Commonly portrayed as the airbnb of the cloud sector, Akash network is a new type of decentralised cloud computing marketplace breaking away from the legacy datacenter model to offer a cost-efficient alternative undercutting centralised vendors prices by more than 80%. Initially built to democratise the access to cloud resources, Akash is also solving key scalability pain-points faced by centralised competitors through the leveraging of the blockchain technology granting users price competitive access to unused computing resources sitting idle in datacenter and edge devices located all around the globe.
Why using Akash?
- Cost Efficiency — Offers cloud services at up to 85% lower prices than traditional providers, making it accessible for various users.
- Decentralization — Eliminates reliance on centralized systems, enhancing security and reducing vulnerabilities associated with data storage.
- Global Accessibility — Utilizes underutilized cloud capacity from millions of data centers worldwide, ensuring resources are available regardless of location.
- Flexible Deployment — Facilitates quick and easy application deployment, allowing developers to manage workloads without complex setups.
Akash architecture
Network design
Naturally, offering more modularity than mainstream cloud vendors, Akash overall network design can generally be understood as revolving around four main core layers.
Blockchain Layer
While the off-chain peer to peer Akash compute network composed of idle servers handles the actual compute workloads from clients, the blockchain layer built with the help of the Cosmos SDK, is leveraging the Tendermint BFT algorithm to provide the security and incentive structure required for the deployment of a decentralised cloud marketplace. As such, beyond its role in the protocol consensus engine, this layer is also managing a number of other key networking components ranging from protocol governance to the upkeep of the distributed ledger recording all marktplace activities.
Application Layer
Handling resources allocation and lifecycle of applications deployed atop the Akash network, the application layer leveraged both by clients and providers is designed around four components:
- Deployment module — Natively integrated with the Docker technology and various containers orchestrations tools (Kubernetes, Docker swap) to enable users to easily format their deployment requirements into Docker image and support providers with a complete toolkit for servicing clients workloads.
- Order module — Automatically generating marketplace orders on behalf of users
- Reverse auction mechanism — Ensuring reliant and transparent price discovery
- Leases — Establishing a Digital Service Level agreement between clients and providers.
Provider Layer
Mostly composed by datacenter, cloud providers and individual server operators willing to monetise their idle compute resources, the provider layer integrates a built-in software daemon enabling participants to interact with the Akash marketplace in a trustless and decentralised fashion.
User Layer
Helping users in deploying and managing applications or micro-services atop Akash marketplace, this user-facing layer leverages a multitude of toolings and interfaces such as the Cloudmos dashboard providing a user-friendly GUI for deployment and resources management or the Akash CLI offering a command line interface to directly interact with the Akash network and create, deploy and monitor running applications.
Network roles
Regarding network roles, Akash relies on three main types of active participants ensuring altogether the security and sound development of the protocol both from a technical and usability aspect.
Validators
Responsible for the core protocol security and integrity, Validator nodes facilitate network interactions through the handling of the following missions:
- Block creation — New block proposition and active participation in the network consensus algorithm.
- Blockchain synchronisation — Network history upkeep and implementation of the Tendermint consensus algorithm.
- Transaction validation — Transactions validity check prior to addition into the mempool for peer propagation
- Protocol governance — Voting rights granted by $AKT collateral requirements
Providers
Active network participants running the Akash daemon to submit bids, offer computing resources and interact with clients, providers ensure the following responsibilities:
- Resource & Lease management — Ensure efficient servicing of users workload (GPU, bandwidth, …)
- Deployment management — Secure and efficient handling of client workloads ensuring isolation from other deployments
- Network monitoring — Reporting of key usage metrics to users (resource utilisation, billing information, …)
- Price discovery — Participation into Akash reverse auction bidding process
While all interactions and payments occur on-chain, it is important to bear in mind that the actual running of client workloads are being processed off-chain on Akash peer to peer compute network.
Remote Procedure Call (RPC) node
Computing server maintaining an indexed view of Akash blockchain and leveraging the Application Blockchain Interface (ABI) to enable external applications and users to query network informations such as account balances, transaction history or block data.
Note: RCP nodes don’t take part into the block creation or governance process of Akash and as such are not submitted to any collateral requirements.
Network features
Benefitting from a sizeable first mover advantage as one of the first decentralised cloud compute, Akash developed a large suite of technical and users features setting apart from other alternative Web3 cloud computing solutions.
Stack Definition Language (SDL)
Simple and human friendly data standard enabling customers to easily define their deployment requirements and pricing parameters in a formatted deployment file compatible with the YAML standard.
Deployment Shell access
Enables Akash users to benefit from a large panel of deployment capabilities such as the ability to execute commands within running Akash deployment.
Authorised spend
Available solely for deployment activities, Akash’s authorised spend feature enable users to grant a specific source wallet with spending rights on a set of tokens for predetermined destination wallet allowing development teams to not rely on low-security shared wallet prone to incidents.
Audited attributes
Developed to enable users to deploy application on a more selective basis, audited attributes validated by independent third-party auditors allow a more fine-grained criteria-based filtering of available providers.
Akash Marketplace
Decentralised compute marketplace storing on-chain all records of users’ requests, bids, leases and settlement payments generated throughout time. Under the hood, Akash marketplace is relying on SDL deployment scripts specifying clients requirements while making use of the docker technology to ensure agnostic servicing of clients workloads through various hardware set-ups.
IP Lease
Offers clients the option to reserve a static public routable IP addresses for their lease deployment. Hence, beyond pure ML training, users can also leverage Akash marketplace to build a vast array of other public-facing platforms.
Feature limitations:
- Automatic loss of IP address upon lease closure
- Feature only available for inbound communications
- Feature only available with MetalLB providers
Persistent storage
Closely mimicking typical container, the persistent storage feature allows the deployment of persistent data throughout the lifetime of a lease thanks to the creation of a dedicated disk volume directly into the deployment.
Feature limitations:
- Permanent storage losst upon migration to a new provider or lease closure.
- Shared volume not supported and currently preventing the use of the same storage volume by multiple services launched on Akash.
- Impossible to mount multiple persistent volumes in a service.
Ecosystem
Network state
Benefiting from the increasing demand induced by the latest development in generative AI, Akash registered an impressive 90% YoY increase in terms of active deployments further supported by the recent thumper.AI partnership proving the ability of the network ability to sustain the development of foundation models.
However, the recent fluctuations in active providers mirroring the $AKT price movement highlights the persistent challenges induced by the $AKT volatility on the ecosystem despite the recent introduction of a new stable payment feature.
Additionally, as shown by the rapid increase in CPU capacity significantly outpacing the market demand, the protocol appears to still be in its early stage of adoption and mostly focus on supply side incentivisation. As such, it will be interesting to see if over the next 12 to 18 months the protocol operate a similar pivot than Filecoin and shift its focus towards network usage through novel incentivisation programs similar to Filecoin Plus.
Ecosystem state
Over the past few months, Akash registered an overall decrease both in terms of network transactions and active accounts highlighting the current challenges faced by the network to boost network usage.
Diving a bit deeper, it appears that Akash also showcases a continuous decline in network activity for accounts older than 30 days underlining the increasing difficulties met by the network to ensure user retention.
Nonetheless, regarding its overall chain value, the protcol experienced a pretty sharp recovery over the past few month hinting at a sizeable market support from investors willing to bet on the Web3 AI narrative through Akash despite its current usage shortcomings.
Latest technical development
Filecoin recently deployed several mainnet upgrades aiming to ease the access to high-end chips:
- Mainnet 7 — Network configuration upgrade unlocking increased deployment sizes and allowing to coordinate resource-intensive workloads to train AI models on distributed compute.
- Mainnet 8 — Network upgrade allowing developers to come to the network with a budget in mind and secure access to GPUs faster than before, eliminating the back-and-forth associated with bidding.
- Mainnet 9 — Network update implementing a minor change to ensure properly validated bids on multi-service deployments.
Ongoing implementation state of AKT 2.0 tokenomic model:
- Take and Make fees [Live]
- Stable Payment and Settlement [Live]
- Incentive Distribution Pool [Under development]
- Provider subsidies [Under development]
- Public Goods Fund [Under development]
Recent developments
Thumper.AI partnership demonstrating the Akash network potential in Large Language Model training.
- Solve.Care partnership aiming at the deployment of a new trustless digital health network.
- Collaboration with Passage allowing a 50% server hosting cost reduction
- Partnership with Bred.dev recently acquired by Nvidia to support access to a wider range of GPU models through the Akash marketplace.
- Integration with Flock.io to unlock affordable access to state-of-the-art GPUs
Ecosystem support
Tokenomics
General metrics [20/07/24]
Tokenomic design
From a core tokenomic standpoint, Akash leverages the general Cosmos token design and handle through $AKT the three following tokenomic primitives:
- Commodity — $AKT provide a built-in mechanism to store and exchange value while acting as a reserve currency for the overall network ecosystem.
- Security — Through its staking, $AKT enables the development of various value-based security mechanisms
- Governance — $AKT enables any token holders to take part into the protocol governance.
Akash pricing model
Regarding its pricing model, Akash relies on a reverse auction process where tenants set their requirements and terms before letting providers bid on the Akash marketplace in an auction process awarding the lease to the provider with the cheaper offer. As such, leveraging natural free market dynamics, Akash offers access to unused cloud compute at the most affordable price available on the market.
AKT 2.0 Tokenomic model
Although the original tokenomic version was sufficient to kickstart the initial launch of the protocol and bootstrap significant user adoption, significant challenges hindering the development of the ecosystem quickly calling for a deep rethinking of Akash’ economical model.
Main AKT 1.0 limitations:
- High $AKT price volatility inducing significant service price fluctuations over the lifecycle of a lease leaving either the tenant or the provider at a loss
- Early market profit problematic with a growing demand not yet sufficient to incentivise providers to commit large amounts of compute needed for further network adoption.
- Community fund too small to viably subsidise the initial growth of the Akash network.
- Lack of value accrual mechanism beyond network security incentives.
AKT 2.0 model
Developed as a solution to the shortcomings of the original tokenomic model previously highlighted, the new AKT 2.0 model currently being rolled out introduces five new main primitives set to ensure the long term scalability and sustainability of the network.
Stable Payment with multi-currency support [Live on Mainnet]
Multi-token settlement mechanism enabling purchase of unused cloud computing power on the Akash marketplace via a list of whitelisted tokens and stablecoins to ensure a better price stability. For now, the whitelisted is only comprise of $USDC but will expand further in parallel of the continued roll-out of the KAT 2.0 model.
Take Fee [Live on Mainnet]
Redirected towards the network security budget and applied on top of the price of all newly created leases, this new take fee enables to directly align Akash security with the overall network activity. In terms of costs, the current take fee on the Akash is set at 4% for $AKT payments and 20% for $USDC stable payments.
Maker Fee [Live on Mainnet]
Similar to the above take fee, the maker fee enforces the payment of a network fee by providers when adding liquidity onto the protocol marketplace and align Akash security with the overall liquidity supply. Currently set at 0.002AKT, this newly introduced fee is governed by the community and might be subject to further change in the future
Incentive distribution Pool [In development]
Founded by the take and make fee described above, the incentive distribution pool contains a basket of whitelisted currencies redistributed to the network participants as network incentives for their active contribution to the network. Technically, this pool holdings will be redistributed as shown on the graph below, each allocation being yet to be determined by future on-chain governance community decisions.
Provider subsidies [In development]
Set of network incentive programs, still under considerations, aimed at ensuring the bootstrapping of the network available computing power and allow more attractive price for tenants in the mid/long term.
Note: Among the current initiatives actively discussed among the community are temporary operational cost covering programs for providers as well as network incentives based on the amount of workload hosted similarly to the Filecoin Plus program.
Public Goods fund [In development]
Community-led grant fund redistributing a portion of the Incentive distribution pool through network grants allocating to active development teams actively taking part in the development of the Akash ecosystem.
Value Accrual mechanisms
Despite an initial cryptoeconomic model presenting numerous limitations and an unfinished rolling out of its new AKT 2.0 model , Akash is still already showcasing a sizeable number of value accrual mechanims for token holders among which :
- Usage fees — By mainly encouraging users to pay for computing resources in $AKT, the protocol creates a virtuous cycle between increased network usage and $AKT price appreciation.
- Provider collateral — Sizeable collateral requirement generating lasting supply shocks on the overall token circulating supply and a resulting temporary price increase of $AKT.
- Deployment deposits — Small temporary deflationary shocks on the $AKT circulating supply resulting in added support of the Akash native token price.
- Staking — Native staking mechanism providing token holders with an interesting value accrual mechanism enabling the collection of additional yield in counterpart of a passive support of the network security.
- Governance — Increasing value of the governance voting rights granted to token holders as the network expand towards mainstream adoption.
Team
Greg Osuri — CEO
Co-founder and PDG of the Akash network with an extensive experience in cloud computing both as a developer of renowned open-source decentralized protocols and as the funder and advisors of numerous tech startups and community endeavors such as AngelHack or Firebase acquired by Google back in 2014.
LinkedIn: https://www.linkedin.com/in/gosuri/
Adam Bozanich — CTO
Co-founder and CTO of the Akash network with a strong technological background and years of experience both as a developer and director of software development at top-tier software companies such as Symantec or Marketron.
LinkedIn: https://www.linkedin.com/in/abozanich/
Boz Menzalji — COO
COO of the Akash network with a strong commercial and marketing background thanks to its lengthy experience in C-level positions at numerous SaaS startups ranging over a large span of market sectors (gaming, fintech, …).
LinkedIn: https://www.linkedin.com/in/bmenzalji/
Artur Troian — Senior Software Engineer
Senior software engineer of the Akash network with an extensive background in engineering and software architecture development and a prior managerial experience as the co-founder and CTO of NotifAI, an AI powered enterprise asset protection solution.
LinkedIn: https://www.linkedin.com/in/atroian/
Governance
Built atop the Cosmos SDK as an application-specific chain, Akash is naturally leveraging the general on-chain community Cosmos governance design revolving around three main pillars:
- On-chain proposal submission — Proposal are submitted to the blockchain with a deposit
- On-chain voting — Upon sufficient token backing, proposals get submitted to community vote over a pre-determined time period.
- Execution — Upon approval of the community, proposal get executed and integrated inside the protocol ecosystem
Note: For additional details regarding the Akash governance Proposal’s best practices see here: https://github.com/orgs/akash-network/discussions/170
Akash Validator Program framework
Over Q1 ’22, Akash implemented a validator program framework aimed at addressing several governance issued induced by the template Cosmos SDK. Generally speaking, this custom framework developed by the Akash community focus on the following areas:
- Visibility — Akash validator must maintain visibility across the Akash ecosystem.
- Qualitative engagement — Validators should engage the community in a qualitative manner beyond social media soundbites.
- Governance and Participation — Validators must participate in governance proposal at least 70% of the time.
- Leadership by example — Validators should deploy all or part of their infrastructure on decentralized Web3 platforms.
Roadmap
There is no official roadmap per se due to the community-driven architecture of the Akash governance, nonetheless all projects currently being implemented as well as all proposals waiting for implementation can be found here.
Finally, regarding past developments and integrations, there are to date no red flags to signal.
Closing Thoughts
In summary, the Akash Network stands out as a pioneering force in the decentralized cloud computing landscape. Its innovative approach to resource allocation, combined with a robust technological foundation and a strong community backing, positions it well for future growth. Indeed, as the demand for flexible, cost-effective cloud solutions continues to rise, Akash’s marketplace will likely gain further traction, making AKT an asset worth monitoring for those interested in the intersection of blockchain technology and cloud computing.
Disclaimer
The information provided in this analysis regarding the Akash Network, its technology, market performance, and future outlook is intended for informational and educational purposes only. It does not constitute financial, investment, or trading advice.
