Staking Hub: Akash AMA
The Akash Network will be a secure, transparent, and decentralized cloud computing marketplace that connects those who need computing resources (tenants) with those that have computing capacity to lease (providers). On October 22nd, Akash COO Boz Menzalji and VP of Product Jack Zampolin joined us in Staking Hub to answer all of our questions.
- Akash is eliminating the need to rely on centralized cloud computing providers
- Anyone with compute capacity can bid for jobs on the Akash marketplace
- Stakers earn rewards from inflation, transaction fees, and from the marketplace take rate
- Trusted provider program will help ensure quality of providers
- Stablecoin payments will be supported via IBC
The Decentralized Cloud
The Akash team believes that centralized cloud solutions that exist today face problems that can be solved by creating a decentralized system of providers.
Those who need computing resources (tenants) currently have to rely on large tech monopolies like Amazon, Google, and Microsoft for cloud computing resources. Tenants of these cloud providers are sometimes put into inflexible agreements and these providers have the ability to censor or even shut down your application.
Akash allows tenants to connect to any cloud provider on Akash via API. Tenants pay for what they need, and no one is able to censor or shutdown your application.
The Akash team also expects cloud computing on Akash will be 2 to 3 times cheaper than centralized options that exist today.
Idle Resources = Opportunity
People who have idle compute capacity can offset the cost of their investment by connecting to the Akash Network and auto-bidding for jobs on the network. The costs associated with these idle servers is much higher than most people would guess.
“Google had a case study a few years ago that quantified the value of comatose servers, specifically designed as servers that have not been turned on for a minimum of 6 months. [That value was] ~$30B. Plenty of under-utilized servers sitting there [and] we think the value is higher presently.”– Boz Menzalji, Akash COO
The Akash Marketplace
The Akash marketplace will connect tenants and providers. Providers will be able to set their own price, and list specific attributes and inventory that they have programmatically.
Tenants will be able to choose which providers they would like to use. This decision will be based on price, specific attributes, and a reputation score that ranks providers based on uptime and other measurable metrics.
Providers will be able to accept AKT, the native token on Akash once the marketplace is live. Akash will support stablecoin payments once IBC is enabled starting with Kava’s USDX.
The marketplace in its current form is just for spot compute, but the Akash team will be adding different contracts to support longer term commitments as the marketplace matures.
AKT stakers will ultimately be able to earn rewards from 3 streams – inflation, transaction fees, and the take rate of the marketplace.
The take rate, which is common in most traditional marketplaces, will be set at 20% at the start. Boz Menzalji gave an example of what that would look like for AKT stakers with minimal market penetration.
“The cloud infrastructure market is projected to be around $202B. If Akash has .01% penetration that would mean around $20M of cloud spend would be on Akash’s Cloud marketplace. A 20% take rate of $20M is $4m that would be distributed back to stakeholders of Akash.”– Boz Menzalji, Akash COO
Given the fact that Akash will support stablecoin payments, it is likely that AKT stakers will be rewarded in both AKT and stablecoins, which is similar to the Livepeer design where LPT stakers are rewarded in LPT and ETH.
AKT stakers will be the body that determines the economic and network parameters of Akash via on-chain governance.
The Akash mainnet has already launched, but the team is preparing to launch a testnet in November designed to test the diverse catalog of unique applications that can be deployed on Akash.
“Our initial focus are blockchain nodes, defi front ends, and other simple applications initially. We’ll expand our capabilities to support much more complex application deployments in the future.”– Boz Menzalji, Akash COO
They experienced high participation in their previous testnet in Q4 2019 which included 1800 applications being deployed and supported by 144 cloud providers.
Special thanks to Boz Menzalji and Jack Zampolin for spending an hour with Staking Hub to answer all of our questions!
Thank you Gavin for co-hosting and thanks to our Staking Hub community for all of your wonderful questions.
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