Background & Wins

The first Provider Incentive Pilot passed in February 2024 in proposal 246 has brought over 300 total GPUs onto Akash Network and is nearly fully committed. The commitments are broken down by model as follows:

GPU model	Count	Committed Cost	Term (months)
H100	136	$3,437,009.76	12
A100-80	64	$969,907.20	12
RTX 4090	56	$268,622.40	12
A6000	64	$330,777.60	12
V100	8	$3,387.20	12
Storage	-	$65,126.40	12

With these resources, the Overclock Labs Core Team has attracted several premier tenants including Venice.ai, Brev.dev, Prime Intellect, Nous Research, Flock.io, Neural AI, UT Austin, RIT, Morpheus, Thumper, and Nodeshift.

In addition, Akash has integrated models like Meta's Llama-3.1-405B and Nous Research's Hermes 2 LLMs, which have been made available for free on Akash Chat.

Last but not least, the open beta of Akash Chat API launched in August, has served over 100 million daily average tokens.

These integrations and milestones have driven Akash Network's daily network revenue from $1.2k in February to a new peak of $7.4k on October 29.

Expected vs Actual

The first Provider Incentive Pilot originally proposed three approaches. To quickly recap, these were the approaches and their respective motivations:

1. Committed Pool: provide high-quality computing resources by engaging professional providers for at least one year. The program was open to anyone with strict requirements for quality, quantity, reliability, compliance, and support.
2. Liquidity Mining Pool: this model proposed creating homogeneous GPU mining pools based on specific configurations where "mining" rewards would be distributed pro-rata to all participants.
3. Research & Development Pool: This provides a budget that would create a buffer for next-generation GPUs and rapidly evolving AI models

As we near the 9-month mark of proposal 246, the Overclock Labs' Core Team proposes the following:

• Hold off on the Liquidity Mining Pool pending the development of a robust verifiable compute solution like the one proposed here.
• Merge the R&D pool into future Committed Pool proposals to reduce overhead and give the Core Team more flexibility to act quickly to meet demand.

Reporting on PIP01

Link to the public spending report

Average utilization across A100s and H100s has stayed consistently over 50% with peak usage cresting 95%.

Approach

We propose continuing the Committed Pool approach to incentivize providers, all administered by the Pilot Program Administrator (PPA). Anyone can apply to be the PPA, provided they meet the following criteria, which were outlined in the previous pilot:

• Should have extensive experience in managing the community.
• Must possess deep expertise in managing Akash providers.
• Should be publicly known and respected within the Akash Community.
• Should have contributed to the Akash open-source repositories.

Responsibilities:

• Commit time and resources towards administering the program.
• Disclose all payments to the public and maintain a strict record of all payments that are subject to 3rd party audit if necessary.
• Provide server management and support to participants.
• Provide responsible settlement services (AKT to USD) for participants if needed.
• Builds tools for verifying compute.

Provider Incentives Pilot 2

The first Committed Pool under Provider Incentive Pilot 1 has been a success. It brought high-quality computing resources to the Akash Network by engaging 6 high-quality professional compute providers supplying over 300 GPUs.

Provider Incentives Pilot 2 will follow in the footsteps of its predecessor.

Budget & Distribution

Taking into account community feedback, between 5-10% of the total budget will be made available to community providers who meet the following requirements for quality, quantity, reliability, compliance, and support:

• Akash Community Member: Must be a technical member of the Akash Community with experience managing providers on the network for at least 6 months.
• Quality: should operate in a DC or Colocation Center with at least partial power and cooling redundancy.
• Quantity: Must have a minimum of one 8 GPU node of the referenced GPU models and must have persistent storage.
• Reliability: Must have a yearly uptime of at least 99.741%, equivalent to no more than 22 hours of downtime per year. Must have redundancy for storage.
• Support: Must be serviceable without affecting the critical environments. Must be responsive to issues 24/7.

We propose allocating $10,000,000 of the Provider Incentive Pilot 2 budget according to, approximately, the following:

GPU model	Est cost/hr	Quantity	Budget (USD)	Budget (AKT)
H100-80	$2.40	256	$5,375,000	2,239,583
L40s | A100-80	$1.30	256	$2,910,000	1,212,500
MI300	$3.50	8	$230,000	95,833
H200-141	$5.75	8	$400,000	166,667
RTX 4090	$0.45	204	$805,000	335,417
RTX A6000	$0.50	64	$280,000	116,667
Total			$10,000,000	4,166,667

AKT Price as of October 29: $2.40 6-month Volatility buffer: 43.20% (1,800,000) Total Request: 5,966,667 AKT

AKT volatility buffer: This buffer accounts for the historical daily volatility of AKT measured over the last 30 days leading up to October 29, 2024. By providing a more substantial buffer against potential downswings in AKT, we mitigate the need to request any budget shortfalls through subsequent proposals. In the event of excess funds above the US dollar amoun, all remaining AKT will be returned to the community promptly after completing the proposal.

Given the pace of commitment and deployment of funds from the first GPU incentive pilot, this pilot could take 6-9 months to fully deploy in annual contracts. This proposal allocates funds to existing GPU models carried over from PIP01 and either keeps or adds more GPUs in response to demand.

Limited Market Impact & Transparent Reporting

Limited Market Impact

Overclock Labs will custody the requested funds in a new, distinct wallet so that funds from any other source are not commingled.

All funds will be liquidated and managed in a manner that ensures minimal impact on the market. These funds will be managed with the same care and attention as all previous Community Funding Proposals with liquidations done in a fashion that will not adversely affect the market. In practice, the effort of this liquidation will add depth to the AKT market for buyers looking to enter.

Transparent Reporting

All costs and records will be made publicly available through reports to ensure maximum transparency and accountability.

Support & Expenses

The PPA will be responsible for technical and logistical support ranging from server management and settlement services (AKT to USD) to building and managing tools necessary for verifying compute resources.

Expenses incurred will include, but are not limited to: transaction and settlement fees, support and bounties paid to insiders or vendors, applicable taxes, and software.

At the end of this program, just as was done with PIP01, all revenue collected by the Akash Network Core Team, net of expenses, will be returned to the Community Pool.