Akash Network (AKT): A Decentralized Cloud for DeFi

What Is the Akash Network?

The Akash Network is a decentralized cloud computing marketplace targeted toward decentralized application (dApp) developers in the decentralized finance (DeFi) space, as well as other high-computing, high-growth fields like machine learning. Akash exists as part of the Cosmos Hub, which situates the project within a wide landscape of distinct blockchain networks and allows it to service many different development platforms. As a decentralized marketplace, Akash Network seeks to democratize the power of cloud computing and, in doing so, provide more flexible cloud services with lower costs to end users. Akash Network works closely alongside existing cloud service provider giants, and seeks to add a more equitable and efficient approach to the cloud computing industry.

To understand the Akash Network’s unique approach to decentralized cloud computing, it’s important first to understand the traditional cloud computing model that it seeks to improve on.

Traditional cloud computing refers to the deployment of computing resources (usually in the form of data storage and processing power) that are made available on-demand on the web using a pay-as-you-go service model. The majority of cloud computing providers are subsidiaries of bonafide tech giants that dominate the cloud computing market, accounting for about 70% of the total market share as of 2021.

Cloud service providers allow developers to launch their applications more quickly, without worrying about setting up and managing servers, but customers typically have limited options in terms of providers and functionality. Studies have shown that many developers settle for fixed amounts of hosting space that remain under-utilized, resulting in a hefty  — and in many cases, unnecessary — premium paid for cloud services.

In contrast, Akash Network represents a decentralized version of the cloud hosting model, affording a quicker, cheaper experience for developers. Around 85% of Akash Network’s cloud computing is leveraged from under-utilized data centers that already exist. By allowing existing cloud service providers to sell their excess capacity on the Akash Network marketplace, providers can compete with one another for workloads, which can ultimately lower the costs for developers, as well as for end users of the developed products and services.

Akash Network also strives to maintain a flexible and efficient model where developers and their businesses can simply pay for what they need when they need it. This model avoids the inflexibility that’s common among direct agreements for fixed amounts of server capacity via traditional cloud service providers.

Akash Network Structure and Business Model

Akash Network presents several key elements that differentiate it from its centralized competitors, including a censorship-resistant and permissionless structure. In contrast to centralized, permissioned cloud computing providers, Akash Network’s decentralized infrastructure is designed to mitigate the undue control or influence of a centralized entity. Its permissionless structure also enables developers to employ its services with fewer restrictions.

Conceptually similar to a decentralized blockchain, Akash Network’s decentralized cloud marketplace draws its security from its widely distributed structure. This overall architecture helps make Akash more resistant to hackers, attacks, and outages that have often plagued large, centralized data centers.

Akash Network allows cloud service providers and clients in need of cloud computing services to link up and enter into lease agreements. This model is generally cheaper, more flexible, and more secure than dealing directly with a single, traditional cloud service provider. Further, anyone (not just giant data centers) can become a cloud provider, which helps in driving additional decentralization in the cloud computing space.

If Akash Network lowers prices so much, why would traditional cloud service providers want to participate? Well, many giant data centers have woefully under-utilized resources and plenty of excess capacity. Akash Network provides a way to capitalize on those idle resources. When traditional cloud service providers have excess capacity, they can sell it on Akash Network’s blockchain-based marketplace to maximize the output of their unused resources. The Akash crypto network also strives for interoperability and boasts compatibility with major existing cloud infrastructure and cloud-based apps, increasing the viability of partnerships for major cloud service providers.

Akash Network Blockchain Structure

Akash Network’s underlying architecture is a Proof-of-Stake (PoS) blockchain built with interoperability in mind using the Cosmos software development kit (SDK), through which it incorporates the Tendermint algorithm’s Byzantine fault-tolerant design. As part of the Cosmos Hub, Akash Network exists in a multi-blockchain ecosystem for increased cross-chain interoperability.

As with many Cosmos-based PoS blockchains, Akash Network utilizes a native utility token — AKT — to help secure the network via staking, and to serve as the network’s default reserve currency across the multi-blockchain ecosystem it’s situated in. In this way, AKT powers the decentralized cloud, or DeCloud, that Akash Network offers, and serves as the native medium of transferring and storing value on the network.

Upon Akash Network’s mainnet 1.0 release in September 2020, there was an initial supply of 100,000,000 pre-mined AKT tokens, and a maximum supply cap of 388,539,008 AKT. The initial supply was divided among investors, the Akash Network foundation, and the team itself. Further, the project underwent a public sale of 1,800,000 AKT. About 75% of the maximum supply of AKT will eventually be distributed as network rewards, with rewards gradually decreasing over time.

Akash Crypto Network Developments

Akash Network launched its mainnet 2.0 in March 2021. Until that point, Akash Network was primarily operating in testnet phases to assess its capabilities prior to launching a live, public release. Its most recent testnet saw hundreds of developers deploy thousands of applications using the decentralized cloud before releasing its 2.0 public mainnet.

Akash Network also sells a miniature supercomputer — dubbed the Supermini — which is marketed as an easy and accessible way for end users to generate passive income by becoming a cloud provider on Akash Network. The device is easily configurable to integrate with Akash Network’s decentralized cloud so users can rent out its capacity and generate AKT tokens — all from the comfort of their own home, as opposed to building a data center. The Supermini is yet another force for decentralizing cloud computing via Akash Network.

With these strides, Akash Network is on its way toward realizing its vision of becoming a decentralized cloud computing marketplace that offers people more efficient and cost-effective data resources while collaborating with established corporations. In this sense, the Akash crypto network seeks to improve on the structure of the cloud computing industry rather than upend it. Given its lofty goal of democratizing cloud storage, many challenges likely lie ahead, but the Akash Network team seems poised to grow and meet them.