Introduction

Aethir is focused on transforming cloud services in fast-growing market verticals such as AI and gaming through decentralized computing. As a Decentralized Physical Infrastructure Network (DePIN), Aethir aggregates idle resources that are globally distributed and makes them available in a peer-to-peer marketplace, offering both scalability and cost-efficiency benefits. This approach also democratizes access to critical infrastructure, achieving network effects via token incentives that drive network growth. 

The cloud computing market, which underpins much of modern IT and AI development, is projected to continue its exponential growth, driven by the increasing need for scalable and flexible computing resources. This market is crucial for the future of IT, as it supports the infrastructure required for artificial intelligence, machine learning, big data analytics, and various other next-generation technologies. The gaming industry, too, is experiencing a parallel surge, with the rise of cloud gaming and the increasing computational demands of high-fidelity, real-time multiplayer experiences pushing the boundaries of current infrastructure.

Aethir’s entrance into these markets is not just timely but also highly strategic. The Total Addressable Market (TAM) for cloud computing alone is really huge, with estimates ranging into the trillions as more businesses migrate to cloud-based solutions and the demand for AI-driven applications soars. Gaming, with its global appeal and ever-increasing player base, represents another substantial market ripe for disruption.

Figure : Cloud TAM

Source: iot – analytics, The case for a $2 trillion addressable public cloud market

Key Takeaways

Decentralized Scalability with Enterprise-Grade Hardware: Aethir leverages a Decentralized Physical Infrastructure Network (DePIN) to aggregate enterprise-grade GPUs from global data centers, enabling scalable and high-performance computing. This approach allows Aethir to dynamically adjust resources to meet surging demands in AI, gaming, and other computationally intensive tasks without being constrained by the limitations of centralized cloud providers.

Exponential Market Growth and Demand: The Decentralized Physical Infrastructure Networks (DePIN) sector is experiencing rapid expansion, with a market capitalization surpassing $32 billion. Aethir is strategically positioned within the GPU-compute subsector, particularly in high-performance computing for AI, cloud gaming, and telecommunications. With the demand for GPU power expected to grow at a compound annual growth rate (CAGR) of 34.8% by 2030, Aethir is well-placed to capitalize on this lucrative market opportunity.

Strategic Positioning in Fragmented Markets: Aethir is uniquely positioned to capitalize on the fragmented AI and cloud gaming markets by offering a decentralized alternative to traditional cloud services. This positioning allows Aethir to tap into niche markets that are underserved by current incumbents, providing tailored solutions that address specific needs in these rapidly growing sectors.

Strong Financial Backing and Strategic Partnerships: Aethir has secured $9 million in funding from a diverse group of investors, including venture capital firms and family offices such as Animoca, Maelstorm Fund, IVC, Framework, Sanctor Capital, and Merit Circle. Aethir has also established key strategic partnerships with industry leaders, including Nvidia through its Inception Program, and Well Link, a major telecommunications company. Further alliances with leading gaming studios and prominent web3 entities like Impossible Finance, Gam3s.gg, and Seedify reinforce Aethir’s strong market positioning.

Innovative Decentralized Cloud Platform: Aethir’s decentralized cloud platform is built on cutting-edge technological advancements, incorporating core back-end infrastructure elements such as Containers, Checkers, and Indexers. These components ensure high-quality, low-latency services and enable the platform to scale efficiently while offering competitive pricing. Aethir’s focus on resource pooling and token economies further enhances its scalability and cost-effectiveness, making it a strong contender in the cloud computing space.

Technical Differentiation through Advanced Innovations: Aethir distinguishes itself from its competitors through several critical technological advancements:

• Flexible Network Access: Aethir offers a range of adaptable network access options, including peer-to-peer connections and server-assisted pathways, which enable it to support a diverse array of operational environments and service requirements. This flexibility extends beyond what traditional cloud solutions typically provide, allowing Aethir to accommodate specialized needs more effectively.
• Dynamic Assessment Framework: The platform employs a transparent and flexible system for assessing container configurations and service quality. This framework is reinforced by “Checkers,” which are responsible for maintaining service reliability and enforcing a rigorous protocol for continuous quality evaluation. This ensures that the platform consistently meets high performance standards, regardless of workload or application complexity.
• Enhanced Resource Allocation: Beyond latency reduction, Aethir dynamically allocates resources based on user demand and geographic location, optimizing overall service delivery. This capability ensures that computational power is efficiently distributed, enhancing both performance and resource utilization.
• Latency Reduction Techniques: Aethir has incorporated state-of-the-art technologies to minimize latency, which is essential for applications requiring real-time processing. Key innovations include advanced predictive modeling, direct GPU video capture, and customized video rendering techniques, all of which work together to reduce latency across various devices and operating systems. Additionally, Aethir’s use of Region of Interest (ROI) encoding and terminal super-resolution further optimizes video and image processing, making it particularly suitable for applications in gaming, AI, and other latency-sensitive fields.

Background and Vision

Aethir was founded in 2021 in Singapore by Mark Rydon and a team of seasoned experts in the cloud infrastructure arena. The inception of Aethir was driven by Rydon’s early career in engineering and his entrepreneurial ventures in biotech, which eventually refocused his attention on infrastructure, particularly cloud-based solutions. The company was established to address the growing needs and challenges in cloud gaming and computing, especially within the context of Web3, where traditional centralized solutions were proving inadequate.

Aethir addresses a critical issue in the current tech landscape: the global scarcity of GPU resources. As AI advances toward Artificial General Intelligence (AGI), the demand for high-performance GPUs has skyrocketed. Major enterprises in AI and technology sectors are in a massive race to secure these resources, specifically targeting high quality GPUs like Nvidia’s H100, which are essential for training and deploying advanced AI models. Unlike other networks in the Web3 space that aggregate consumer-grade GPUs, Aethir focuses only on enterprise-grade GPUs integrated into data centers, ensuring that its network meets the stringent performance and reliability requirements of large-scale AI operations.

Aethir’s goal is to develop and provide Decentralized Cloud Infrastructure (DCI) at scale, aimed at revolutionizing how cloud infrastructure is deployed and utilized, namely in high-demand sectors such as gaming and artificial intelligence (AI). Aethir’s infrastructure is built to overcome the limitations of centralized cloud services, offering a more scalable, secure, and efficient alternative that caters to the dynamic needs of modern enterprises, AI applications, and gaming studios.

The project successfully completed its Pre-A funding round, raising a total of $ 9 million, which pushed the company’s valuation to an impressive $150 million. This huge financial milestone was achieved with the support of prominent global investors including Sanctor Capital, Hashkey, Merit Circle, CitizenX, Mirana Ventures, Animoca Brands, Momentum6, Big Brain Holdings, Builder Capital, Tess Ventures, and Maelstrom, led by Arthur Hayes. The diverse and esteemed investor base underscores strong market confidence in Aethir’s vision and business model.

Figure 1: Crypto VCs supporting the project        

Source: gam3s.gg

Fundraising then followed with 2 more private sales (the first through an IDO on Seedify held between 12 and 13 March 2024, the second on DexCheck Pad between 11 and 13 March) and several public node sales, which took place on different platforms again in March 2024.

Figure : Funding Rounds and Node Sales over time

Source: Crypto Rank

One of Aethir’s notable technological advancements is its participation in the NVIDIA Inception program. This affiliation supports Aethir’s strategic goal of making Web3 cloud solutions more accessible, particularly through GPU services. The partnership with NVIDIA is a significant endorsement of Aethir’s potential to lead in tech innovation within the gaming and AI sectors. Indeed, the Inception program is a support initiative aimed at accelerating startup growth across all stages of development. It provides access to NVIDIA’s latest technical resources, including hardware, software, and cloud credits, along with educational opportunities through the NVIDIA Deep Learning Institute. Startups benefit from unlimited access to developer forums, preferred pricing on products, and networking opportunities with venture capitalists via Inception Capital Connect. The program fosters a community of innovative startups, offering continuous support and resources to help them advance in the competitive tech landscape.

Figure : Aethir joined NVIDIA inception program early November 2023

Source: gam3s.gg

Aethir has formed key partnerships to strengthen its market position and technological capabilities. These include collaborations with GAM3S.GG, a Web3 gaming platform, and Seedify, a leading incubator and launchpad in the Web3 gaming sector. These 2 partnerships are focused on enhancing gaming infrastructure, community engagement, and expanding access to novel gaming worlds. But the work on the BD and marketing side by the team is relentless and over the months has significantly expanded the partnership network. The following is the list of ongoing collaborations:

• NodeOps: an AI-enabled infra that aims to simplify node operations
• Return Entertainment (smart TV gaming platform with a cloud native approach that is available on Samsung TVs in the US)
• Luganodes: institutional-grade staking service provider 
• Easeflow: Node-as-a-service (NaaS) provider
• Io.net: another decentralized GPU network
• CARV: a modular data layer thought for gaming and AI
• Theta Edgecloud: GPU Marketplace
• Meta48: an extended reality (XR) giant with its own metaverse environment
• Grampus: a seasoned gaming title with a broader ecosystem at its back
• Beamable: open and extensible game server platform allowing users to create online games and virtual worlds in few minutes
• Chibi Clash: an extensive AI gaming universe developed by Kuma Games
• Superscale: a software house helping devs to profitably scales games & blockchain apps
• Gameswift: a leading one-stop gaming ecosystem built on OP stack
• Sophon: Zk hyperchain focused on entertainment
• Metagravity: a Web3 company focused on metaverse-scale simulation solutions
• TensorOpera: next-gen cloud service for LLMs & Generative AI designed to empower users to create, scale, and thrive in the AI ecosystem economically and efficiently
• Sequence: All-in-one development platform for web3 games
• Kip Protocol: a Web3 framework designed to revolutionize the creation, management and monetization of decentralized knowledge assets for AI apps
• Magic Eden: the world’s leading multi-chain NFT platform
• Infstones: an advanced, enterprise-grade Platform as a Service (PaaS) blockchain infra provider

Figure 2: The partnerships forged by Aethir are many and cover all strategic market branches for the project

Source: Revelo Intel

Sector Outlook

The transition from on-premise infrastructure to cloud computing and the emergence of Decentralized Physical Infrastructure Networks (DePIN) marks a major transformation in the way computational resources and data storage are handled and implemented.

On-Premises Infrastructure

Initially, businesses operated using on-premises infrastructure, where all servers, storage, and networking hardware were physically located within the company’s own facilities. This approach provided full control over the infrastructure, allowing for custom configurations tailored to specific needs. However, the on-prem model had several drawbacks:

1. High Capital Expenditure: Companies needed to invest heavily in physical hardware, maintenance, and upgrades, leading to significant upfront costs.
2. Scalability Challenges: Scaling up required purchasing and installing additional hardware, which was time-consuming and costly.
3. Limited Flexibility: Adapting to new demands or technological changes was slow, often requiring major overhauls of the existing infrastructure.
4. Operational Complexity: Managing, maintaining, and securing on-premises infrastructure required a dedicated IT team, adding to operational overhead.

Transition to Cloud Computing

The limitations of on-premises infrastructure drove the adoption of cloud computing. Cloud services, provided by companies like AWS, Azure, and Google Cloud, introduced a paradigm shift by offering resources on-demand over the internet. 

Figure 3: Cloud vs On-premise Comparison Chart           

Source: Techvify – software

This transition brought several advantages:

1. Cost Efficiency: Cloud computing shifted the model from capital expenditure (CapEx) to operational expenditure (OpEx), allowing businesses to pay for only the resources they used, with no need for large upfront investments.
2. Scalability and Flexibility: Cloud platforms offered virtually unlimited scalability, allowing businesses to rapidly adjust their resource usage to meet changing demands.
3. Accessibility and Collaboration: With data and applications hosted in the cloud, teams could access resources from anywhere, fostering greater collaboration and flexibility.
4. Managed Services: Cloud providers offered managed services, reducing the operational burden on businesses and allowing them to focus more on their core activities.

However, the centralized nature of cloud services introduced new challenges:

• Vendor Lock-In: Companies often became dependent on a single cloud provider, making it difficult and costly to switch services.
• Security and Privacy Concerns: Storing data in third-party data centers raised issues related to data sovereignty and privacy.
• Environmental Impact: The massive data centers required to support cloud services consumed large amounts of energy, contributing to environmental concerns.

Emergence of DePIN (Decentralized Physical Infrastructure Networks)

As the limitations of centralized cloud computing became apparent, the concept of Decentralized Physical Infrastructure Networks (DePIN) emerged as a new frontier. DePIN represents a decentralized model where computing resources, storage, and even networking are distributed across a network of individual nodes owned by various participants rather than centralized data centers. This approach leverages blockchain and decentralized technologies to create a more resilient and efficient infrastructure.

Advantages of DePIN:

1. Decentralization and Redundancy: Unlike centralized cloud providers, DePINs distribute resources across many independent nodes, reducing the risk of single points of failure and increasing overall network resilience.
2. Cost Efficiency: By utilizing underused or idle resources across a decentralized network, DePINs can offer lower costs compared to traditional cloud services, particularly in terms of resource pricing and overhead.
3. Enhanced Security and Privacy: Data can be stored and processed in a distributed manner, enhancing privacy and reducing the risks associated with centralized data breaches. Additionally, users retain greater control over their data.
4. Empowerment and Accessibility: DePINs democratize access to infrastructure, allowing smaller players to participate in providing or utilizing network resources, thereby fostering innovation and competition.
5. Flexibility and Customization: DePINs offer a more adaptable infrastructure that can be tailored to specific needs without being bound by the constraints of a single provider’s ecosystem.

The sector has shown remarkable volatility in the past 6 months, with its market cap increasing from $13.2 billion at the end of 2023 to an annual peak of $42 billion. Despite current challenges in the altcoin market, the sector’s market cap remains at around $22 billion, underscoring its strong growth potential and resilience even in unfavorable conditions.

Figure 4: The evolution of the total market cap of the DePIN sector.

Source: DePIN Scan

The shift from on-premises to cloud computing addressed many of the challenges of traditional infrastructure but introduced new issues related to centralization. DePIN represents the next evolution, promising to overcome these limitations by decentralizing the infrastructure, thereby enhancing resilience, reducing costs, and fostering a more open and competitive ecosystem.

The Challenges of Existing Cloud Providers

The cloud infrastructure sector’s rapid expansion has led to an oligopolistic market dominated by a few major providers like AWS, Azure, and Google Cloud, creating significant challenges that stifle innovation and limit competition. This centralized control results in high costs for users, particularly small and medium-sized enterprises (SMEs) and startups, which lack the bargaining power to negotiate better terms. The inefficiency of resource utilization is evident, with enterprises often purchasing more cloud resources than necessary, leading to substantial financial waste. Moreover, centralized cloud services often lack the flexibility needed to meet diverse business needs, forcing organizations to adapt their processes to fit standardized offerings. Data sovereignty and privacy concerns arise when data is stored across different regions, complicating compliance with local regulations. Ethical issues in AI and machine learning deployments, such as potential biases and lack of transparency, add another layer of complexity.

The dependence on a single cloud provider increases the risk of vendor lock-in, reducing business agility and making it costly to switch providers. Centralized infrastructures are also more vulnerable to outages and cyber-attacks, posing significant risks to businesses reliant on these services. Finally, the dominance of these major providers hinders the growth of decentralized models like DePIN, which could offer more competitive and resource-efficient alternatives but struggle to gain traction in a market controlled by hyperscalers.

Aethir’s Answer

Aethir addresses several critical challenges in the current cloud infrastructure landscape through its approach to decentralized cloud computing. The following are the key areas where Aethir offers effective solutions:

1. Compute Resource Scarcity and Scalability. Traditional cloud infrastructure faces a growing scarcity of compute resources, especially GPUs needed for AI and high-performance computing (HPC). As AI models grow more complex and the demand for computational power surges, centralized cloud providers struggle to keep up. Aethir tackles this by building a decentralized Physical Infrastructure Network (DePIN) that aggregates enterprise-grade GPUs across global data centers. This model allows Aethir to scale resources dynamically, meeting the rising compute demands without being constrained by the limitations of centralized resource pooling.
2. Reliability and Uptime. Enterprise applications require high reliability, uptime, and consistent performance, which is often difficult to guarantee in decentralized networks that rely on consumer-grade hardware. Aethir addresses this by exclusively integrating enterprise-grade GPUs and infrastructure into its network. This ensures high uptime, reliability, and consistent performance, meeting the stringent requirements of enterprise clients and critical workloads such as AI training and inferencing. The co-location of GPUs within data centers allows Aethir to provide guarantees on performance and operational stability that are comparable to, if not better than, traditional cloud providers.
3. Cost-Efficiency and Resource Optimization. Traditional cloud services often incur high costs due to centralized operations, underutilization of resources, and fixed pricing models. Aethir’s decentralized model promotes cost-efficiency by leveraging competitive pricing and flexible contracts. This decentralized aggregation of resources reduces overhead and enables more efficient utilization of compute power. By avoiding the cost burdens associated with owning hardware, Aethir passes on savings to customers while maintaining high service quality.
4. Accessibility and Democratization of Compute Resources. Access to powerful compute resources is often limited to tech giants and enterprises with substantial capital. Aethir democratizes access to high-performance computing by offering a decentralized platform where enterprises, startups, and even individual users can access top-tier GPU resources. Products like the A-Phone, which utilizes Aethir’s infrastructure to provide high-performance cloud computing to low-end devices, exemplify this democratization. This approach enables wider access to advanced computing, bridging the gap for users and developers who previously could not afford such resources.
5. Fragmentation and Flexibility in the AI and Cloud Market. As the AI landscape evolves, there is a growing need for more flexible and fragmented infrastructure to support diverse AI models and applications. Traditional cloud providers often operate in a rigid and centralized manner, which can be restrictive for emerging AI startups and smaller companies. Aethir’s decentralized infrastructure provides the flexibility to cater to both large-scale and smaller, specialized AI workloads. This flexibility attracts a broader range of clients, from large enterprises needing significant co-located GPU clusters for training to startups seeking cost-effective inferencing solutions.
6. Token Economy and Integration with Web3. Integrating token economies and DeFi into traditional business models poses a challenge for many decentralized cloud solutions. Aethir is developing a novel approach to engaging with both Web2 and Web3 clients, allowing seamless integration without the friction of direct token handling. This approach not only aligns with regulatory requirements but also creates pathways for Web2 businesses to benefit from decentralized infrastructure, driving broader adoption.

The Aethir Tech Stack

Aethir’s Stack is designed to effectively integrate decentralized cloud computing using a sophisticated and dynamic system architecture. 

Figure 5: Aethir’s network structure

Source: Aethir’s Official documentation

The infrastructure is built around five core components:

1. Resource Owners. Individuals or organizations that own GPU hardware and contribute their computing power to the Aethir network. They are fundamental to the operation of the Aethir ecosystem as they provide the necessary resources for the network to function.
2. Aethir Network: This is the central structure of the platform, consisting of three main elements:
   • Containers: These act as hosts for the computational resources provided by the resource owners. They execute tasks like AI processing or game rendering.
   • Checkers: Their job is to verify the quality and reliability of the resources provided, ensuring that they meet the required standards.
   • Indexers: These help match the computational resources with the specific needs of end-users, ensuring that the right resources are allocated for the right tasks.
3. Compute Buyers (Gaming & AI Enterprises): These are the users of the computational power provided by the Aethir network. They leverage these resources on-demand for purposes such as AI model training, inference tasks, and high-performance gaming.
4. Treasury: This component manages the financial aspects of the network, holding staked $ATH tokens and handling the distribution of rewards and fees within the ecosystem.
5. Settlement Layer: Aethir employs blockchain technology, namely, Arbitrum L2, as its settlement layer, ensuring secure and efficient transaction recording. This layer supports network scalability and efficiency while distributing $ATH tokens as incentives, aligning economic interests with network performance and reliability.

Key Roles Within The Aethir Network

The Aethir Network is built on three core back-end infrastructure elements: Containers, Checkers, and Indexers. These components are crucial to the network’s operations and are designed to ensure the effective delivery of computational services.

Figure 6: A closer look at key roles within the network                

Source: Aethir’s Official DOcumentation

Containers for Real-Time Computational Resources: Aethir utilizes containers to deliver real-time computational services, such as rendering games or processing AI tasks. These containers serve as virtual endpoints where intensive computational work is executed, reducing the load on local devices and ensuring a seamless, “zero lag” experience for users. Aethir’s resource pooling innovation allows for the aggregation of distributed computational resources, enabling GPU providers to connect or disconnect as needed. This optimizes resource utilization and allows idle hardware in data centers to contribute during downtimes, leading to competitive pricing for consumers.

Containers are rewarded through two different mechanisms: Readiness and Service. Regarding the former, they earn rewards for maintaining standby status and generally a high state of readiness, such as through Proof of Concept (PoC) incentives. About the latter, compensation is based on actual compute resources effectively used by end users, including Proof of Delivery (PoD) rewards and service fees. These mechanisms aim to align compensation with both readiness and actual service delivery, promoting reliability and network performance.

Figure 7: How Containers fit within the network mechanics

Source: Revelo Intel

The Checker ensures the integrity and performance of containers through rigorous testing at various stages of their lifecycle. For instance, upon registration, a Container undergoes an initial evaluation to verify its specs. During standby, random checks ensure constant readiness. While the Container is active, its performance is closely monitored to maintain service quality. Bad performance compared to Aethir’s quality standards can result in penalties, such as reduced rewards or even slashing of staked tokens.

Figure 8: How the checker works     

Source: Revelo Intel

The Indexer plays a key role in connecting consumers with the most suitable Containers based on factors like latency, technical specifications, and service fees. By decentralizing and randomizing container selection, the Indexer ensures fair and efficient resource allocation. In applications like gaming, the Indexer prioritizes low-latency containers with high frame rates to deliver a smooth user experience. It evaluates Containers based on operational readiness, cost-effectiveness, and performance, ensuring that the best resources are used for each task.

Aethir’s consensus mechanism, Proof of Rendering Work, underpins the quality and reliability of services provided by the network. Every 15 minutes, a random selection of nodes is chosen to validate transactions and ensure service accuracy. Nodes with a higher stake, better service quality, and fewer prior selections have a higher probability of being chosen, similar to how Ethereum validators operate. This system incentivizes high performance and reliability, reinforcing the integrity of the network.

Figure 9: Aethir network consensus mechanism          

Source: Revelo Intel

Layered Ecosystem for Next-Gen Cloud Services

Earth, Atmosphere and Edge are distinct segments of the Aethir decentralized cloud infrastructure network, each tailored for specific high-performance computing applications.

Figure 10: Aethir’s comprehensive solutions

Source: Luganodes, “About Aethir Cloud”

Aethir Earth is a specialized segment of the network that focuses on providing bare metal GPU infrastructure for high-performance tasks like AI model training and machine learning. It operates through a decentralized model, which avoids the limitations of centralized systems by utilizing a globally distributed network of GPU servers. This setup ensures low-latency, high-efficiency computing that is optimized for demanding applications, enhancing resilience and transparency in computational tasks.

Aethir Atmosphere, another segment of the network, is designed instead for cloud gaming and utilizes decentralized GPU infrastructure to provide scalable, real-time rendering solutions. This model democratizes access to high-end gaming experiences by eliminating the need for powerful local hardware and optimizing for low-latency performance through a global network of GPU providers.

The last piece of the puzzle is Aethir Edge, a groundbreaking edge computing device which acts as a standardized container node and allows consumer-grade hardware to be integrated easily (i.e. with a plug & play approach) into the Aethir network. Typically, consumer-grade hardware is not suitable for enterprise workloads due to variability in performance. However, Aethir Edge standardizes these resources, making it possible for consumer devices to handle complex tasks like AI processing or cloud gaming. This approach not only expands the usability of consumer devices but also opens new avenues for leveraging underutilized resources.

Figure 11: device technical specifications

Source: Aethir Edge’s Official blog

An in-depth look at the $ATH token

The $ATH token serves as the cornerstone of the Aethir ecosystem, fulfilling multiple critical roles that drive the platform’s operations, governance, and user engagement. 

Transactions facility: $ATH functions as the primary medium of exchange within the Aethir ecosystem. It is used by participants on the demand side, such as AI developers, gaming companies, and other users, to purchase processing power from node operators. This transactional role is fundamental to the operation of Aethir’s three core business models, as it directly links the consumption of services with the ecosystem’s native token. The seamless integration of $ATH into the payment structure ensures that all network activities are anchored in a unified economic system, enhancing the overall efficiency and cohesion of the platform.

Ecosystem Incentives: As Aethir continues to expand, the $ATH token is designed to play a pivotal role in incentivizing both existing and new participants within the ecosystem. Through partnerships with various projects and integrations, $ATH will be utilized beyond its core transactional utility. For instance, the token will be integrated into merge mining and marketplace functionalities, further broadening its applicability. Projects such as CARV and Rivalz Network are among the partners that have committed a portion of their token supplies to reward $ATH stakers, underscoring the token’s adaptability and long-term relevance within the ecosystem. This growing network of partnerships will help maintain and increase the demand for $ATH, driving its value as more use cases emerge.

Governance Participation: $ATH will also serve a crucial role in the governance of the Aethir ecosystem as it transitions towards a Decentralized Autonomous Organization (DAO). Token holders will be empowered to influence the future direction of the platform through several key mechanisms:

• Proposal Submission: Holders of $ATH can propose new initiatives, changes to the ecosystem, or other strategic actions.
• Discussion and Voting: The Aethir community can engage in discussions and cast votes on these proposals, ensuring that decisions reflect the collective will of the stakeholders. This governance framework ensures that $ATH holders have a direct impact on the evolution of the ecosystem, aligning the platform’s growth with the interests of its users.

$ATH Staking: Staking $ATH tokens is a core function that allows users to actively participate in the Aethir network. By staking, users demonstrate their economic commitment to the network, aligning their interests with the platform’s success. The staking process involves the following steps:

• Token Wrapping: Users convert their $ATH tokens into veATH (voting-escrowed ATH) and stATH tokens. veATH is non-transferable and used for staking, while stATH remains transferable and will have future applications within the ecosystem.
• Pool Selection: Users choose between staking in the Gaming or AI ecosystems. Staking in the Gaming pool provides additional rewards from gaming partners, while the AI pool focuses on rewards from AI-related projects.
• Lock-Up and Rewards: Stakers lock their veATH tokens for a predetermined duration, ranging from 8 days to 4 years. The longer the lock-up period, the higher the potential rewards, thanks to the $ATH Rewards Multiplier and Additional Emissions Multiplier. Rewards are distributed weekly and include both $ATH tokens and additional bonuses from partner projects

Figure 12: $veATH unlocking schedule

Source: Swissborg Academy, “What is Aethir?”

Staking $ATH offers multiple benefits, both for the individual staker and the broader Aethir ecosystem:

• Economic Alignment: Stakers’ interests are directly tied to the success of the network, as their potential rewards depend on the platform’s overall health and growth.
• Security and Integrity: Staked tokens act as collateral, ensuring that node operators adhere to network protocols. In cases of misconduct or failure to meet performance standards, staked tokens can be partially or fully slashed, helping to maintain the integrity of the ecosystem.
• Rewards and Participation: Staking enables participants to earn rewards not only in $ATH but also in partner tokens, increasing their overall return on investment and encouraging continued engagement with the platform.

Conclusion

Aethir addresses the problem of increasing global demand for hardware intensive compute resources driven by advancements in AI and cloud gaming. By focusing on enterprise-grade GPU clusters and leveraging a decentralized Physical Infrastructure Network (DePIN), Aethir provides scalable, low-latency solutions that meet the stringent needs of AI companies and gaming studios. This focus on high-quality infrastructure, coupled with strategic partnerships and a robust business development strategy, has allowed Aethir to carve out a unique position in both Web3 and traditional tech ecosystems.

With a current Annual Recurring Revenue (ARR) of $36 million and a relevant 10% month-over-month growth, Aethir ranks among the top crypto protocols by revenue and positions itself as the most profitable GPU DePIN on the whole market, demonstrating strong market adoption and financial success. The company’s innovative offerings, such as the A-Phone and extensive GPU network, cater to both enterprise grade clients and everyday users, broadening access to unparalleled compute capabilities. Aethir’s entry into NVIDIA Inception further underscores its commitment to leveraging cutting-edge technology and fostering continuous innovation.

Looking forward, Aethir is well-placed to capitalize on the fragmented AI and cloud gaming markets. However, the structure of its tokenomic model, like those of similar networks, raises concerns that could impact long-term sustainability. These concerns stem from the potential for high volatility in token prices, which could destabilize the network’s economic incentives. Additionally, the heavy reliance on continuous token issuance to incentivize participation may lead to inflationary pressures, diminishing the value of the token over time. If the demand for tokens does not keep pace with the increasing supply, it could result in reduced participation and undermine the network’s growth and stability.

Ensuring transparency, balancing supply and demand, and successfully transitioning to a fully decentralized ecosystem will be critical in maintaining its leadership and achieving broader adoption. As the decentralized cloud infrastructure market evolves, Aethir’s ability to address these challenges will be key to its continued success and influence in reshaping the future of computing.

References

Aethir Official Blog. Link

Aethir Official Documentation. Link

“Aethir Research Report” (2024), Impossible Finance, published on their blog. Link

“Unraveling the DePIN Sector” (2023), Ryze Labs, published on Substack. Link

“Aethir Cloud: A decentralized cloud computing infrastructure platform focused on AI and gaming” (2024), Anthonie Meijer, published on Substack. Link

“The GPU Revolution: How Aethir is Reshaping AI and Gaming Infrastructure” (2024), Aylo (@alpha_pls), published on Substack. Link

“Let’s protect our online privacy by decentralized cloud services” (2022), Marcel Ohrenschall, published on Substack. Link

Disclosures

Revelo Intel is engaged in a commercial relationship with Aethir and this report was commissioned as part of that engagement.

Members of the Revelo Intel team, including those directly involved in the analysis above, may have positions in the tokens discussed.

This content is provided for educational purposes only and does not constitute financial or investment advice. You should do your own research and only invest what you can afford to lose. Revelo Intel is a research platform and not an investment or financial advisor.