Akash, the (decentralized) Airbnb or Uber in cloud services?
(This article is an edited and translated version based on this article written in Chinese on May 3 about why Forbole participates in Akash.)
Yes, Forbole has invested in Akash. No, we are not a venture capital. We invest in other blockchain/crypto projects for more a strategic purpose than a pure investment one. We tend to invest in projects that can collaborate with our products such as Big Dipper and Desmos while provide an upside potential. This article will briefly introduce our experience of participating in Akash and the reasons why we are on Akash.
Commercial time: From what we have noticed on social network, Akash is still under the radar. If you are a venture capital, angel investor or data center, we are happy to discuss the various opportunities in Akash with you.
We met Akash
I woke up in a morning in November and saw that Jack Zampolin, who was the product director at Tendermint at that time , mentioned a project called Akash on Twitter.
Although I am quite cautious about new projects, Akash was an exception because it was mentioned by Jack. I thought we should take a closer look. When I saw the term “serverless computing”, I forwarded this project to Kwun immediately. A few days later, Kwun tried Akash’s demo to deploy a programme which was a discussion forum. Due to the seamless experience he enjoyed, he immediately fell in love with the project. He is certain that programmers would love Akash and there will be an enormous market, because he is also a paid user of projects such as Heroku.
Akash means “open space, sky” in ancient Sanskrit.
Then we further discovered that the potential of Akash is far beyond serverless computing. Akash is a decentralized serverless cloud computing blockchain network built with Cosmos technology. They are committed to becoming a permissionless, open and secure cloud computing marketplace which maximizes the efficiency of cloud computing resource and greatly reduces its cost.
Cofounder of Akash
Greg Osuri, Cofounder & CEO of Akash, is a well-known contributor in open source community. He has contributed to projects such as Firebase, Terraform, Kubernetes and Docker. Prior to Akash, Greg founded AngelHack, the world’s largest hackathon organization with over 150,000 developers across 50 cities worldwide. Greg has provided the first expert-witness testimony at the Senate which facilitate the passing of California’s first Blockchain law. One sentence on his personal website can describe him best:
“I build things for people that build things.”
Akash’s vision
Three centralized cloud computing service providers (“CSPs”): Google’s GCP, Amazon’s AWS, and Microsoft’s Azure have created an oligopoly which accounts for 70% of the market. Their services are not flexible, not transparent, very expensive. But there is no sound alternatives. Forbole understands this situation very well as we run validator nodes, maintain Big Dipper and Desmos which consume a lot of cloud computing resources. This cost is so high that we have recently started to review our business plan and may need to decommission some of our services in the near future. I believe many validators and contributors in this space are facing the same problem.
Akash Supercloud and Supermini
Supercloud, Akash’s flagship product, is positioned as the world’s first decentralized peer-to-peer cloud computing marketplace. Anyone who has a computer can become a cloud computing provider in a secured and hassle free manner. This will unleash the 85% underutilized computing resources in 8.2 million data centers all over the world. The target customers of Akash are enterprises in machine learning, blockchain, big data and other fields that consume a lot of computing resources. According to Akash, it can reduce the cost of cloud computing by as much as 90%.
Another killing product of Akash is its Supermini, a powerful and portable computer for you to generate passive income at home or at the office quickly and easily by becoming a cloud provider on Supercloud using Supermini’s unused compute.
Highlight of Akash’s economic model
- Transparent and decentralized market
The current market, which is dominated by a few centralized cloud service providers is opaque. Even for professionals like us, we often have trouble reading the resources consumption and costs incurred on our bills. On Akash, the market price will be discovered by the sellers and buyers under an open, decentralized and transparent auction mechanism. - Subsidy pool for long-term growth
On proof-of-stake blockchains, inflation is generally used to incentivize token holders to stake their tokens and participate in the security and governance of the blockchains. Akash’s model does more than this. A significant portion of inflation (eg. 50%) of Akash Network Token (“AKT”), which is the native staking token on Akash, will be allocated as “Subsidy Pool”. Subsidy Pool is managed by the community in a decentralized manner and will be used to incentivize long-term commitment and contributions which can help to grow Akash. - Subsidizing cloud providers to accelerate growth
To grow Akash as fast as possible in early stage, it has to provide a sufficient supply of cloud compute which will be offered at a very low cost (eg. provide a cost reduction 10x-15x the market). Akash will achieve this by subsidizing cloud providers such that the buyers can enjoy a low price while the seller can earn an acceptable profit.
Under the game theory, sellers (i.e. cloud providers) will try to ask for a price that are high enough to provide an acceptable profit and not overly high that may lead to losing the deal. Buyers (i.e. the cloud tenant) can ensure they can lease the cloud service they need at as low as 1/10 of the price they are currently paying to CSPs. - Take fee for AKT stakers to incentivized long-term commitment
A percentage of the lease amount will be paid to AKT stakers as reward. AKT stakers who have committed longer locking period will be allocated a higher portion of the take fee.
What this means to you?
- Dilution vs growth
AKT owners have to analyze the dilution effect they will face and the growth of the network this dilution will bring. I opine that this dilution effect is an implicit marketing cost that will only be paid when it brings results. If the AKT owned by a pure investor who is neither a cloud provider or a cloud tenant is facing dilution by the subsidy pool, chances are this pool has been used to simulate growth (eg. provide abundant cloud compute at very low costs). This growth will ultimately become the growth of economic value of AKT. - Incentivize long-term commitment
One brilliant (but untested) design of Akash’s economic model is the setting to incentivize long-term commitment. For example, the longer you commit to lock your AKT, the more reward you will earn. While I don’t think this can eliminate the volatility created by short-term trader, I do believe this is a fairer design. I wonder if this is the only model of the same kind in the Cosmos ecosystem and I look forward to seeing how it will behave. - Ideal mode to participate: investor x validator x cloud provider/tenant?
I think an ideal mode to participate Akash is that you are able to become a (i) validator, (ii) have underutilize cloud compute to provide and (iii) some money to invest in Akash. You can also substitute (ii) with “have the need to lease cloud service”. With this integrated role, your return will be maximized. But the most important thing is that you will contribute to making this revolution in cloud computing a success which will ultimately benefit everyone in this space.
Is Akash the (decentralized) Airbnb or Uber in cloud services?
Current status of Akash
After several smaller campaign in the past six months, Akash officially launched an eight-week large-scale incentivized testnet which will give away a total of 3 million AKT (3% of Genesis supply). You can participate as validators, providers and developers. According to our experience, such a large-scale incentivized testnet is a signal that the mainnet and token listing are near.
We are very excited about Akash because it has solved the problems we are facing. Cloud computing is our biggest expense after employees’ salaries. Furthermore, we have worked closely with CSPs and data centers since 2005 when we started our internet career and hence we understand pretty well their business model. We enjoy collaborate with team that get its hands dirty and walk the talk (see Greg’s GitHub). If you are a venture capital, angel investor or data center, we are happy to discuss and explore the opportunities on Akash with you.
Reference:
Founded in Hong Kong in 2017, Forbole [ˈfɔːbəl] is a pioneer in blockchain technology, staking service and UX solution. We are known as a helpful, reliable and friendly validator, contributor and builder on various blockchains. Forbole is the creator of Big Dipper which is an open-source block explorer used by people from over 140 countries. We have also initiated Desmos, a project aims at improving the well-being of users on social networks through blockchain technology.
Twitter | Telegram | GitHub | Chinese Blog | Desmos’ incentivized program
