Interpreting the business models behind the AI concept projects io.net and Aethir, which have been consecutively TGE'd.

Original author: 0xTodd, co-founder of Ebunker (X: @0x_Todd)

Recently, both $IO and $ATH, two AI concept projects, have launched TGE one after another, so I’d like to briefly discuss a few points.

At the end of the day, this is a very classic business model:

First, let’s talk about a scenario. On the left hand, there are some AI startups and rendering companies for games. I’m talking about startups, not those very mature big companies like OpenAI. On the right hand, there are people with a lot of graphics card resources who want to make use of those idle graphics cards, such as 4090, 3090, A100, H100.

AI startups use these idle graphics cards, which can bring benefits to people with graphics cards and offer slightly lower quotes than traditional ones. So, if there is a platform that connects these needs and resources, a classic platform business model is born.

So @ionet and @AethirCloud, these two platforms, have discovered this market opportunity, so they are ready to create platforms to ‘introduce’ idle graphics cards to AI or rendering companies. This is meaningful in itself because these AI companies may not have the ability to purchase a large number of graphics cards on their own.

First of all, these AI companies do not want to buy a large number of graphics cards themselves because the cost is too high. They prefer to be able to rent graphics cards flexibly at any time. Secondly, graphics cards are still scarce internationally, and there are even some embargoes. Therefore, many companies are forced to choose some overseas third-party intermediaries, which also brings a lot of costs and gray areas. Therefore, a decentralized facility is important, which is also the market demand discovered by the IO and Aethir projects.

However, the question of whether the chicken or the egg came first still needs to be resolved. AI startups are willing to join because they need to acknowledge that there are many graphics card resources on the platform, and people with graphics cards are willing to hang them on the platform because they need to believe that there will be many orders.

However, if the platform starts from scratch without many graphics cards and companies, the launch will be very difficult. So, this is also why these companies or platforms need Crypto, because Crypto can help them break this cycle.

IO has chosen a path of starting with ‘chickens’. It doesn’t matter if there are no orders, token subsidies can be used to save up graphics cards first. They have launched an ignition plan, with hundreds of thousands of graphics cards hanging on IO at its peak.

This is also the meaning of the existence of decentralized computing power platforms with token models. Many people may ask, can these coins only serve as subsidies, do they have any meaning or effect in themselves?

Both IO and Aethir have independently chosen a conventional and effective approach. Of course, their future platform supports payment with fiat currency or stablecoins, but they also thoughtfully provide the option to pay with IO tokens or ATH tokens, which can save some fees.

I think this is a very good choice, and it does not force users to use their own Token, while also bringing some functionality to their token. Whether it’s a 2% discount, 3%, 5%, a mosquito’s leg is still meat, which will also encourage users who need to pay to indirectly hold these tokens, regardless of whether it will be realized in the future, this is very good for chip diversification.

In terms of building the ecology, there are some differences in the ideas of IO and Aethir. Aethir has taken another approach, because there are many AI classification platforms now, and as far as I know, there may be no less than 20. So how to gain an advantage in the competition?

Aethir previously sold a virtual mining rig called CheckerNode, and later sold the Edge mining rig. This method is very effective in maintaining the community’s basic position. Because when many people have some sunk costs with you, they will focus more on this community and are not easy to leave.

Whether it’s purchasing virtual mining rig CheckerNode or physical mining rig Edge, once sold, users are not easily migrated to other platforms. Therefore, time and progress are everything in a bull market. Aethir has chosen a strategy similar to enclosure movement, first bringing everyone into the community, which is also a very effective approach.

What is CheckerNode for? So, Aethir assumes a scenario: these idle graphics cards may come from all over the world, which has a disadvantage compared to the machine room, that is, stability may be affected to some extent, which people familiar with network architecture may know.

So it added a new role. Originally, the left hand was the person with demand, and the right hand was the person with equipment. It added a third party, namely the inspector, who constantly checks the working condition of the graphics card and the order processing situation to obtain tokens through inspection.

In tokenomics, ATH leaves part of the Token’s Distribution to the inspectors. CheckerNode is a virtual mining rig, which has allowed many people to join the ecosystem early on, and this is an effective market strategy. The market response has indeed been very good. According to official data, CheckerNode has sold over a billion US dollars on Arb, which is a very strong performance.

At the same time, many people also like real Mining Rigs, so Aethir has launched the Edge Mining Rig. The Edge Mining Rig is a physical Mining Rig that can be purchased and placed at home. This approach is to meet the needs of different customer groups. Some people need virtual Mining Rigs, some need physical Mining Rigs. Aethir has gained a certain advantage in the competition by launching these products.

Both projects are computing power platforms, which will be easier to cooperate with external partners because they will both standardize products like graphics cards in the future. This may also be the reason why GPU computing power standardization companies like Dbunker can cooperate with both companies. Because they are dealing with graphics cards, many people say that graphics cards are the new oil of the era, which is a good analogy. Dealing with such standardized products also allows their scope of cooperation to be larger.

The last difference is that IO is the SOL ecosystem. It is well known that Aptos has also invested in it, so it is very likely to be on Aptos. Aethir, on the other hand, is mainly on Ethereum and Arbitrum. The ATH token is on Ethereum, and CheckerNode is on Arbitrum. So, in terms of the ecosystem, the two projects vaguely have a sense of autonomy and have divided their spheres of influence.

But coincidentally, both projects have their own cooperation, and even have an intimate ‘token swap’, turning the originally vague competition into a harmonious state of Peace & Love.

Finally, the tickers of both projects are also interestingly chosen. IO is the abbreviation of Input & Output of the calculator, and also the classic domain name suffix. ATH is the abbreviation of All Time High, which is a common term in crypto and seems to vaguely imply the difference between the two.

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