similar to Celestia, EigenLayer.
The protocol is currently undergoing an incentivized testnet rewarding node runners, stakers, and token holders with additional $SHDW.
The protocol may be relevant as it reportedly submitted applications to 5 CEXs last week for token listing.
$SHDW remains a favorite for some on Solana as it holds a significant valuation (~$180M) and has several DeFi applications on the Solana network.`
Render Network enables an open market for idle GPU power, akin to an Airbnb but for GPUs.
Render has been associated with the AI narrative, as AI may drive up demand for graphics creation which is GPU-intensive.
While stocks like NVDA and AMD exist in the publicly traded markets, crypto didn’t have a clear way to bet on chip makers and companies that may benefit from a surge in video and content creation demand.
Render ($RNDR) consistently battles with Bittensor ($TAO) for the #1 AI token spot.
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