Akash (AKT) is a decentralized cloud computing marketplace that facilitates the buying and selling of compute resources. It is an open-source, permissionless protocol that provides an alternative to today’s centralized cloud services (i.e., AWS, Azure, and Google Cloud). Akash aims to leverage the global amount of underutilized server capacity, which can range from 5% to over 30%. The Akash marketplace functions via a reverse auction, giving users the ability to name a price and describe the resources they want for deployments. Akash’s decentralized network of compute providers runs its open-source software and competes to provide resources, often at a fraction of the cost of big cloud providers. Specifically, Akash hosts containers where users can run any cloud-native application (e.g., gaming servers, blockchain nodes, and websites). Akash offers extensive cloud management services like Kubernetes, which can be used for hosting and managing containers.
Akash is a Tendermint-based blockchain built using the Cosmos SDK. Marketplace activity (requests, bids, lease details, etc.) is stored onchain and payments are settled with Akash’s native token (AKT). For a full primer on Akash, refer to our Initiation of Coverage report.
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Key MetricsUsage and Provider AnalysisLeases and RevenueAkash’s marketplace uses a reverse auction, in which users propose a bid that describes the resources they’d like to use for a deployment. When accepted, a lease is opened onchain managing the activity of this relationship.
New leases on Akash show the number of new deals created between users and providers for renting resources on the network. In Q3’24, Akash Network experienced a 41% QoQ decline in new leases, falling from 27,000 in Q2 to 16,000 in Q3. This reduction can likely be attributed to multiple factors that impacted overall activity on the network. One significant element was a shift in focus towards deploying advanced AI models, such as Llama 3.1 and Nous Hermes 3. This emphasis on resource-intensive workloads may have diverted resources and attention from general lease activity, potentially slowing broader network usage.
Additionally, infrastructure costs rose due to the doubling of H100 GPU capacity, which may have led to higher lease prices, making the network less accessible to certain users. The number of active providers also fell from 74 to 61, an 18% decline that limited the network’s supply-side capacity and may have reduced overall deal volume.
The acquisition of Akash’s primary client, Brev.dev, by NVIDIA also introduced some uncertainty. Although this acquisition strengthened NVIDIA's connection to Akash and encouraged potential partnerships, it could have caused hesitation or reallocation among some users awaiting clarity on Brev’s strategic direction within Akash’s decentralized ecosystem.
Active leases on Akash are leases that currently utilize and manage resources on the network. Leases that close are no longer considered active. Despite a decrease in the number of leases and active operators, Akash Network reached a record high in Q3'24 revenue, rising 73% QoQ from $176,000 to $304,000. This growth was primarily driven by increased GPU costs, which pushed the average lease fee from $6.42 to $18.75. While this raised costs and led to fewer new lease contracts, Akash’s strategic partnerships with industry leaders like NVIDIA and Prime Intellect, alongside the deployment of advanced AI models such as Llama 3.1 and Nous Hermes 3, spurred strong demand for high-performance computing. Akash also recorded a 1731% increase in revenue YoY, up from $17,000 to $304,000.
In early August, Akash saw a peak in GPU rentals following Meta’s release of Llama 3.1, a powerful open-source language model requiring substantial GPU resources, including Nvidia A100s, due to its 1.46 million training hours and 405 billion parameters. Akash’s unique ability to deploy this model when others could not, drove GPU demand to record highs.
Average GPU and CPU usage grew by 42% QoQ, although daily active leases fell by 60%, from 1,754 in Q2 to 693. This suggests that existing users are intensifying their use of resources at higher costs, driving Akash’s revenue growth and underscoring the strong demand for AI-driven computing power that requires high-performance infrastructure. Meanwhile, as most of Akash’s partners focus on GPUs, Quasarch Cloud developers on the DeCloud platform, along with builders and validator nodes, are advancing on the CPU compute front. They are positioning themselves as a dedicated distributor of cloud services, powered entirely by Akash’s decentralized infrastructure.
In addition, Akash’s reverse auction pricing model has also enabled operators to prioritize profitable leases and effectively meet AI-centric workload demands, allowing for higher resource bids and supporting the network’s sustained revenue growth.
All Resource ComputeGPUs, CPUs, storage, and RAM are the primary resources available for lease on Akash Network. In Q3, GPU capacity increased by 8.5% QoQ, rising from 387 to 420 units. Despite this addition of only 36 GPUs, GPU usage surged by 42% QoQ, from 4,000 to 5,000 units, indicating heightened demand for GPU power. Conversely, CPU capacity decreased by 8%, from 18,000 to 17,000, yet CPU usage increased, aligning with the strong demand for compute resources overall.
On the other hand, Akash's other resource offerings, storage and RAM, both experienced declines in Q3. Storage usage dropped by 44% QoQ, while RAM usage fell by 8%. Additionally, storage capacity decreased by 16%, and RAM capacity declined by 4%. This drop in usage and capacity suggests that users are shifting their focus towards GPUs and CPUs, reducing demand for storage and RAM as they prioritize high-performance computing for intensive tasks.
GPU ComputeThis sustained demand and effective capacity expansion were further supported by the passing of the Verifiable Compute proposal in Q3, which allocated funds to ensure secure and verified GPU allocation using Trusted Execution Environments (TEEs). This proposal is expected to build confidence among users requiring high-security compute environments, fueling GPU demand on Akash as a reliable resource for decentralized AI workloads. Additionally, key partnerships with industry leaders like NVIDIA and Prime Intellect bolster Akash’s positioning as a top provider of decentralized AI and compute resources, meeting the rising need for trusted, high-performance GPU capacity on the network.
Active ProvidersIn Q2, Akash reached a record daily average of 74 active providers. However, this number dropped to 61 in Q3, an 18% decrease QoQ but still a 45% increase YoY. This reduction in active providers may be due to the increasing costs associated with maintaining provider status on Akash. Rising GPU prices and other operational expenses likely led some providers to exit, while those who remained focused on profitability to meet the growing demand for high-performance compute resources.
Token AnalysisMarket Cap StakingQualitative AnalysisPartnerships and DevelopmentsStrategic Partnerships and Integrations
AI Model Deployment and Infrastructure Expansion
Innovations in Verifiable Hardware for Security and Trust
Some other notable Highlights:
Core development on Akash is approved through token-weighted governance and goes through a structured proposal process. The community can also simply create tools that anyone can use to access Akash. Below are highlights from the Q3 2024 governance initiatives:
Akash Network saw significant developments in Q3, reaching a record revenue of $304,000 (+73% QoQ) despite a 41% decline in new leases, which fell to 16,000. The rise in revenue was largely driven by increased demand for resource-intensive AI workloads, such as Meta’s Llama 3.1, which contributed to higher average lease fees. GPU supply also expanded, with a daily average of 420 units available (+8.5% QoQ), helping to meet the demand for high-performance computing even as infrastructure costs rose. The active provider count decreased by 18%, though Akash maintained its reach across regions like Brazil and Mexico.
Strategic partnerships with NVIDIA (following their acquisition of Akash's partner Brev.dev), Prime Intellect, and Venice.ai illustrate Akash’s role in decentralized AI and compute services. These collaborations enhanced access to GPU resources and facilitated privacy-focused AI applications on Akash’s infrastructure. Governance initiatives this quarter, including inflation adjustments, community support funding, and protocol upgrades, supported both network growth and security improvements.
Looking ahead, Akash’s focus on expanding its compute capacity for AI workloads, integrating hardware security features, and fostering partnerships positions it to meet the growing demand for decentralized AI infrastructure, with a continued role within the Cosmos ecosystem.
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