Learn about Akash Network in one article: The underestimated leader in the decentralized GPU computing power rental market

At the close of the U.S. stock market on May 22, Nvidia released its impressive first quarter financial report for fiscal year 2025. Total revenue increased by 262% year-on-year to US$26 billion, and net profit soared by 620% to US$14.88 billion, both of which set a record high and far exceeded market expectations.

 

Driven by this good news, Nvidia's stock price rose by more than 7% after the market, breaking through the $1,000 mark in one fell swoop, and also led to a number of AI concept stocks such as Arm Holdings, AMD, and TSMC ADR to rise after the market.

 

Some people made a graphic to point out that the shaky and dangerous building of the U.S. stock market is now entirely supported by Nvidia.

 

 

In fact, it is not only the US stock market that has benefited. The crypto industry has also set off a new wave of AI narratives because of Nvidia's amazing performance. The Dune panel produced by researcher Crypto Koryo shows that AI has become the most popular and bullish top narrative in recent times.

 

 

According to an AI ecosystem map recently released by DWF Ventures, crypto AI projects can be divided into two areas: "AI infrastructure and resources" and "AI applications".

 

 

AI infrastructure and resources

 

Middleware and tools, represented by projects such as Ora Protocol, Fetch.ai, and Ritual.

 

Computing resources, represented by projects such as Akash, Render Network, Aethir, and gensyn.

 

Models and data, represented by projects such as BitTensor, Grass, and Singularity Net.

 

AI applications

 

LLM and chatbots, representative projects such as enqAI and Sleepless AI.

 

AI agents, representative projects such as Autonolas and Morpheus.

 

AIGC, representative projects such as NFPrompt and PAAL AI.

 

DeFi, representative projects such as ARC and Mettalex.

 

Analysis, representative projects such as Arkham and Kaito.

 

Among these many projects, the business logic of computing resources is the easiest to understand and has the most room for growth. All projects are doing the same thing - aggregating GPU computing power for leasing. At present, the development of AI applications is still unclear, and no one knows whether there is a real demand. But no matter who wants to do AI, they can't lack computing resources. Computing power is the new oil in the AI era. To put it bluntly, these projects want to become the "Nvidia of the cryptocurrency world." Because the story is easy to understand, the competition in this field is particularly fierce. Projects like Aethir and gensyn appeared this year, and have not yet released tokens or launched the main network. Although the current discussion is very hot, the performance after the issuance of coins and the launch is still to be tested by the market.

 

But the real value is often hidden in those neglected corners. There is a project that has been continuously built since 4 years ago. It has not received enough attention in the Chinese market. After experiencing bull and bear markets, it was eliminated early when the east wind of "GPU leasing" just emerged. After the product was recognized by the market, not only did the price of the coin soar five or six times in just a few months, but it was also listed on Coinbase, the largest crypto trading platform in the United States, in March this year. Then it was launched on Upbit, the largest trading platform in South Korea in April. This project is Akash Network (AKT).

 

 

The development of Akash

 

Akash was launched in March 2018 by Overclock Labs, a software development company founded by Greg Osuri and Adam Bozanich. Although Overclock Labs initially focused on building a traditional multi-cloud deployment platform, it eventually decided to launch a decentralized cloud computing platform. Any individual or organization with excess computing power can access the Akash network as a provider and rent out its CPU, GPU, storage, memory and other computing resources. Developers can flexibly choose server resources with different configurations and quotations according to their own needs for deploying applications, training AI models, etc. Through the network's native incentive mechanism and smart contracts, the two parties to the transaction can reach an agreement and automatically perform the contract without trust, realizing efficient configuration of computing resources.

 

In September 2020, Akash Mainnet 1 was officially released as a minimum viable product (MVP), allowing users to stake AKT tokens for rewards. After several months of testnet challenges, Akash ushered in the Mainnet 2 upgrade in March 2021 to officially launch the on-chain auction system, allowing providers and developers to trade cloud resources on the chain. Subsequently, in 2022, Akash completed 3 more mainnet upgrades, and continued to launch more features such as persistent storage services and IP leasing, but unfortunately, there was no noise about product updates, and Akash's coin price remained sluggish, just like other projects during the bear market.

 

Until the end of August 2023, Akash completed the milestone Mainnet 6 upgrade. This upgrade brought long-awaited GPU support to Akash Supercloud, and also introduced stable payments (Stable Payments) and network rate (Take Rates) mechanisms.

 

GPU Market:Super Cloud opens the GPU resource trading market to global deployers. The first phase focuses on supporting NVIDIA series GPUs, and will be expanded to other brands such as AMD in the future. The test network has successfully carried high-end GPUs such as NVIDIA H100 and A100, and also supports models for ordinary users such as 3070.

 

Stable Payment:As an important part of the AKT 2.0 plan, the stable payment mechanism allows the use of USDC stablecoins as settlement currency to reduce the impact of exchange rate fluctuations on long-term service providers and users. More stable payment options can be added through governance voting in the future.

 

Network Fee:Mainnet 6 introduced the Take Rate mechanism for network value capture and incentive participants. The network will extract a certain percentage of fees from each transaction, with an initial rate of 4% for AKT and 20% for USDC (which can be adjusted through community governance voting in the future).

 

Mainnet 6 marks Akash’s official entry into the AI computing market. Akash subsequently completed the upgrade of Mainnet 7-9, introducing more features around GPU resource orchestration and AI developer experience optimization. These have brought new user growth to Akash. Messari data shows that the average daily revenue of the Akash network increased by more than 150% within one month after the launch of the GPU rental market.

 

 

The price of Akash's native token has also soared, and after listing on Coinbase in March this year, it exceeded $6, just one step away from its historical high.

 

 

Akash's unique advantages

 

Multi-layer technical architecture

 

Akash adopts a layered architecture design, which mainly includes three levels: deployment, consensus and market:

 

 

Deployment layer

 

In order to achieve consistent deployment under different hardware and operating system environments, Akash adopts the industry-leading containerization technology. Docker and Kubernetes are two core components in the Akash technology stack.

 

Docker can package applications and their dependencies into a standardized container image. Containers run in the user space of the host operating system and are isolated from other processes, ensuring the independence and portability of applications. By defining a unified container specification, Akash runs user containers on the provider's server without having to worry about the underlying hardware environment. Docker images can be easily transmitted and deployed in the network, greatly reducing the threshold for application delivery.

 

Kubernetes provides large-scale container orchestration and management capabilities. Distributed applications often need to coordinate multiple containers to run in order on different hosts. Kubernetes uses declarative configuration to achieve automatic discovery, load balancing, fault recovery, rolling upgrades, etc. of services. In Akash, a deployment is the smallest scheduling unit, similar to a Pod in Kubernetes. Each deployment can contain one or more containers. Akash is responsible for creating and maintaining container groups in the provider cluster according to the deployment description file.

 

Consensus layer

 

Akash Network is a PoS public chain built on the Cosmos SDK. As one of the core projects in the Cosmos ecosystem, Akash makes full use of the cross-chain interoperability protocol IBC to achieve seamless asset and message delivery with other chains in Cosmos. At the same time, Akash also supports composability development based on CosmWasm smart contracts.

 

Under Akash's PoS consensus mechanism, AKT holders participate in validator elections by staking tokens. Validator nodes are responsible for packaging transactions on the chain and obtaining block rewards. The network runs at a speed of one block in 6 seconds, and the confirmation time for a single transaction is about 10 seconds. The performance is close to that of the traditional Web2 system. Due to the use of the Tendermint BFT consensus algorithm, Akash's security and fault tolerance are much better than the PoW public chain. Even if a single verification node is offline, it will not affect the overall activity and transaction confirmation of the network.

 

The transaction processing process is as follows:

 

1. The provider publishes the server hardware specifications and quotation information on the chain.

 

2. The tenant submits a deployment request through the client and initiates a leasing transaction on the chain.

 

3. Multiple providers provide quotations based on the request parameters, and the tenant selects the best quotation.

 

4. The tenant pledges a certain amount of AKT as a deposit, and the two parties reach a lease agreement.

 

5. The provider provides computing resources, and the tenant deploys the application through remote tools.

 

6. The smart contract deducts the rent from the deposit according to the length of use until the end of the lease.

 

The entire process is completely controlled by code, without manual intervention, which maximizes transaction efficiency and reduces costs. The lease agreement adopts a flexible SLA mechanism, allowing tenants to object to services that do not meet the standards, and the provider's service quality score will affect its subsequent quotation ranking.

 

Market layer

 

Traditional cloud service providers have a strong dominant position in external quotations, and users can often only passively accept them. Akash Network adopts a more market-oriented pricing mechanism-reverse auction.

 

In Akash's deployment request, users can directly declare their ideal price range. After receiving the request, the network will invite providers who meet the hardware conditions to bid. Providers will independently give a competitive price based on their own server utilization, unit cost, profit margin and other factors. The system will eventually select the most cost-effective bid, and the winning provider will receive the service contract.

 

At the same time, providers can also set dynamic discount coefficients to further reduce their bids to attract more users. For example, when resource utilization is low, the discount will be increased, and when demand peaks, the price will be slightly increased, thereby achieving dynamic optimization of revenue.

 

For users, reverse bidding avoids the monopoly of the only bid and is conducive to obtaining more affordable prices. A cost comparison of mainstream cloud service providers shows that under the same configuration, the average price of Akash can be 50-85% lower. Especially for small and medium-sized enterprises and developers who are more sensitive to price, Akash has undoubtedly greatly lowered the threshold for use and made high-performance computing more popular.

 

From the perspective of market competition, Akash's reverse auction mechanism has something in common with the traditional Internet's sharing economy platform. The optimal resource allocation is generated through the spontaneous supply and demand matching of the market. As the scale of the network continues to expand, the efficiency advantage of this mechanism will be further highlighted.

 

Both supply and demand are strong

 

Hash power supply: Reusing Ethereum miner resources

 

In September 2022, Ethereum switched from proof of work (PoW) to proof of stake (PoS) consensus, and a large number of GPU mining machines bound to Ethereum were instantly idle. Miners eager to find a new way out began to turn their attention to Akash, connecting their surplus hashing power to the Akash market to seek new monetization channels. Among them are top mining pools and GPU hosting service providers such as Foundry.

 

It can be seen that Akash's hashing power comes from a relatively stable partnership, and its hashing power resources have been in a steady growth process. As of May 25, 2024, there are 17,400 CPUs and 390 GPUs in the Akash network. Akash plans to continue to introduce high-performance computing providers in 2024 to expand the network. To this end, Akash said it will soon launch a provider incentive program.

 

 

Computing power demand: AI wave drives exponential growth

 

After the introduction of GPUs at the end of August 2023, Akash's daily rental volume has increased significantly. It has now accumulated more than 180,000 rentals, and the daily income from rentals has continued to climb to a historical high.

 

 

 

Akash founder Greg Osuri said in an interview with Blockworks that Akash's high-end GPU utilization rate is close to 100%, and mid- and low-end GPUs are also maintained at more than 50%. Such a high usage rate is inseparable from Akash's continued cooperation with various projects. Akash has been actively bringing revenue to network users through cooperation.

 

Developer Tools:Partnered with Brev.dev to scale with Akash’s permissionless GPU infrastructure.

 

Metaverse:Partnered with Passage to launch the first virtual world with Akash’s permissionless GPU infrastructure.

 

Healthcare:Partnered with Solve.Care to provide faster, cheaper, and more secure patient data ownership to the healthcare industry.

 

Blockchain Infrastructure:

 

1. Partnered with Chia to enable Akash vendors to earn revenue on Bladebit Disk storage.

 

2. Partnered with Polygon to provide decentralized infrastructure for dApp developers in the Polygon ecosystem.

 

3. Partnered with Kava Labs to provide decentralized hosting services for the Kava ecosystem.

 

4. Provide decentralized cloud services for Helium, the largest IoT network.

 

5. Cooperate with HashQuark, the largest staking service provider in Asia.

 

Akash’s GPU rental market is one of the few crypto products that truly achieves product-market fit (PMF). Osuri said: "Traditionally, cryptocurrencies have been good at solving the problem of oversupply and reduced demand. Here, we have the opposite problem: high demand and low supply, or supply has not yet been released to the market."

 

Akash Network Token Economics

 

Purpose: Functionality and Application

 

AKT is the native cryptocurrency of Akash Network, playing a key role in ensuring network security, promoting resource transactions, and incentivizing ecological participation:

 

Staking consensus:AKT holders can participate in PoS consensus by staking AKT and become verification nodes to maintain network security and obtain block rewards. Staking AKT is also a prerequisite for obtaining voting rights in on-chain governance.

 

Leasing transactions:In the Akash decentralized market, tenants need to use AKT to pay for resource usage. Suppliers obtain AKT as an economic incentive by providing cloud computing resources.

 

Eco-incentives:Akash adopts a progressive inflation issuance model, maintaining a high inflation rate in the first few years to incentivize early ecological construction, and then gradually reducing the inflation rate to control the total amount of tokens. The AKT generated by inflation will be used to reward verification nodes.

 

Transaction fees:Akash charges a certain percentage of fees for transactions in the market (USDC 20%, AKT 4%), and uses the fees to repurchase and destroy AKT or allocate it to verification nodes. This move helps to increase the scarcity of AKT.

 

Community governance:AKT stakers can not only obtain staking income, but also vote on community proposals through the on-chain governance mechanism, and truly participate in the long-term development decision-making of the ecosystem.

 

Supply: Token Distribution and Circulation

 

The initial supply of Akash is 100 million, mainly distributed to investors, Akash Network Foundation and project team. The total token supply is capped at about 3.89 times the initial supply, and the new supply gradually decreases and approaches 0 over time. According to CoinGecko data, as of May 25, 2024, the current circulating supply of AKT is about 234 million, with a market value of $1.237 billion.

 

 

Since all pre-mined tokens of AKT have been unlocked, the current selling pressure mainly comes from inflation incentives. According to official data, about 130 million AKTs are currently used for staking, accounting for 54.65%. The annual inflation rate is 19.73%, and the average daily inflation of tokens is 70,000, worth about $300,000.

 

 

Although AKT has been listed on centralized exchanges such as Coinbase, Kraken, Gate, and Kucoin, it has not yet landed on first-tier exchanges such as Binance and OKX. This makes the project's attention in the Chinese circle fail to match its actual value, while also retaining the favorable expectations of possible listing on first-tier exchanges in the future.

 

AKT 2.0: Economic Model Optimization

 

The AKT 2.0 proposal was proposed by the Akash Economics Special Interest Group (sig-economics) in January 2023, aiming to optimize and improve the original AKT economic model to better adapt to the sustainable development of the Akash network. The proposal mainly includes the following core contents:

 

 

Introduction of Take Fee and Make Fee mechanisms (already launched):When users obtain computing power from the market, they need to pay Take Fee, and when providers provide computing power, they need to pay Make Fee. These fees will go into the incentive allocation pool to reward network participants. The fee rate is determined by on-chain governance.

 

Introduction of multi-currency payment and settlement (already launched):Allow users to use stablecoins such as USDC for payment and settlement to avoid the risk of AKT price fluctuations. Different currencies have different fee discount rates, which are set by on-chain governance. Using AKT to pay can enjoy the highest discount.

 

Use of the incentive allocation pool:The funds in the pool will be allocated to provider subsidies, public product funds, pledgers and community funds, etc. The specific proportions are determined by on-chain governance. The remaining non-AKT tokens will be converted to AKT and destroyed together with the AKT in the pool.

 

Provider subsidies:In order to ensure that the network has sufficient computing power in the early stage, providers need to be subsidized. The recommended methods include paying hardware operating costs and workload-based subsidies.

 

Public Product Fund:Used to incentivize developers to build the Akash ecosystem, managed and allocated by the Council.

 

The AKT 2.0 proposal not only improves the flexibility and inclusiveness of the network, but also ensures the robust operation of the early network through incentive allocation and provider subsidies. These improvements will help further enhance Akash's market competitiveness and enable it to occupy a more advantageous position in the increasingly competitive decentralized cloud computing market.

 

Conclusion: Natural product genes

 

Greg Osuri and Adam Bozanich, the two founders of Akash, are world-renowned open source developers and are also among the top 20 programmers in the world. Greg Osuri, CEO, built IT infrastructure at IBM and founded AngelHack, the world's largest hackathon organization. Adam Bozanich, CTO, led software development at WeWork, Symantec, and worked as an engineer at Topspin (acquired by Apple). He holds a U.S. patent for network protocol fuzz testing and specializes in security analysis.

 

 

Before launching Akash, these two veteran programmers actually knew nothing about cryptocurrency. They entered this field just because they happened to find that blockchain technology was the best way to solve complex technical problems. At the beginning, Adam Bozanich just wanted to create a platform to simplify multi-cloud workload deployment across traditional and hyperscale infrastructure. The goal was to build a platform similar to Heroku, but with lower costs and a smoother learning curve. After exploring the multi-cloud market for a while, he realized that a large amount of infrastructure supply was idle. Due to inefficient distribution channels, about 85% of data center capacity is not utilized. So he decided to build an always-online decentralized market where anyone can join on their own. This is the starting point of Akash's involvement in the crypto and blockchain ecosystem.

 

Although the team that is not a "crypto OG" caused some challenges in the initial communication with the community, on the other hand, it injected Akash with product genes that are very different from other projects. Compared to other projects that hype tokens to attract attention, Akash puts all its focus on product development and continuous construction. As a small detail, Akash has a total of 202 blogs so far. The first blog was published on November 28, 2017. Akash publishes a blog every 12 days on average, covering product updates, cooperation announcements, personnel appointments, and community plans. To be honest, it is rare for a crypto project to persist in writing project logs for 6 years, and still regularly publicize its development progress in the most boring bear market, telling everyone that "the team is working."

 

The founder's deep technical background and dedication to products have enabled Akash to focus on truly solving user needs and laying out the GPU computing power leasing business in advance, so as to stand out in the highly competitive market. This product-oriented gene not only makes it unique in the blockchain industry, but is also the key to Akash's success today.