Proposal: Maintain Current Market Making Liquidity and Depth

Summary

This proposal requests 1,000,000 AKT from the Community Pool to continue market-making operations for the Akash Network in the form of a loan. Sustained downward price pressure over recent months has drawn down the liquidity originally funded through Proposal 280, and additional tokens are needed to maintain healthy exchange liquidity. There will be no additional sell pressure placed on AKT from the transaction.

Current Status (Follow-Up to Prop 280)

Market making has historically been done by Overclock Labs and the Decentralized Cloud Foundation. Overclock Labs has deployed 5,715,090 AKT across four counterparties to support exchanges across the world.

AKT currently deployed with market makers:

Counterparty	AKT Outstanding
Counterparty 1	2,749,890.00
Counterparty 2	1,776,000.00
Counterparty 3	1,000,000.00
Counterparty 4	965,200.00

The decline in AKT price has reduced the USD value of deployed positions, meaning more tokens are required to maintain equivalent market depth across exchanges. It is anticipated that contracts will be renewed with counterparties as they complete their current terms, ensuring continuity of liquidity operations.

As we renew and renegotiate these market-making arrangements, a key focus will be ensuring diversification and preventing undue centralization of liquidity in any single counterparty. This approach is essential for mitigating risk and maintaining a resilient market structure across all supported exchanges, promoting overall network health and decentralization goals.

Market Impact

Market makers use the loaned AKT to place orders on both sides of the book. The depth they can provide is a function of the USD value of their inventory. So when AKT was at $2, a market maker with 1M AKT could place $500K/250k AKT (25% of the AKT) of sell-side depth across the book and still have plenty of inventory to rotate. At $0.35, that same active inventory contracts to around $88k. The buy side is even more constrained because they need USDC to place bids, and the proceeds from selling AKT at lower prices generate proportionally less.

This replenishment mechanism is designed to prevent downward price pressure by directly enhancing liquidity and depth. Since the tokens are loaned and used to maintain depth on both the buy and sell sides, the action itself does not introduce a net selling imbalance to the market.

Replenishing the token inventory will strengthen market liquidity and depth, creating a more attractive environment for new buyers and institutional participants. By enhancing both the buy and sell sides of the order book, the mechanism prevents higher slippage and supports stable price discovery. Since the tokens are loaned for this purpose, this action positively enhances liquidity without introducing a net selling imbalance to the market.

Depth and Spread Data

Through the end of 2025, market makers maintained consistent 2% depth across all supported exchanges, even as AKT's price declined from its May 2024 levels. Aggregate two-sided depth at the 2% level averaged between $500K–$800K per month, with spreads holding steady around 20bps. This is a result of additional market making activities performed by Overclock Labs. Additional funding for market making activities will ensure that markets remain liquid with appropriate depth.

Request: 1,000,000 AKT

Overclock Labs is requesting AKT from the Community Pool to replenish market-making inventory and sustain ongoing liquidity operations.

Market-making structure(s): Loan-call option model

Duration: 12-24 months. Depending on the structure and strategy, durations can vary. A novel strategy, for example, might call for shorter durations due to the strategy’s constraints.