On 10.01.2022, Staking Rewards’ Co-Founder Mirko Schmiedl sat down with the Founder and CEO of Akash, Greg Osuri. Greg is a die-hard Cloud Software Architect, who describes himself as an Entrepreneur, Citizen, Optimist, and Distributed Systems Nerd. Inspired by the closed, competitive moat of web 2.0 cloud services, he started Akash in 2017 to create an open market for cloud services; the first decentralized and open-source cloud.
Highlights of the interview.
- How Akash is positioned to challenge the cloud computing market dominated by AWS and GCloud
- How stakers & node providers can participate and utilize Akash
- Why Akash has one of the highest staking rates in the industry (30%+)
- Decentralized cloud computing vs cloud storage
- Akash roadmap and big vision
In this written summary of the conversation, we recap the key takeaways concisely.
If you would like to experience the nuances of the conversation, make sure to watch the full 1:44hr video interview on YouTube.
Like every episode of Staking Mondays, we start with some punchy lightning round questions.
Greg invested in $ATOM when Tendermint released the Cosmos Hub in 2016/2017.
Greg was inspired by a lot of people who make crypto special for him. Those include Hal Finney, Vitalik Buterin, and Jae Kwon (Founder of Cosmos/Tendermint). Greg highlighted Stefan Thomas (former CTO of Ripple), who is a good friend of him and helped him a lot over the years. Also, Anatoly Yakavenko (Co-Founder of Solana), whose work solidified his faith in Proof of Stake since 2018.
Greg finds projects like Sia, Arweave, and Handshake very exciting. He rates Sia’s user experience as phenomenal and is excited about many upcoming cloud computing projects on the Cosmos hub due to their interoperability. Greg also uses DVPN, the decentralized VPN project on Cosmos.
Let’s dive deep into the Akash network.
Greg has been working in the cloud industry since 2008 and designed Kaiser Permanente’s first cloud infrastructure. When AWS first launched, Greg was optimistic about its developer-first ethos, but soon noticed that it lost touch with developers; pricing became opaque and created a closed competitive moat with web 2.0 cloud services companies.
Most shockingly, Greg talks about Amazon’s practice of repurposing open-source software as part of their paid suite of add-ons, a morally questionable step in expanding their empire. Seeing this shift in the paradigm of cloud computing, Greg set out on his quest to develop an easy-to-use and easy-to-scale system.
This quest culminated in his idea of Edge computing, where users can use any data centre as a cloud provider. This reduced the latency between data centres and users as they were able to use centres closer to the user, a non-negotiable for high-speed applications.
Greg still faced the challenge of keeping the data in sync, which is where the distributed ledger technology of blockchains came in. Thus, a complete solution was found and Greg, along with the other members of his team, built Akash in 2017 — an open-source cloud computing marketplace, with a vision of utilizing 85% of the unused computing power in data centres all over the world.
In Greg’s own experience, Akash is very reliable, and it has inbuilt fault tolerance. Whenever he sees some website crashing due to extra loads, it instantly comes back up. This is because the data is synced between multiple data centers, which forms the basis of Akash’s reliable decentralized network. Backing this up is that since the March 2021 launch, Akash has never gone down once, while AWS has gone down 50 times during the same time period.
Akash is optimized for composability on top of which usability can be built. So, Greg believes that the complexity of building on Akash will reduce with time as usability and integrations with other decentralized cloud projects increase.
Greg mentioned that providing managed services in a decentralized manner is a challenge. Akash’s intent is to provide 300+ managed services in the smooth and seamless way that AWS and GCloud provide today. Greg desires to build Akash with a mindset of developer first, open marketplace, and focusing on the user.
When all of these things will be achieved, then Akash will start to challenge and win market share from its Web 2 counterparts. He stated that Akash has a distinct advantage against AWS and GCloud in Akash’s permissionless nature, empowering any developer to innovate with zero restriction and without Akash’s permission.
Greg aims at facilitating the open-source software creators(on top of which AWS runs its cloud), who logically are better equipped to provide these managed services than AWS. He and his team are working on designing a system that will incentivize these creators to participate in providing these services openly. Greg wants to see this kind of system running at the end of 2022 and thinks that it will be a game-changer.
Greg and his team are currently focused on perfecting the solo container run time service on Akash, which is the foundation of any successful cloud system. (In layman’s terms, container runtimes are responsible for loading container images from a repository, monitoring local system resources, and managing container lifecycle)
Greg informed that Akash’s model doesn’t have permanent cloud storage in its design, it stores very small amounts of data only during the lease period. He plans to work through this problem by partnering with decentralized cloud providers such as Sia, Filecoin, and Arweave for cloud storage. Greg aspires to build a system in the future, where users can pay using any one of the tokens of integrated projects, thus reducing the complexity of payment.
At the full success state of Akash, users of Akash won’t know that they are using Akash. Greg inspires to reduce the cost of computing by using computing power in house devices, cars, and gaming consoles. By providing computing power with the use of GPUs in these devices, a person can potentially repay the cost of that device. The end state is when Tesla has Akash installed in it.
Akash is also coming up with a new feature with which you will be able to provide computing power from your phone and earn crypto while doing so.
Akash is betting on this heavily, and with GPUs support coming out, Ethereum miners can repurpose their hardware to run Akash as providers.
On Akash,100+ validators secure the blockchain and earn around 40–45% APR.
Running a Cloud provider is more complex than a validator because they have to increase their capabilities as Akash increases its services like storage and GPUs. They earn $AKT on the basis of the amount and type of cloud services they provide.
Akash is working on an incentivized model where a lack of demand for cloud services can be compensated by staking rewards to the cloud provider. Akash has 79 professional cloud providers such as Equinix, Orion, etc.
Akash’s first prototype was built on Ethereum, but due to scalability issues on Ethereum, they had to build their own blockchain. Then the team read the paper on Cosmos-SDK, on top of which blockchains can be easily built from scratch using Tendermint technology.
The idea of composability and the sovereign system as a scaling solution in Cosmos-SDK resonated with them, and Akash decided cosmos-SDK as an ecosystem.
Greg read a paper in 2019 talking about bootstrapping free markets by borrowing from the future and adopted a model in which 389 million $AKT are distributed over 80 years in a decaying fashion with rewards reduced each year. The idea behind that from the team was to incentivize stakers to secure the network.
Greg firmly believes that stakers are a powerful pillar of the whole system, and this tokenomics design will filter out short-term holders from long-term holders. Akash’s team is formulating an incentive model where the volatility of $AKT is mitigated with some stable exchange of value, making $AKT deflationary.
Although not much revenue is generated today, the team wants to incentivize staking in the future with some percentage of hosting fees. They are working through a lot of considerations to capture the value indirectly vs directly because of regulatory implications. For example, a stablecoin that uses $AKT as collateral or a burn/mint mechanism like $LUNA, to make $AKT a store of value.
Akash relies on redundancy rather than trying to prevent faults. It needs a decentralized identity establishment mechanism; that is where auditing attributes will come from. In other words, there is really no way to filter out bad unknown actors, but there is a way to filter out bad known actors.
Greg recommends checking https://akash.network/roadmap for roadmap details. He shared that the big thing that is coming in Feb 2022 is persistence storage, to enable data-heavy applications for running nodes as validators on any layer-1 blockchains. Also, in another 3 to 5 months, GPUs and the IP address marketplace will be ready. The big thing leading up to the end of the year is going to be the decentralized service marketplace.
Akash is hiring at https://akash.network/careers. In Greg’s opinion, the most important thing in the crypto world right now is end-to-end decentralization. He iterated that Akash is great for DAOs. So, if you have a DAO or you are a part of a DAO, he highly encourages you to put a proposal to bring a website or any data services that DAO uses on Akash.
The second thing Akash is very good at is proof of work mining. You can go to https://www.akashlytics.com/price-compare and see that Akash is 80–90% cheaper than AWS and GCloud in pure computing costs. Akash’s goal is to onboard DeFi applications, miners, and DAOs.
A round of community questions from the chat.
According to Greg, Akash needs awareness, simplicity, and easy access in order to attract more DApps and developers.
Greg finds the sample of 8.2 million data centres in the world big enough that it doesn’t compromise the decentralized nature of Akash. Conversely, according to him, it bootstraps network effects, so that eventually an Akash supermini, a phone, a car, or refrigerator can be used for computing.
The Akash team wants to partner with vibrant ecosystem projects. They want to focus on leveraging the relationships with current partners like Polygon, Solana, Helium, etc. Because of the current hurdles to support DApps fully, they don’t want to push new partnerships for the sake of it.
Greg advises learning things the hard way and working in challenging startup-like companies, where there are high chances of failure. The high failure rate will consequently result in a high success rate in the long term.
Greg believes the right price is more important than the lowest price. He paints a future where, for example, if all the servers run on Akash, it will always provide the best price because of its internal competition. Consequently, making all the other cloud providers, in the long run, adjust to the right price.
Refer to https://www.stakingrewards.com/earn/akash/ to know how to stake Akash, the staking APR, and how you can participate in general.