About this Report
- This study is a detailed analysis and review of Akash Network.
- This study does not endorse or criticize the project but summarises the key points impacting Akash Network’s long-term success.
- All the information is from the listed sources and true at the time of writing; however, these may be subject to change.
- The reader is encouraged to do their own research (DYOR) on Akash Network before making any investment decision.
- The author of this document does have Akash Network in their portfolio. However, this study is written from an unbiased perspective.
- This study is for informational purposes and should not be considered financial advice.
Akash Network Report
- Akash is a decentralized cloud computing network offering a marketplace to trade computing resources.
- Its native token, AKT, is used for payments and governance.
- In 2023, Akash added support for GPU resources.
- AKT has gained over 2,500% over the last 12 months.
Akash Network Review
Akash is a blockchain-based cloud computing platform, offering a decentralized marketplace where users buy and sell computing resources for various purposes, although decentralized finance (DeFi) and machine learning represent the main targeted audience.
The network was launched in 2018, and its goal is to provide a decentralized, cheaper, and more efficient alternative to centralized cloud solutions offered by tech behemoths like Amazon, Google, Microsoft, and IBM.
The network has been built with the Cosmos SDK and has AKT as its native utility and governance token.
What’s Unique about Akash Network?
Akash is the leading decentralized, peer-to-peer (P2P) marketplace for cloud computing. It promotes itself as the world’s first decentralized supercloud.
The network focuses on a narrow blockchain niche, where it can consolidate its leading position if it takes the right steps in the coming years. Originally targeting DeFi, Akash has also made significant inroads into AI.
Unlike the few other competitors, Akash has a community-oriented approach and focuses on organic growth without going too far with incentivizing the supply side to artificially support the token’s value. Instead, it has been working on creating genuine value for users, who are expected to drive demand in the long term.
Akash has the opportunity to dominate the decentralized cloud market the same way Chainlink is leading the oracle space.
What Problems Does Akash Network Solve?
The main problem addressed by Akash is that most DeFi and Web3 projects are built on centralized cloud platforms, which defies the decentralization narrative they promote.
On Ethereum, 65% of all nodes are hosted in data centers, and about two-thirds of them are hosted by only 3 major cloud providers (AWS, Hetzner, and OVH). This means that a third of Ethereum nodes are in Amazon’s clutch.
Besides node hosting, many apps need cloud services to host their middleware and the front ends of their apps and webpages, which is another centralized problem. If a dapp’s front end is hosted on AWS, it doesn’t matter how decentralized the protocol really is since AWS can simply shut down the interface.
In 2021, dYdX shut down due to an AWS outage. Such issues make dapp decentralization less relevant.
With Akash’s marketplace, DeFi and now AI projects can leverage a censorship-resistant decentralized cloud solution that is cheaper, more resilient and efficient.
Akash Network Technology
The Akash network is a layer 1 chain built on Cosmos. It uses Cosmos’ Tendermint for its consensus mechanism – a Delegated Proof of Stake (DPoS) version where stakers can vote and delegate validators to approve the next block.
Akash connects cloud service providers with end users, who enter into lease agreements on its network. Through a virtualization process leveraging Kubernetes technology, computer resources are divided into ‘containers.’ These containerized apps can then be leased to ‘Tenants,’ who are the users of cloud services. On the other side, ‘Providers’ bid on these requests, with the lowest bid for requested resources winning the lease.
In this way, the main winners are users, who benefit from lower costs. Meanwhile, Providers can still monetize their excess resources despite having to compete by lowering bids.
| Containers represent a standardized software unit that comprises code and all its related elements, including runtime and system tools. They allow developers to package everything needed to run an app into a single location, making containers lightweight and portable. This packaging enables apps to run across various computing environments. |
Providers and Tenants are the key players on Akash, while the network itself acts as the Airbnb for datacenters, setting the main rules and offering an interface. However, in this case, it’s a ‘decentralized Airbnb’ – all transactions are conducted on its native chain, and the AKT token plays a central role.
https://akash.network/about/general-information/
This decentralized approach is more efficient than traditional cloud providers like AWS, which dictate the price, limit customization, and are exposed to the risk of a single point of failure, as shown in the scheme below:
https://akash.network/about/general-information/
Akash Providers
As of this writing, there are 60 Providers from all around the world, predominantly from the US, Europe, and East Asia.
https://akash.network/about/providers/#a-provider-centric-perspective
They offer four types of computer resources, including CPU, GPU, Memory, and Storage. Each of these resources has a utilization rate of at least 15%.
https://akash.network/about/providers/#a-provider-centric-perspective
| To meet the growing demand for AI use cases, Akash launched support for GPU provision in August 2023, starting with NVIDIA GPUs. |
Here are the main steps for providing computer resources to users:
Akash Tenants
On the other side, Web3 and AI developers benefit from a “Reverse Auction” system where they can specify a targeted price for their required resources, and providers compete to fulfill the request. This approach results in much lower prices compared to centralized cloud services.
https://akash.network/about/pricing/custom/
Disclaimer: these prices are from the Akash website as of March 2024 readers are advised to visit the official company website to get the latest price information
Besides the lease payments, providers also receive additional AKT rewards. Potential earnings can be calculated here.
Akash Team and Investors
Akash is the flagship product of Overclock Labs, a cloud service automation and management firm. The team is distributed globally and includes developers like co-founder Greg Osuri, the CEO of Akash, and Adam Bozanich, the platform’s CTO.
Before founding Akash, Greg founded a company called AngelHack, which helped set up hackathons around the world. Adam was the CTO of Overlock Labs, which is a predecessor to Akash.
In a private round conducted in March 2020, Akash raised $2 million from investors like Digital Asset Capital Management, Infinite Capital, Satori Capital, Cypher Capital, and angel investor George Burke. Eventually, it raised an additional $800,000 from retail investors during an Initial Exchange Offering (IEO) on Bitmax.
Akash Competitors
While Akash aims to challenge the dominance of tech giants, it faces competition from other blockchain projects that tap into this fast-growing niche. Some of Akash’s competitors are:
Render – a decentralized network that incentivizes crypto miners willing to rent out their GPUs. Creators and AI developers can use the GPU cycles for different tasks.
Filecoin – a decentralized data storage marketplace.
Cudos – a decentralized cloud computing network aimed at Web3 apps.
Golem – a blockchain marketplace for computational power.
iExec – on-demand decentralized cloud computing network.
Akash Ecosystem and Adoption
Dozens of dapps use Akash for various use cases, including:
DeFi
Chandra Station – Omni-Chain decentralized exchange (DEX) on Cosmos enabling users to swap, stake, and bridge between Ethereum and Cosmos.
Evia Network – yield products on Cosmos.
Rango Exchange – multi-chain DEX/bridge aggregator.
AI/ML
Akash Chat – pretrained generative text model with 7 billion parameters by Mistral AI.
SDXL – text-to-image model from Stability AI. This app is running on NVIDIA A100s leased from the Akash network.
NFTs
OmniFlix – interoperable P2P network for creators and communities to mint and manage NFTs.
Stargaze – community-owned app chain for NFTs with CosmWasm smart contracts.
Gaming
Strange Clan – Akash-powered game using a ‘play-to-own’ model, enabling players to farm, craft, and quest with their clan.
Web3
Desmos Network –protocol for building open and decentralized social networks.
Presearch – decentralized search engine with over 150 million monthly searches.
In total, Akash users have spent over $340,000. The spending rate has surged following the introduction of GPU support.
https://stats.akash.network/graph/total-usd-spent
The daily USD value spent on Akash increased from less than $100 for most of 2023 to over $2,000 as of today.
https://stats.akash.network/graph/daily-usd-spent
However, the number of active leases hasn’t grown considerably from 2021.
https://stats.akash.network/graph/daily-deployment-count
The number of core developers and code commits on the open-source network has maintained a steady level during the last 12 months.
https://tokenterminal.com/terminal/projects/akash-network
Akash Token
The AKT token has three main functions:
Security – AKT holders can stake the token to participate in the PoS consensus mechanism. Staking is a passive income opportunity for token holders.
Value exchange and payments – AKT is a mechanism to store and exchange value, and it acts as a reserve currency in Cosmos’ multi-currency and multi-chain ecosystem. Also, Tenants can pay for resources in AKT.
Governance – AKT holders have the right to vote on proposals to improve the ecosystem and manage parameters like inflation rate and take rates.
Take rates are fees representing a percentage of the lease payments. They go to the community pool, which uses the funds to pay for developers, bounties, and other incentives. Another stream to the pool comes from the 25% community tax paid by stakers.
https://akash.network/token/#akt-features
The pool’s current value is over $26 million.
Akash launched its mainnet in September 2020, with an initial token supply of 100,000,000 pre-mined AKT while capping the maximum supply at 388,539,008 AKT. The initial supply was divided among investors, the foundation, and the team. About 75% of the maximum supply will be distributed for rewards, with reward rates gradually decreasing over time.
https://dropstab.com/coins/akash-network/fundraising
Key AKT Metrics
As of mid-March 2024, AKT is a $1.4 billion market, with a token price of $6.2, up 100% over the last month. It currently ranks 82 on Coinmarketcap. The token price has surged over 1,700% during the last 12 months.
The circulating supply accounts for 60% of the maximum supply, and AKT has an inflation rate of about 14%.
The number of daily active wallets has been increasing and is currently near 5,000.
https://www.mintscan.io/analytics/network/accounts/trends-active?source=akash
Token Performance
AKT has outperformed all its competitors since the beginning of 2023, gaining over 2,900%. The price has been driven by the launch of new products (GPU support), the general bullish crypto market (with Bitcoin surging on ETF approval), and an increasing interest in AI coins.
https://www.tradingview.com/x/CKglZKUJ/
AKT’s all-time high was hit on April 6, 2021, at $8.25. It’s currently down about 25% from its ATH.
However, AKT’s market cap is currently at a record high of $1.42 billion, up 340% from the period of the price ATH.
Trading volume is also at a record high:
During the last month, the network has handled over 450k transactions at a rate of 0.77 transactions per second.
AKT Trading
AKT is available on 10 centralized and on one DEX – Osmosis.
It’s traded against USD, USDT, OSMO, USDC, EUR, ATOM and ETH.
Coinbase may list AKT in 2024, which may be a major boost for the coin.
AKT Staking
AKT staking enables token holders to delegate AKT to hundreds of validators. As of today, the reward rate for staking is 15.34%. Running your own validator node requires a minimum deposit of 48.63k AKT locked up for a period of 21 days.
The number of staked AKT has slightly decreased since September 2023, while the reward rate has increased from 9% to over 15% to catch up with the inflation rate.
https://www.stakingrewards.com/asset/akash
Considering the high inflation, the real reward rate of AKT staking is about 0.5%, which is still better than over 85% of the market. Stakers win when the price of AKT is increasing.
Here are a few staking metrics and AKT’s position versus the market:
https://www.stakingrewards.com/asset/akash
Stakers can also participate in governance.
https://www.mintscan.io/akash/parameters
Akash Security
While Akash’s security can’t compare to that of Bitcoin or Ethereum, it leverages a Cosmos-based blockchain that has a decent degree of decentralization and an open-source code.
The network has never been hacked.
Akash spends about $5,000 per month on bounty programs that reward its community.
With over 18,000 active nodes and more than 60,000 staking wallets, Akash is more decentralized than Render or Filecoin.
https://depin.ninja/research/1
Akash Network Roadmap
Due to its community-driven approach, Akash doesn’t have a roadmap as of today. Instead, AKT holders vote to decide on new developments based on market conditions. For example, when AI was trending following the launch of ChatGPT by OpenAI, Akash adjusted its model to enter the AI and ML market.
So far, the mainnet has undergone 8 upgrades.
Akash Network Community and Partners
Akash has an active community on social media, with over 110k followers on X and over 17,000 Discord members.
Akash has secured partnerships with Solana, Chainlink, Skynet Labs, KAVA, Polygon, and ColdStack. It has also partnered with several entities related to the Cosmos ecosystem, including Simply VC and Forbole.
SWOT Analysis
Akash Network Review – Summary
Thanks to the introduction of GPUs and a shift to AI use cases, the Akash Network has emerged as a leading player in decentralized cloud computing. It offers a computing resource marketplace to challenge traditional cloud providers like AWS and Google Cloud.
Launched in 2018, Akash leverages the Cosmos SDK to offer a decentralized and interoperable cloud computing network – Supercloud – to democratize the sector and offer a cheaper and more efficient alternative aimed at DeFi and AI applications.
Akash’s native utility and governance token, AKT, fuels the ecosystem. With its community-oriented approach, Akash prioritizes genuine value creation over artificial incentives, positioning itself as a leader in the decentralized cloud market.
