AKT: Akash Network Token & Mining Economics

Greg Osuri, Adam Bozanich∗

Akash Network, Akash Network(Dated: January 31, 2020)

Akash is a marketplace for cloud compute resources which is designed to reduce waste, therebycutting costs for consumers and increasing revenue for providers. This paper covers the economics ofthe Akash Network and introduces the Akash Token (AKT). We describe an economic incentivestructure designed to drive adoption and ensure the economic security of the Akash ecosystem. Wepropose an inflationary mechanism to achieve economic goals. We provide calculations for miningrewards and inflation rates. We also present mechanisms for allowing a multitude of fee tokens.

ACKNOWLEDGMENTS

We thank Sunny Aggarwal (Research Sci-entist, Tendermint), Gautier Marin (Tender-mint), Morgan Thomas (Co-Founder, Kassir),and Brandon Goldman (Frm. Lead Architect,Blockfolio) for providing valuable commentsthat significantly improved the manuscript.

I. INTRODUCTION

Cloud infrastructure is a $32.4 billion indus-try[1] and is predicted to reach $210 billion by2022[2].

By 2021, 94% of all internet applicationsand compute instances are expected to be pro-cessed by Cloud Service Providers (CSP) withonly 6% processed by traditional data cen-ters[3]. The primary driver for this growthis poor utilization rates of IT resources provi-sioned in traditional data centers as no morethan 6% of their maximum computing out-put is delivered on average over the course ofthe year [4], and up to 30% of servers are co-matose[5] – using electricity but delivering nouseful information services.With 8.4 million data centers globally, an

estimated 96% of server capacity underuti-lized, and accelerated global demand for cloud

∗ greg@akash.network, adam@akash.network

computing, the three leading cloud serviceproviders — Amazon Web Services (AWS),Google Cloud, and Microsoft Azure — dom-inate the cloud computing market with 71%market share[1] and this figure is expectedto increase. These providers are complicated,inflexible, restrictive, and come at a high re-curring cost with vendor lock-in agreements[6].Increased cloud usage has made cloud costoptimization the top priority of cloud serviceusers for three consecutive years[7].

Outside of the large incumbent providers, or-ganizations do not have many options for cloudcomputing. Akash aims to create efficiencies inthe cloud hosting market by repurposing com-pute resources that go to waste in the currentmarket.By leveraging a blockchain, Akash intro-

duces decentralization and transparency intoan industry currently controlled by monopolies.The result is that cloud computing becomes acommodity, fueled by competitive free market,available and accessible anywhere in the world,at a fraction of current costs.Akash is the world’s first and only Su-

percloud for serverless computing, enablinganyone with a computer to become a cloudprovider by offering their unused compute cy-cles in a safe and frictionless marketplace.In this paper, we present an economic sys-

tem that uses Akash Network’s native currency,AKT, to achieve economic sovereignty in our

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decentralized computing ecosystem. We alsopropose an inflation design for mitigating in-herent adoption challenges that face an earlymarket economy — lack of sufficient demandfrom the tenants (consumers of computing),which negatively impacts demand due to lackof supply. We also present a mechanism for astable medium of exchange by solving for to-ken volatility, a major challenge for adoptionof decentralized ecosystems.Note: This whitepaper represents a contin-

uous work in progress. We will endeavor tokeep this document current with the latest de-velopment progress. As a result of the ongoingand iterative nature of the Akash developmentprocess, the resulting code and implementa-tion will likely differ from what this paperrepresents.We invite the interested reader to

peruse the Akash GitHub repo athttps://github.com/ovrclk as we continue toopen-source various components of the systemover time.

A. Definitions

Akash Token (AKT): AKT is the nativetoken of the Akash Network. The coreutility of AKT acts as a staking mecha-nism to secure the network and normal-ize compute prices for the marketplaceauction. The amount of AKTs stakedtowards a validator defines the frequencyby which the validator may propose anew block and its weight in votes to com-mit a block. In return for bonding (stak-ing) to a validator, an AKT holder be-comes eligible for block rewards (paid inAKT) as well as a proportion of transac-tion fees and service fees (paid in any ofthe whitelisted tokens).

Validator: Validators secure the Akash net-

work by validating and relaying trans-actions, proposing, verifying and final-izing blocks. There will be a limitedset of validators, initially 64, required tomaintain a high standard of automatedsigning infrastructure. Validators chargedelegators a commission fee in AKT.

Delegator: Delegators are holders of theAKT and use some or all of their to-kens to secure the Akash chain. In re-turn, delegators earn a proportion of thetransaction fee as well as block rewards.

Provider: Providers offer computing cycles(usually unused) on the Akash networkand earn a fee for their contributions.Providers are required to maintain astake in AKT as collateral, proportionalto the hourly income earned; hence, ev-ery provider is a delegator and/or a val-idator.

Tenant: Tenants lease computing cycles of-fered by providers for a market-drivenprice set using a reverse auction process(described in section below).

II. NETWORK OVERVIEW

The Akash Network is a secure, transparent,and decentralized cloud computing market-place that connects those who need computingresources (clients) with those that have com-puting capacity to lease (providers). Akashacts as a supercloud platform providing a uni-fied layer above all providers on the market-place so as to present clients with a singlecloud platform, regardless of which particularprovider they may be using.

Tenants use Akash because of its cost advan-tage, usability, and flexibility to move betweencloud providers, and the performance benefits

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of global deployments. Providers use Akash be-cause it allows them to earn profits from eitherdedicated or temporarily-unused capacity.

A unit of computing (CPU, Memory, Disk)is leased as a container on Akash. A con-tainer [8] is a standard unit of software thatpackages up code and all its dependencies, sothe application runs quickly and reliably fromone computing environment to another. Acontainer image is a lightweight, standalone,executable package of software that includeseverything needed to run an application: code,runtime, system tools, system libraries, andsettings.Any one with a physical machine (ie, com-

puter, server) can slice the machine’s resourcesinto containers using a process called virtual-ization. Docker is a company that provideswidely adopted container virtualization tech-nology, and it is common to refer to contain-ers as “docker images.” The relation betweena physical computer and a container is illus-trated in fig. 1).All marketplace transactions are on the

Akash blockchain. To lease a container, thetenant (developer) requests a deployment byspecifying the type(s) of unit(s), and the quan-tity of each type of unit. To specify a type ofunit, the tenant specifies attributes to match,such as region (e.g. US) or privacy features(e.g. Intel SGX). The tenant also specifies themaximum price they are willing to pay for eachtype of unit.

An order is created in the order book (uponacceptance by a validator).The provider(s) that match all the require-

ments of the order then place a bid by com-peting on price. The provider that bids thelowest amount on the order wins (and matchrequirements), upon which a lease is createdbetween the tenant and the provider for theorder. For every successful lease, a portionof the lease amount (Take Fee) is paid to the

stakers as describe in sec. IVA.

Container Runtime (Docker)

Host Operating System (Linux)

Physical Server (Bare Metal / Cloud VM)

Containerized Applications

App

A

App

B

App

C

App

D

App

E

Figure 1: A simple illustration ofcontainerized applications in relation to the

physical servers

A. Proof of Stake Based Consensus

Akash employs a blockchain secured by aProof-of-Stake consensus model as a Sybil resis-tance mechanism for determining participationin its consensus protocol and implements theTendermint [9] algorithm for Byzantine fault-tolerant consensus. Tendermint was designedto address the speed, scalability, and environ-mental concerns with Proof of Work with thebelow set of properties:

a) Validators take turns producing blocksin a weighted round-robin fashion, mean-ing the algorithm has the ability to seam-lessly change the leader on a per-blockbasis.

b) Strict accountability for Byzantine faultsallows for punishing misbehaving valida-tors and providing economic security forthe network.

Anyone who owns an Akash token can bond(or delegate) their coins and become a valida-

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tor, making the validator set open and permis-sionless. The limited resource of Akash tokensacts as a Sybil prevention mechanism.

Voting power is determined by a validator’sbonded stake (not reputation or real-worldidentity). No single actor can create multiplenodes in order to increase their voting poweras the voting power is proportional to theirbonded stake. Validators are required to posta “security deposit” which can be seized andburned by the protocol in a process known as“slashing”.

These security deposits are locked in abonded account and only released after an“unbonding period” in the event the stakerwishes to unbond. Slashing allows for punish-ing bad actors that are caught causing anyattributable Byzantine faults that harm thewell-functioning the system.

The slashing condition and the respectiveattributable Byzantine faults and punishmentsare beyond the scope of this paper. (For moreinformation on these, please review Akash Net-work Technical White paper).

1. Limits on Number of Validators

Akash’s blockchain is based on Tendermintconsensus which gets slower with more valida-tors due to the increased communication com-plexity. Fortunately, we can support enoughvalidators to make for a robust globally dis-tributed blockchain with very fast transactionconfirmation times, and, as bandwidth, stor-age, and parallel compute capacity increases,we will be able to support more validators inthe future.

On Genesis day, the number of validators Vi

is set to Vi(0) = Vi,0 = 64 and the number ofvalidators at time t year will be:

Vn(t) = dlog2(2t) · Vi,0e (1)

So, in 10 years, there will be Vn(10) = 277validators as illustrated in fig. 2

Figure 2: Number of validators over the years

III. AKT: THE AKASH NETWORKTOKEN

The primary functions of AKT are in stak-ing (which provides security to the network),lease settlement, and in acting as a unit of mea-sure for pricing all currencies supported by themarketplace. Although AKT can be used forsettling transactions in the marketplace, theleases can be settled using a multitude of to-kens as described in later sections of this paper.However, transaction fees and block rewardsare denominated in AKT. The income stak-ers earn is proportional to the tokens stakedand length of staking commitment. That said,AKT performs three main functions: Resolve,Reward, and Reserve.

A. Resolve

Akash relies on a blockchain in which a set ofvalidators vote on proposals. Each proposal isweighed by the proposer’s voting power, which

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is the total tokens they staked and the tokensbonded to them (stakers can delegate votingpower to validators).

B. Reward

Users of AKT stake tokens to subsidize op-erating and capital expenditures. Stakers arerewarded proportional to the number of tokensstaked, the length of lockup time, and the over-all tokens staked in the system. Lockup timescan vary anywhere from one month to oneyear. Flexibility in lockup encourages stakerswho stake for shorter periods (bear markets),in a self-adjusting inflationary system that isdesigned to optimize for lower price pressureduring bear markets.

C. Reserve

Fees on Akash can be settled using a mul-titude of currencies along with AKT. How-ever, the market order book uses Akash Token(AKT) as the reserve currency of the ecosystem.AKT provides a novel settlement option to lockin an exchange rate between AKT and the set-tlement currency. This way, providers andtenants are protected from the price volatilityof AKT expected to result from its low liquid-ity. In this section, we also present a mecha-nism “Transaction Ordering using ConsensusWeighted Median” as described in sec. IVD toestablish exchange rates without the need foran oracle.

IV. SETTLEMENT AND FEES

This section describes various fees incurredby users of Akash Network.

A. Take Fee

For every successful lease, a portion of thelease amount (Take Fee) goes to a Take In-come Pool. The Take Income Pool is later dis-tributed to stakers based on their stake weight(amount staked and time remaining to unlock,described in detail in the following sections).The Take Rate depends on currency used forsettlement. The proposed take rates at Gene-sis when using AKT (TokenTakeRate) is 10%and 20% when any other currency(TakeRate)is used. The TokenTakeRate and TakeRateparameters is subject to community consensusmanaged by the governance.

B. Settlement with Exchange RateLockin

The lease fees are denominated in AKT, butthey can be settled using any whitelisted to-kens. There is an option to lock in an exchangerate between AKT and the settlement currency.This protects providers and tenants from theprice volatility of AKT expected to result fromits low liquidity.For example, suppose a lease is set to

10 AKTs and locks an exchange rate of1 AKT = 0.2 BTC. If the price of AKTdoubles, i.e., 1 AKT = 0.4 BTC, the tenantis required to pay 5 AKT . Conversely, if theprice of BTC doubles while keeping the priceof AKT same, i.e., 1 AKT = 0.1 BTC, thenthe tenant is required to pay 20 AKT .

C. Fees Using a Multitude of Tokens

In order to avoid issues of network abuse(e.g. DOS attacks), all transactions and leaseson Akash are subject to fees. Every transactionhas a specific associated fee, GasLimit, for

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processing the transaction, as long as it doesnot exceed BlockGasLimit.The GasLimit is the amount of gas which

is deducted from the sender’s account balanceto issue a transaction.

Unlike most other blockchain platforms thatrequire fees to be paid in the platform’s nativecryptocurrency, such as Ethereum [10], Bitcoin[11], and Neo [12], Akash accepts a multitudeof tokens for fees. Each validator and provideron Akash can choose to accept any currencyor a combination of currencies as fees.

The resulting transaction fees, minus a net-work tax that goes into a reserve pool, aresplit among validators and delegators basedon their stake (amount and length).

D. Transaction Ordering usingConsensus Weighted Median

In order to prioritize transactions when mul-tiple tokens are used, validators need a mech-anism to determine the relative value of thetransaction fee. For example, let us assumewe had an oracle to inform us that the relativevalue of BTC is 200 AKT, and that of ETH is0.4 AKT. Suppose we have two transactionsof equal gas cost, and the transaction fees onthem are 10 BTC and 6000 ETH, respectively.The first transaction’s fee is equivalent to 2000(10 x 200) AKT and the second transaction’sfee is equivalent to 2400 (6000 x 0.4) AKT. Thesecond transaction will have a higher priority.In order to get these relative values with-

out using an oracle, we can employ a Consen-sus Weighted Median using Localized ValidatorConfiguration [13] mechanism.

In this method, each validator maintains alocal view of the relative values of the tokensin a config file which is periodically updated,and the relative value is achieved by usinga weighted mean, meaning they submit their

“votes” for the value of each token on-chain asa transaction.Lets say for example, there are five

validators {A,B,C,D,E} with powers{0.3, 0.3, 0.1, 0.1, 0.2} respectively. Theysubmit the following votes for their personalviews of each token:

A : AKT = 1,BTC = 0.2B : AKT = 2,BTC = 0.4C : AKT = 12,BTC = 2D : AKT = 4,BTC = 1E : AKT = 1.5,BTC = 0.5These values are stored on-chain in a ordered

list along with their validator that placed thevote.

AKT : [1A, 1.5E, 2B, 4D, 12C]BTC : [0.2A, 0.4B, 0.5E, 1D, 2C]The proposer takes a weighted mean (by

stake) of the votes for each whitelisted tokento determine a consensus relative value of eachtoken, where w̄(xn) = WeightedMean(xn) :

AKT : w̄([1, 0.3], [1.5, 0.2], [2, 0.3], [4, 0.1], [12, 0.1])BTC : w̄([0.2, 0.3], [0.4, 0.2], [0.5, 0.2], [1, 0.1], [2, 0.2])which give us the relative value for each to-

ken: AKT = 2.8 and BTC = 0.58 respectively.

V. TOKEN ECONOMICS ANDINCENTIVES

Providers earn income by selling computingcycles to tenants who lease computing servicesfor a fee. However, in the early days of thenetwork, there is a high chance the providerswill not be able to earn a meaningful incomedue to a lack of sufficient demand from thetenants (consumers of computing), which inturn hurts demand because of lack of supply.To solve this problem, we will incentivize

the providers using inflation by means ofblock rewards until a healthy threshold can beachieved.

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In this section, we describe the economics ofmining and Akash Network’s inflation model.An ideal inflation model should have the fol-lowing properties:

• Early providers can provide services atexponentially lower costs than in themarket outside the network, to acceler-ate adoption.

• The income a provider can earn is pro-portional to the number of tokens theystake.

• The block compensation for a staker isproportional to their staked amount, thetime to unlock and overall locked tokens.

• Stakers are incentivized to stake forlonger periods.

• Short term stakers (such as some bearmarket participants) are also incen-tivized, but they gain a smaller reward.

• To maximize compensation, stakers areincentivized to re-stake their income.

A. Motivation

Akash Network aims to secure early adop-tion by offering exponential cost savings as avalue proposition for tenants, and the efficiencyof a serverless infrastructure as an additionalvalue proposition for tenants and providers.These value propositions are extremely com-pelling, especially for data and compute inten-sive applications such as machine learning.

B. Stake and Bind: Mining Protocol

A provider commits to provide services forat least time T and intends to earn serviceincome r every compensation period Tcomp =1 day. Providers stake Akash tokens s andspecify an unlock time t1, where minimal lock-time t1 − t should not be less than Tmin =

30 days. Additionally, they delegate (votingpower) to validator v by bonding their stakevia BindValidator transaction.

A staker is a delegator and/or a validatorto whom delegators delegate. Every provideris a staker, but not every staker is a provider;there can be stakers who are pure delegatorsproviding no other services, and there can bestakers who are pure validators providing noother services.At any point, a staker can: a) Split their

stake (or any piece of their stake) into twopieces. b) Increase their stake l by addingmore AKT. c) Increase the lock time T , whereT > Tmin.Stakers choose to split their stake because

the compensation is dependent on lock time Lwhich will be addressed in later sections.

C. General Inflation Properties

1. Initial Inflation

If we assume Akash will have the same num-ber of tokens locked as NuCypher [14] andDASH [15]: λ = 60%, then 1 − 40% of thesupply of AKT will be in circulation. Theadjusted inflation rate for inflation, I will be:

I∗ = I

1− λ, (2)

Considering that ZCash [16] had I∗ = 350%(turn around point during the overall bull mar-ket), which makes I = 140% APR, it is rea-sonably safe to set the initial inflation to beI0 = 100% APR (meaning 1/365 per day).

2. Inflation Decay

Assume that all miners have the maximumcompensation rate. We define the inflation

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decay factor (time to halve the inflation rate)to be T1/2 = 2 years in this case. Inflationdepending on the time passed from the Genesist, then looks like:

I(t) = I0 · 2− tT1/2 = I0 exp

[− ln 2 t

T1/2

], (3)

In this case, the dependence of the tokensupply on the time t is:

M(t) = M0+∫ t

0I(t) dt = M0+

I0T1/2

ln 2

[1− 2− t

T1/2

](4)

If we let I0 be the relative inflation rate, thenI0 = i0M0. For 100% APR, i0 = 1 and I0 =M0, which gives us the maximum number oftokens which will ever be created (as illustratedin fig. 3):

Mmax = M(∞) = M0

(1 +

i0T1/2

ln 2

)≈ 3.89M0,

(5)

where M0 is initial number of tokens.

Figure 3: Token supply and tokens lockedover years with an initial inflation of 100%

APR that is halving every 2 years

3. Staking Time and Token Creation

We will reward the full compensation (γ = 1)to the stakers who are committed to stake atleast T1 = 1 year (365 days). Those who stakefor Tmin = 1 month will get close to half thecompensation (γ ≈ 0.54). In general,

γ =(

0.5 + 0.5min(Ti, T1)T1

), (6)

Ti,initial > Tmin, (7)

where the unlocking time Ti means the timeleft to unlock the tokens: Ti = t1− t. t1 is thetime when the tokens will be unlocked, andt is the current time. The initial Ti cannotbe set smaller than Tmin = 1 month, but iteventually becomes smaller than that as timepasses and t gets closer to t1.Shorter stake periods (for lower rewards)

result in a lower daily token emission. Con-sidering that miners will most likely stake forshort periods during a bear market, we canexpect token emission to decline during a bearmarket, which will help to boost the price.Therefore we can expect this mechanism tosupport price stability.The emission half decay time T ∗

1/2 =T1/2/γ

∗, where γ∗ is the mean staking param-eter, is also prolonged when γ < 1. T1/2 pro-longs to 4 years instead of 2 if all stakers haveγ∗ = γ = 0.5.

The total supply over time (eq. 4) at γ∗ 6= 1will then look like:

M(t) = M0

[1 +

i0γ∗T ∗

1/2

ln 2

(1− 2

− tT∗

1/2

)].

(8)

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D. Delegate Pool Distribution

The exponential is a solution of a differentialequation where inflation is proportional to theamount of not yet mined tokens:

I(t) = ln 2T1/2

(Mmax −M(t)) (9)

dM = I(t) dt. (10)

whereM(t) is the current token supply withM(0) = M0 and dt can be equal to the miningperiod (1 day). Each validator can triviallycalculate its dM using few operations usingthe token supply M from the last period. Theamount of mined tokens for the validator poolp in the time t can be calculated according tothe formula:

δmv,t = sv

S

ln 2T1/2

δM(t), (11)

δMt =∑

v

δmv,t, (12)

where sv is the number of tokens boundto the validator’s delegate pool v and S isthe total number of tokens locked. Instead ofcalculating all the sum over v, each validatorcan add their portion δmv,t.

The distribution factor for a delegate boundto pool v is:

κ = 12

(γ

γv+ s

Sv

), (13)

γv is the aggregate stake compensation fac-tor for the pool and Sv is the sum of all tokensbound to the pool.

E. Mining strategies and expectedcompensation

In this section, we look at three possibili-ties: a staker liquidating all the compensationwhile extending the lock time (Liquidate min-ing compensation), a staker adding all the com-pensation to their current stake, and a minerwaiting for their stake to unlock after time T .Each of these possibilities could have differ-ent distributions of γ. Let’s consider γ = 1and γ = 0.5 as the two extreme values of γ.Let’s take the amount of tokens locked to beλ = 60%, as in DASH.

1. Liquidate Mining Compensation

In this scenario, all stakers in the pool areliquidating all their earnings every Tcomp pe-riod. The total amount of tokens staked in thenetwork can be expressed as S = λM . Assumeall the delegators have equal amounts of stakebound to the pool. The amount of stake staysconstant in this case, and equal to mi = s,making mv = sv and γ = γv where, γv is themean staking parameter of the pool. Then,the pool mining rate (i.e. the cumulative poolreward) is:

drv

dt= γv

Sv

λM(t)ln 2T1/2

(Mmax −M(t)) . (14)

When we substitute M(t) from eq. 8 andintegrate over time, we find total pool compen-sation:

rv(t) = Svγ

γ∗λln M(t)

M0, (15)

If ∆rv(t) = rv(t)− C where C is validator’scommission, that brings individual staker’scompensation to be:

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r(t) = κ ·∆rv(t) = 12

(γ

γv+ s

Sv

)·∆rv(t)

(16)If γ = 1 (staking for 1 year) and λ = 60%

(60% of all AKT are staked). With C = 0.1 ·r(t), staker compensation in AKT starts from0.45% per day, or 101.6% during the first yearof staking.We should note that if other miners stake

for less than a year (γ∗ < 1), the inflation ratedecays slower, and the compensation over agiven period will be higher.

Figure 4: Daily compensation over timeassuming 60% tokens locked for lock times of

1 year and 1 month

2. Re-stake mining compensation

Instead of liquidating mining compensation,it could be re-staked into the pool in orderto increase the delegator’s stake. In this case,the actual stake s is constantly increasing withtime:

ds

dt= γ

s

λM(t)ln 2T1/2

(Mmax −M(t)) . (17)

If we substitute S(t) from eq. 8 and solvethis differential equation against s, we get:

s(t) = s(0)[M(t)M0

] γγ∗λ

. (18)

Assuming the validator commission is 1%,if γ = 1 (staking for 1 year+) and λ = 60%(60% of all nodes in the network are staking),delegate compensation in AKT starts from0.45% per day, or s(1)−s(0) = 176.5% duringthe first year of staking.

3. Take mining compensation and spindown

When the node spins down, the staker doesnot extend the time for end of staking t1,and the compensation is constantly decreas-ing as the time left to unlock becomes smallerand smaller, effectively decreasing γ gradu-ally towards 0.5. This is the default behavior.To avoid this, the staker should set t1 largeenough, or increase t1 periodically.

4. FAQ

How many tokens will ever be in exis-tence? We will start with 100 million tokens,and the maximum amount of tokens ever cre-ated will be 389 million, as illustrated in fig. 3

What is the inflation rate? The infla-tion rate will depend on how many short-termminers and long-term miners are working inthe system. Depending on this, the initial in-flation will be between 50% APR (if all minersare very short term) and 100% APR (if all min-ers commit for a long term). The inflation willdecay exponentially every day, halving sometime between 2 years (if all the miners are longterm) and 4 years (if all the miners are shortterm). fig. 5

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Figure 5: Annual inflation over the yearswhen tokens are locked with long and short

commitments

VI. RELATED WORK

The majority of proof of stake networks suchas Ethereum 2.0 [17], Tezos [18], and Cardano[19] all use a single token model. However,there seem to be networks that are experiment-ing with more novel models. In this section, wewill review some of these systems and explorethe differences with Akash’s token model.

A. Cosmos Hub

Akash and Cosmos Hub use Tendermint [9]Consensus Algorithm and share a core set ofvalues with interoperability and user experi-ence. Similar to Cosmos’s Atom [13], AKT’sprimary utility is to provide economic securityto the network. Akash’s model variously im-proves Cosmos’s model. First, AKT provides amechanism to normalize compute prices for themarketplace auction. Secondly, Akash intro-duces a mechanism to lock in an exchange rateto a reserve currency of choice to mitigate mar-ket drive volatility risk of AKT when leasingcomputing for more extended periods. Finally,Akash’s block reward distribution is propor-tional to the time and amount of a stake, unlikeCosmos’s model where the distribution is ho-mogeneous for a fixed time. Cosmos imposes a

21-day “unbonding” period – considered lockup – and there is no incentive to commit formore extended periods. Whereas, stakers inAkash can choose to commit for one month toa year, for which they will receive ~54% and100% compensation respectively.

B. NEO

According to NEO’s white paper [12]:

NEO network has two tokens.NEO representing the right to man-age NEO blockchain and GAS rep-resenting the right to use the NEOBlockchain.

At the surface, NEO’s primary utility is astaking token and GAS is the fee token. How-ever, after closer observation, NEO’s model isvery different from Akash’s model.

Firstly, NEO is used as a mechanism todetermine how many votes each NEO accountgets without a requirement to stake tokens.Each account can vote for as many validatorcandidates as they wish and each validatorcandidate they vote for receives the number ofvotes equivalent to the amount of NEO in thevoter’s account.

With regards to the fee, NEO’s chain onlysupports a single fee token, unlike Akash’smulti-token model. Furthermore, unlikeAkash, NEO does not provide volatility pro-tection for the GAS tokens.

C. EOS

EOS’s delegated proof of stake consensus [20]has similarities with Akash’s model but is ex-tensively different. In EOS, each token holdercan stake their tokens in order to vote for blockproducer and in return, they are rewarded in

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resource units such as CPU, RAM, and NETthat can be spent for transactions on the net-work. However, like in NEO, the staking tokenEOS is not staked by the block producers, andit is not slashable in the case of misbehavior.

In EOS, staking means, stakers are puttingtokens in a lockup period and not necessarilycontributing to the functionality of the net-work. Stakers earn rewards in CPU, RAM, andNET that are used to purchase computationalresources on the network. These resources arenot transferrable. CPU and NET are onlyspendable by the receiver, whereas RAM canbe traded with other users in a Bancor-stylemarketplace [21].EOS burns these resources upon spending,

instead of giving them to block producers. Thevalidator compensation model is unclear, con-sidering transaction fees is not the primarymechanism. EOS is seemingly a single to-ken network, despite having nuances and addi-tional steps.

VII. CONCLUSION

This paper explains the network and min-ing economics of Akash Network and presentsvarious incentives and utilities of different to-kens in the staking and fees mechanisms. TheAkash Token (AKT) acts as staking token andreserve currency for the network while using amultitude of tokens for settlement.

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