Akash - FUD and AKT Stablecoin Updates
Changes Coming for AKT Token.
The Akash team held a Twitter Spaces chat recently, with the purpose of addressing FUD around the token release schedule. The reason for this is that there has been some persistent FUD being thrown at the team around the performance of the AKT price following a large token unlock for early backers and team last year. With the next unlock happening, the team chose to talk in detail about the release and address the FUD.
What did we learn.
When AKT launched, there was no access to DEX's like Osmosis at the time. When designing their tokenomics in 2019, their exchange partner at the time basically strongarmed the team into the unlock schedule. During this twitter space chat, the founder Greg Osuri states that he wasn't a fan of this release schedule, but the exchange (which he did not name) insisted. The most unfortunate part of all this is that the exchange did not even end up listing Akash.
In hindsight, the team if they were launching now would adopt a continuous release schedule for these locked tokens, rather than periodic large unlocks. The team acknowledged that some of the FUD around the release came from a lack of clarity around the unlocks. They did release the schedule from the start, but it was hard to find and disappeared from the website for a while. They also noted that there is other competing projects that have seized on the opportunity to FUD AKT in social channels, even noting a project called FLUX that actually payed people out of the community pool to FUD AKT.
The team on the call reacted quite strongly to suggestions that the team unlocks were dumped on the market so the team could all go buy Lambo's. These suggestions were strongly refuted. The team have contacted their investors that are getting unlocked, and working through their plans on whether they are selling and look at ways to minimize the impact, even to the point of offering OTC options and possibly even buying some of the tokens themselves to minimize any potential drop.
Lastly, the team feel that when the last unlock occurred, it was around the time the market turned bearish, and the Akash product was not fully developed and this contributed to the decline in the token.
My personal thought also around the decline in price is that all these factors are broadly accurate. An additional factor I think is that many AKT holders built their stake, and once Osmosis launched AKT was a big early component there. AKT became attractive so AKT pumped, and then once people established their positions, then AKT staking rewards where being regularly traded to other tokens.
New updates - Stablecoin?
The team then looked at the utility of AKT as a token. Basically, it was designed as a Governance and staking reward token, and a utility token as the token used on the cloud compute marketplace. The big news I took from this call is that AKT is changing. Recognizing that having a volatile token and multiple token options for settlement has lead to lower utilization of their service.
Users have been asking for stablecoin payments rather than a volatile token payment structure. AKT becomes the reserve currency for a new stable coin. AKT will become a Burn to mint token, along with the existing use cases. Once this update happens (important to note that no timeline was given) then cloud compute and services on Akash network will be payed in this stablecoin. The team indicated that it should be relatively soon, as they are using a very similar model to the Helium project.
Personally, I am pretty excited about this development. Building out a niche stablecoin specific to Akash brings a lot more value to the AKT token than the easier option which would be enabling UST payments. UST payments via IBC would be very straightforward to implement, but that does not bring the value capture back to AKT. Niche stable coins seem to be a growing trend these days, with AKT's move seeming like the best option for the project to me.
Supermini.
The team responded to questions about the Supermini device. Originally, it was planned for this device to be available and run as home based cloud computing providers. These devices have been postponed, with it clear that they would not be profitable in the current market.
Conclusion.
Overall, I think the move to introduce a native stablecoin to the network will be very beneficial to the AKT token. Adoption of the platform has been hampered by having payments in a volatile token. Streamlining this with a stablecoin makes the platform more attractive for price stability. Utilizing UST would have been an easy option, but would not have added any value to the AKT token. Adopting the mint and burn, algo stablecoin model makes sense, and captures value for AKT in a superior manner.
The discussions around token unlocks were also valuable I feel. It's easy for people to throw FUD at a project, especially given that many may be holding a bag that has dropped in value in the short term. My view of Akash has always been a very long term view. It may be years before the wave of adoption hits and the token price reflects its full potential. FUD doesn't help in the short term, and the team tackling it head on is reassuring.
Overall, I am still bullish on AKT in the long run. I am very pleased with the addition of a mint and burn stablecoin, and look forward to building my AKT holdings over the coming months to position for the long run growth and adoption that I feel will come.
No financial advice here, please do your own research.
Thanks for reading,
JK.
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