Original author: Firehand, Kevin, Charlotte
1. Introduction: The AI track has become the core narrative of this cycle
The popularity of the AI track may no longer need to be elaborated - the price performance is enough to overshadow all words. On February 23, 2024, Nvidias stock price exceeded US$800, and its market value exceeded US$2 trillion, becoming the fastest company in history to grow from a market value of US$1 trillion to a market value of US$2 trillion. On the Crypto track, AI track tokens have performed well in the past few months. Leading tokens such as RNDR, TAO, and FET have all gained more than 3 times. Every important event in the AI field will lead to the completion of related tokens. A rapid growth.
AI has become the most important human technological revolution in this cycle, and accordingly has become the number one track for financial speculation. Blockchain and artificial intelligence are actively exploring the possibility of integrating each other. The Crypto world will benefit from the important progress of AI technology, driving the rapid rise of related leading tokens. Perhaps a few months ago we were still discussing the feasibility of combining AI with blockchain, but now this discussion seems less important.AI has become the core narrative of this cycle, with market sentiment and financial enthusiasm overwhelming everything else。
In our previous overall analysis of the AI track (Starting from Buterin’s article, what are the subdivided tracks of Crypto×AI worth paying attention to?), reviewed the four directions in which V God subdivided the AI track:
AI as participant: AI games, AI prediction competitions
AI as interface: Various AI applications
AI as the rules of the game: Autonomous Agent underlying protocol, zkML/opML
AI as a goal: decentralized data protocols, decentralized computing power protocols, and decentralized AI models
“AI as a goal” represents Crypto’s decentralized transformation of AI, which is the most attractive and hyped narratively., in terms of implementation, although it is currently unable to compete effectively with centralized businesses, many innovative projects with feasible business logic have been born, among which projects that have formed moats will become investment targets with strong trends in this cycle.
2. Track Overview: Decentralized computing power is the core direction of laying out the AI track.
Among the many subdivided tracks of Crypto×AI,Decentralized computing power will be the direction that simultaneously satisfies narrative hype and value investment.。
First of all, the demand for computing power in the AI industry itself is growing rapidly, and insufficient computing power and high costs are becoming problems for the entire AI industry. On the supply side, the production of AI GPUs is being exclusively monopolized by NVIDA. The major giants control the AI computing power, part of which is used for training new models and the other part for leasing. Highly centralized and monopolized cloud platforms are controlling it. Focus on computing power pricing power. On the demand side, the demand for model training and model inference is growing rapidly. Model training competition is intensifying the competition for computing power. Small model training and fine-tuning also require lower-cost computing power support. The large-scale adoption of AI applications is increasing the number of models. The computing power required for reasoning.
Secondly, among the many AI subdivisions, decentralized computing power is the direction with the closest integration of Crypto and AI and the clearest business logic. The use of tokens to incentivize the supply of computing power, or the more extensive business logic of DePIN, has already proven its feasibility in decentralized storage tracks such as Filecoin in the previous stage. Whether it is an AI application like Wrapper or the underlying protocol of Agent, the importance of tokens in the entire system is actually not high. In decentralized computing power projects, cryptocurrency has a deep binding relationship with the entire business logic. Crypto has truly played an inspiring role in reshaping the AI landscape.
With the recent NVIDIA conference, decentralized computing power has ushered in a new wave of climax. Leading projects have experienced impressive growth, and a number of new computing power-related projects have emerged.The current characteristics of the decentralized computing power track are: a large number of projects, similar project business logic, fierce competition, and leading projects have a moat in terms of supply and demand stability of computing power resources.
In terms of business logic, these types of projects are basically similar: using cryptocurrency as an incentive, allowing suppliers with CPUs and GPUs to provide computing power, so that small and medium-sized enterprises can use the computing power provided by lessors without permission. Token incentives make computing The price of power is much lower than that of centralized suppliers. At the same time, the requirements for communication and parallel computing for decentralized model training are higher, and the computing purpose is changing from training to reasoning. Therefore, most current projects focus on distributed reasoning, with a high degree of homogeneity.
Although the NVIDIA conference led to project growth for a series of GPU concepts,However, we expect that the future development of this track will be further aggregated and centralized. After the leading projects run away, small projects will decline in the medium to long term.Both the supply of computing power and the users willing to adopt decentralized computing power are scarce. When business logic is highly homogeneous, resources on both sides of supply and demand will flow to leading projects first. In addition, users need large-scale and stable computing power guarantees, and an overly decentralized track structure will be even more unfavorable to compete with centralized cloud service providers.
Based on the above analysis, decentralized computing power will be the key direction in laying out the AI track. With medium and long-term investment, leading projects that already have a certain moat will have continued competitiveness. Under this logic, we believe that Akash will be the core target for laying out this track.
3. Akash Network: Fundamentals and Token Economic Analysis
3.1 Fundamental analysis
Akash Network is a decentralized cloud computing platform that aims to integrate underutilized computing resources around the world by providing a peer-to-peer market and establish an open and transparent market so that users can freely publish resource requirements and make Global resource providers conduct real-time bidding, reducing the cost of cloud services. According to Messaris report, Akashs cost for the same hardware is much lower than that of other cloud providers.
Akash was founded in 2015 and launched mainnet in the Cosmos ecosystem in 2020. Akash initially focused on CPU computing. On August 31, 2023, Akash Network completed the mainnet 6 upgrade and began to support the GPU cloud market.
computing powersupply sideMainly from data centers, miners and consumer-level computing power. After mainstream public chains shift to the PoS (Proof of Stake) mechanism, the idle computing power of a large number of mines has become a problem to be solved. Akash Network is effectively utilizing these idle resources by cooperating with multiple large miners and has obtained a large number of high-performance computing resources of nearly 500 V1 00 equivalent GPUs. Among them, Foundry, the largest Bitcoin miner in North America, has added 48 to the Akash GPU network. NVIDIA A 100. Personal computers scattered around the world also contain a large amount of underutilized low-end computing power. Currently, there are over 17,700 CPUs and 258 GPUs in the Akash network, and that number is growing. In addition, Akash has also launched specific incentive programs, such as a $5 million pilot incentive program, aimed at attracting more computing power providers to join the platform.
existdemand side, Akash Network is committed to attracting more developers to join by establishing its own open source community, which not only helps strengthen the moat of its ecosystem, but also brings continuous innovation and development momentum to the platform. In addition, Akash is also actively seeking cooperation with other decentralized AI protocols to expand its service scope and improve the competitiveness of the platform. Currently, Akash has reached a partnership with two major decentralized first-level protocols, Gensyn and Bittensor. This not only brings a large amount of fixed demand to Akash, but also proves the attractiveness of its platform in the decentralized computing power market. and strength. After the introduction of GPU in August 2023, Akashs daily rental volume has also increased significantly. Currently, 162,700 rentals have been completed, and the daily revenue from rentals is also growing.
existMatching supply and demandOn Akash, Akash uses a reverse auction (Reverse Auction) mechanism, that is, users create orders, computing power suppliers bid for the orders, and users complete the selection based on the suppliers bid and other information, and sign a lease.
In terms of specific business, Akash Networks computing power is mainly used for data preprocessing and model inference, but attempts and development of model training are currently underway. Starting in August 2023, Overclock Labs began to train basic AI models with ThumperAI, and eventually worked to create an open source artificial intelligence model named Akash-Thumper and share it on Huggingface. If the training of the model can be successfully completed, the process of training the model using distributed computing will be defined and attract demand for the Akash network to improve utilization.
Now that the GPU is available and the price is attractive, there is only one final barrier that prevents developers from using Akash: **Crypto Barrier. **Akash Network has adopted a series of measures to reduce user difficulty:
developCloudmos Deploy and Akash Console, developers can manage instances in the network frictionlessly;
Cosmos Swap is integrated on Metamask, and users can authorize AKT transactions on Metamask;
Supporting stablecoin payments, Noble’s upcoming Cosmos-native USDC can also significantly lower the entry barrier for developers.
3.2 Analysis of Token Economics
The AKT token plays multiple key roles in the Akash ecosystem: serving as a staking medium to enhance network security, governance, a rental settlement unit, and a benchmark for market pricing.
By staking AKT, users can participate in the governance of the network, with voting weight determined by the number and duration of their staked tokens, thus promoting the networks decentralized decision-making process.
AKT is mainly used to pay leasing fees. Akash regulates supply and demand by setting different handling rates (such as 4% handling fee for AKT payment and 20% for USDC payment) and an annual inflation rate of up to 13%. At the same time, it will A portion of the inflation and fee revenue is allocated to the community pool for public funds, incentives, and possible token destruction to ensure the sustainable development and value circulation of the ecosystem.
According to Coingecko data, as of March 20, 2024, the circulating supply of AKT is 230, 816, 799. All AKT tokens have been fully unlocked, so they no longer face high unlocking selling pressure. The current main increase in circulation comes from inflationary incentives, with the maximum supply being 388, 539, 008. Annual inflation is still currently around 15%, according to Stakerewards data. Approximately 133.49 m of AKT was used for pledge, accounting for 57.8%. The pledge ratio is relatively high.
In terms of liquidity, Akash’s main liquidity is concentrated in three central exchanges: KuCoin, Kraken and Gate. It is worth noting that AKT has not yet been listed on major first-tier exchanges such as Binance, resulting in its relatively low visibility in the Chinese area. However, AKT has been listed on leading US exchange Kraken for some time and is already listed on Coinbase. Historical cases show that projects such as Bonk and Ondo often experience price rediscovery and significant growth after entering Coinbases Roadmap. Based on this trend, the launch of AKT will stimulate market enthusiasm and investor interest, thereby driving up its price and market value.
4. Competitive Landscape Analysis
Judging from the previous article, the competition in the decentralized computing power field is fierce, and the moat of the leading project is relatively high. We believe that the two core competitive indicators of the decentralized computing power track are:Computing power supply and computing power demand.
The importance of computing power supply is self-evident. Having a larger number and higher quality of GPUs can handle more complex computing tasks more stably and efficiently. When computing power resources are extremely scarce, it will Become the moat of the platform. Computing power requirements are equally important, inCoinbase’s latest research reportpointed out that although the supply of computing power in decentralized platforms has increased significantly, platform revenue has not increased at the same time, thus raising doubts about the market demand for decentralized computing. The supply and demand of computing power will act as a positive flywheel, driving the rapid growth of the entire ecosystem.
In this track, projects that share the leading position with Akash include Render,io.net, Gensyn. Among them, Akash and Render were born earlier and were not born for AI computing. Akash was initially used for general computing, Render was mainly used for video and image rendering, and io.net was specially designed for AI computing, but in AI, computing power will After the demand has been raised to a higher level, these projects have tended to develop in AI. While Akash, io.net and Render focus on AI reasoning, Gensyn focuses on AI model training. Gensyn is trying to establish such a verification layer to ensure the correctness of calculations through probabilistic learning proofs, graph-based precise positioning protocols and incentives. .
From a computing power supply perspective, Akash currently has 17,700 CPUs and 258 GPUs. In contrast, Render has not disclosed hardware data to the outside world, and io.net has more GPU computing power. As of March 20, 2024, io.net has 51,738 GPUs and 10,206 CPUs. Render and Filecoin reached a cooperation and obtained the right to use 4458 GPUs and 197 CPUs from Render and 1024 GPUs from Filecoin. The quantity and quality of computing resources far exceed Akash. However, it should be noted that io.net is using The extremely attractive airdrop incentives attract computing resources. The number of GPUs on the platform is changing rapidly. We still need to observe how much computing power can remain on the io.net platform after the airdrop is over. In contrast, Akash’s computing power comes from a relatively stable and cooperative relationship, and its computing power resources have been in a process of steady growth.
Regarding the use of computing power, Render has not yet disclosed relevant data, but its current business focus is still on image rendering. In addition, it has established a computing client to promote use in the field of artificial intelligence, that is, it provides an API to allow other projects to access Renders GPU network to support AI inference, training, fine-tuning and other use cases,Projects currently connected to Render include io.net, Beam, FedML, Nosana, Prime Intellect and Exabits are on the ballot.
The overall network usage of io.net is around 30% -40%, and the computing power connected from Render and Filecoin is almost unused.
The GPU usage of the Akash network remains at around 40% -60%, which is a relatively advanced level among decentralized computing power platforms. In recent days, due to the substantial increase in the supply of GPU computing power, the usage has temporarily declined. CPU network usage also remains at a high level of 50-60%.
(Source: Calculations based on Akashstats)
From a valuation perspective, Akash’s current FDV and MC are both 1.2B, RNDR’s FDV is about 5 times and MC is about 3 times. io.net and Gensyn have not yet issued tokens. Among them, io.net’s latest round of primary financing was valued at 500 M. However, with the market sentiment for io.net rising, the price of secondary tokens after the opening is expected to be far higher than this value.
5 Conclusion
Based on the above analysis, Akash will be a target that fits the core narrative of this cycle and has medium and long-term investment value.
From the perspective of narrative themes and fundamentals, the AI track has become the main track of this cycle. Decentralized computing power is the core direction of this track. On the one hand, it comes from the attention on computing power brought by external NVIDIA. Degree and hype, on the other hand, come from the close integration of crypto and AI in the DePIN concept. Akash is the leading project of decentralized computing power. In the next round of AI sector rotation, the direction of decentralized computing power will definitely be one of the focuses, and Akash will also be sought after by funds because of its competitiveness and moat.
From a financial perspective, Akash has completed the unlocking of all investors and teams, and will not face huge selling pressure in this cycle. At the same time, the token pledge ratio exceeds half. Calculated based on the current token circulation and an inflation rate of 15%, 94,609 AKT will be unlocked every day, with a currency price of $5 and a daily unlock volume of approximately $500,000. The inflationary selling pressure will not Not big. In addition, Coinbase has listed AKT on March 20, which will open up the US market for AKT and enhance liquidity. However, AKT has not been listed on Binance, and there are still high expectations for listing.
You should continue to pay attention to Akashs development in attracting computing resources and expanding customer relationships in the future, and be particularly alert to the risk of insufficient competitive advantages between Akash and similar projects. Projects including io.net and Render are strong competitors to Akash, especially io.net is currently attracting a huge amount of computing power resources due to the expected airdrop. Akash is a CPU computing person. Whether he can obtain continuous expansion of computing power resources on GPU and have sustained and stable use cases and customers is the key to his success. The core of project competition.
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