Research Summary
The report discusses Arweave’s development of a next-generation L1, AO, also known as “the hyper parallel computer”. AO is a parallelised chain aiming to achieve web 2-like scalability while maintaining the trust minimisation of a distributed system. The report also highlights the unique distribution approach of AO tokens and the potential AI-related use cases that could emerge from this development.
Key Takeaways
Arweave’s Next-Generation L1: AO
- Development of AO: Arweave, known for its work on decentralised storage, is developing a next-generation L1, AO. AO is a parallelised chain that aims to achieve web 2-like scalability while maintaining the trust minimisation of a distributed system.
- Performance Expectations: Some commentators suggest that AO’s design could yield better results than current next-gen L1s like Solana, Aptos, and Sui, and offer similar performance to Web 2 architectures.
AO’s Interaction with Arweave
- Data Interaction: AO will be able to read and write data from Arweave itself. Since AO launched on testnet, data stored on Arweave has almost doubled on a weekly basis.
- Potential Use Cases: The combination of compute and storage in AO and Arweave could lead to interesting use cases, such as running LLMs in a decentralised manner, which hasn’t previously been possible.
AO Token Distribution
- Community Distribution: The AO token, used to secure message passing on the network, is being distributed 100% to the community. The distribution follows Bitcoin’s economic model with a halving mechanic.
- Token Minting: 33.3% of AO tokens are being minted to AR holders and 66.6% is minted for bridging assets into AO. These AO tokens will remain locked until ~15% of the supply has been minted, which is expected to occur on February 8th, 2025.
StETH Deposits
- StETH Deposits: The distribution mechanism has been successful so far, with 174k stETH or almost $600m depositing to earn AO. This can be tracked on the Pre Bridge contract on parsec.
Actionable Insights
- Monitor AO’s Development: Given the potential of AO to achieve web 2-like scalability while maintaining the trust minimisation of a distributed system, it would be beneficial to keep an eye on its development and performance.
- Explore Potential Use Cases: The combination of compute and storage in AO and Arweave could lead to new use cases. Exploring these possibilities could provide insights into the future applications of this technology.
- Track AO Token Distribution: With the unique distribution approach of AO tokens, tracking the distribution and minting process could provide valuable insights into the token’s potential value and impact on the market.
