Disclaimer - This is part of our outside perspective series. Curious Cosmonaut Research is not the author we are simply highlighting some good threads and perspectives on the Cosmos ecosystem with their permission. We also, therefore, do not guarantee their accuracy.

Author:  Tory Green

Source: Twitter Thread

Date:  January 9, 2023

Akash may be one of the biggest hidden gems in Web 3

Unfortunately, fewer than 1% of people understand why

Here’s the unexpected reason $AKT could 100x

(hint: it all has to do with AI…)

Overview

Akash is a decentralized marketplace for cloud computing (we’ll explain this in a second)

It has a MC of $24M, FDV of $80M, and its $AKT token trades at $0.21

This thread will cover the following:

• What is the Cloud?

• What problem does #Akash solve?

• How does it work?

• Why is its potential goes beyond the Cloud

• What are its #tokenomics?

• What’s the potential value of $AKT?

What is the Cloud?

“Cloud computing” is just a fancy term for “using someone else’s computer”

Instead of using your own computer to store data or perform  calculations, you can use the internet to connect to a remote computer owned by Amazon, Microsoft, Google, etc…

These remote computers are often held in massive “data centers” Data centers are huge buildings (or complexes of buildings) that can each host millions of individual computers (called “servers”) There are currently 8M+ data centers across the globe

Cloud computing is one of the greatest advancements of the 21st century It allows companies to access crucial computing resources without having to spend a bunch of money on hardware, maintenance or security As such, most businesses have transitioned to “the Cloud”

Problem

Unfortunately, the “Cloud” isn’t all it’s cracked up to be

Three players - Amazon AWS, Google Cloud Partners and Microsoft Azure - control over 60% of the market

This creates several problems:

• High costs

• Risks of censorship

• Underutilized resources

High Costs - Amazon, Google and Microsoft use their dominant position to extract heavy taxes on their users @a16z estimates that the top 50 publicly traded software companies spend in excess of $8B for cloud services (~50% of revenue)

Risk of Censorship

Control also leads to censorship risks

The major cloud providers can ban anyone they want, at any time and for any reason

This may be an even bigger threat to Web 3, as over 2/3rds of Ethereum and Solana nodes are hosted by major cloud providers

Underutilized Resources - Finally, the Cloud is woefully inefficient While there are over 8 million data centers in the world, most operate well below capacity (it is estimated that 30% to 85% of servers are underutilized)

Solution

$AKT is solving this problem with a decentralized marketplace for cloud computing Anyone can be a customer And anyone with sufficient hardware – including individuals or the 8.4M underutilized data centers – can join and sell their computing power for cash

Often called the “AirBnB” for cloud computing, $AKT is poised to break the stranglehold that “Big Tech” has on computing resources

The network is cheaper, more reliable, more efficient and – most importantly – highly resistant to censorship

Akash can be used for a variety of services such as: • Middleware • Validators • #DAO websites • Gaming • Mining

How does Akash Work?

Akash operates a two-sided marketplace with two key stakeholders: • Tenants: Customers seeking computing resources • Providers: Data centers (or any person with compute & storage capacity) that can provide computing resources

Market

The global market for cloud compute is expected to rise from $380 billion in 2021 to $1.6 trillion in 2030

Competition

Centralized storage and compute is currently dominated by the “Big 4” cloud providers – Amazon AWS, Google Cloud, Microsoft Azure and Alibaba

Benefits

$AKT offers several benefits compared to traditional cloud providers. It is

• Cheaper

• Censorship resistant

• More reliable

• Private

• Flexible

Cheaper

AKT is significantly cheaper than AWS, Google Cloud Platform (GCP), or Microsoft's Azure, with a cost savings of up to 80-90%.

Censorship Resistant

Unlike AWS, who can “deplatform” apps that violate their terms of service, Akash can’t censor or ban any user for any reason

More reliable

Decentralized networks are more resilient to crashes and outages If one data center goes down, Akash can simply switch to another

Privacy

Tenants can choose to remain anonymous. This is important because if a deployment is hacked, critical information will be protected Customers also aren’t forced to use a credit card, which is ideal for DAOs

Flexible

Akash customers can select data centers based on their needs

For instance, a gaming dapp may want to use a cheaper, but less secure provider, while a DeFi protocol may opt for higher security

Traction

AKT currently has over 40 active providers representing 409 leases This number has grown 288% in the last 18 months (or 20% per quarter)

Projects

Notable projects powered by #AKT include Anonstake, Blockless, Praetor, HNS Search, Chia Network, Cosmos Directory, Third Web and Juno Network

Team

Akash is a part of Overclock Labs, which is headquarted in San Francisco and lists 91 employees on LinkedIn

Notable team members include CEO @gregosuri, CTO @abozanich, COO @boz_menzalji and CFO @LeChenghiskhan

Tokenomics

$AKT is the native token of Akash It has a circulating supply of 113.9M and total supply of 388.5M Below we will cover $AKT ’s:

• Usage

• Initial distribution

• Emissions schedule

$AKT is a utility and governance token with several uses

• Fees: Transaction fees and block rewards are denominated in $AKT

• Governance: The token is used for governance Tenants can also choose to settle leases with $AKT

Initial Distribution

Akash distributed 100M tokens in its 2020 launch to the public, investors, team, foundation, ecosystem, testnet and select vendors These tokens have a 3-year unlock schedule which is shown below:

Emissions Schedule

AKT is an inflationary token with a capped supply of 388.5M tokens Inflation started at 4.5% per month and gradually decreases over time An expected emissions schedule for the decade is below

Potential Valuation

If Akash achieves its ultimate goal of capturing 1% of the $1.6 trillion cloud computing industry, that would imply an FDV of $16 billion

That’s a 200x increase over the networks FDV value today!

Untapped Potential

$AKT offers numerous benefits to users

When compared to the Cloud, it’s cheaper, more reliable, more flexible, censorship resistant and private

While these are boon to dapps, there may be an even bigger potential for $AKT that few are discussing…

Akash is currently building out its GPU network, which could have massive ramifications for the protocol

Not only are GPUs the primary tool for AI (ML and DL), but they are also used in rendering, gaming, IOT, zero knowledge proofs and a variety of industrial applications

This represents a massive opportunity for $AKT as many of these use cases have potential values in the tens of trillions! (e.g. AI alone is expected to be worth $80T)

A successful entrance into any one of these spaces could increase $AKTs value by orders of magnitude

If you want to learn more about AKT, I suggest following:

@ovrclk_

@nirajhodler

@akashians_

@cloudmosio

@johnniecosmos

@praetor_app

Please tag anyone I missed!

Note: This is obviously not financial or investment advice nor a recommendation to purchase AKT It’s just a few thoughts on how things could potentially play out Like with any forecast, it’s a guess at best, and just as many things could go wrong and drive the price to $0

I hope you've found this thread helpful. Follow me @MTorygreen for more fundamental analysis on Web3 protocols.