Prop 246: Akash Network Provider Incentive Pilot

Summary

After taking into account insightful feedback from the Akash Community in the most active Github Discussion to date, the final version of the Provider Incentive Pilot (PIP) is ready:

*AKT spot price as of 4:30 PM PT on February 1, 2024

This funding proposal ONLY covers Phase 1 and asks for 1,805,054 AKT* from the Community Pool. Phases 2 & 3 will be covered in subsequent funding proposals.

The Akash Network core team is currently focused on finalizing the best available bids from datacenter providers for the required GPU models. Once finalized, the details will be shared with the Akash Community.

The agreements with the datacenter provider(s) will be 1 year, thus ensuring maximum reliability, consistency, and stability for tenants. All revenue earned, net of costs, will be returned to the Community Pool at the end of Phase 1.

Goals

The goal of the committed pool is to provide high-quality computing resources by engaging professional providers, usually tier-2 or higher datacenter operators, who can commit to providing computing power to Akash for at least one year. Information (pricing, specs, and availability) on all compute providers considered for this pool will be shared publicly. The rationale guiding provider selection will also be disclosed to the public. Some advantages are:

• High-quality and reliable compute
• Cost-optimized (No overage)
• Akash Core Team has identified providers that are ready and can go live with short notice Some disadvantages are:
• Fewer participants (providers)
• A smaller sample size means less data to learn from for building on-chain incentives
• Risk of obsolescence

Budget & Distribution

We propose allocating 70% of the Pilot budget that is approximately 1,805,054 AKT* with the following distribution:

Administration

The Pilot Program Administrator (PPA) will be elected by the Akash Network Steering Committee and be responsible for administering the PIP.

Transparent Reporting

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

Limited Market Impact

All funds will be liquidated and managed in a manner that ensures minimal impact on the market. For context, over the last 3 months, the daily average trading volume of AKT has been consistently between 1.5 and 2 million AKT, and phase 1 of this proposal asks for 1,805,054 AKT*. 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. Quite the opposite, the effort of this liquidation will add additional depth to the AKT market for buyers looking to enter.

Support & Expenses

The PPA will be responsible for administering 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 Phase 1, all revenue collected by the Akash Network Core Team, net of expenses, will be returned to the Community Pool.

Next Steps

The following steps are not in chronological order as some will take place concurrently while others sequentially. These are the major next steps:

1. The PPA will make final decisions on bids from datacenter providers, choosing the best bids based on price, quality, and availability. One-year agreements will be signed with one or more datacenter providers. The final quantity, configuration, and price will be shared with the Akash Community.
2. Once this proposal passes, the PPA will work carefully and diligently to liquidate the funds required for payment. Reporting will be made publicly available.
3. Marketing and distribution publishing timelines and availability of all GPU resources will be done to ensure maximum reach.
4. Start preparation to launch Phases 2 & 3 of the PIP.