Preface
With the release of technical documentation, testnet token $CRED and multiple memecoins, the AO ecosystem has attracted many active developers and demonstrated broad development potential. In the current rapidly developing field of blockchain technology, the AO protocol has become an ideal platform for large amounts of data processing due to its significant advantages in high concurrency processing and data storage.
After recognizing the project from a value perspective, how should users participate?
By participating in the AO testnet, readers can obtain AO tokens by depositing stETH and preemptively enter the field of decentralized computing. Through this report, you will learn how to participate in AO's staking activities, as well as the core features, development history and future prospects of the AO project, helping you seize the opportunity in the new era of decentralized computing and witness and participate in this transformative technological advancement.
Project Description
1. AO Protocol Overview
AO is a decentralized computing system inspired by the Actor-Oriented Paradigm that can support a large number of parallel processes without the typical limitations of current decentralized computing models. Its features include:
Network verifiability and minimized trust requirements: The architecture is highly modular and easy to integrate with existing smart contract platforms, allowing customization in terms of computing resources, virtual machines, security mechanisms, and payment mechanisms.
2. AO Core Features
Single system image: hosted on a heterogeneous collection of nodes across a distributed network, allowing any number of parallel processes to coordinate through an open messaging layer.
Unlimited resource utilization: Supports computing operations of any size and form while maintaining the verifiability of the network itself.
Modular architecture: Users can choose the virtual machines, messaging security guarantees, and payment options that work best for them.
3. Key functions of the AO protocol
Parallel processes: Supports any number of processes (contracts) running in parallel, inspired by the original actor model and Erlang.
Resource Utilization: Based on the delayed evaluation architecture of SmartWeave and LazyLedger (later called Celestia), nodes can reach consensus on program state transitions without performing any computation.
Data Storage: With Arweave, AO processes can seamlessly load and execute data of any size and write it back to the network.
Automatically activate contracts: Allow contracts to have scheduled “cron” interactions, automatically wake up and perform calculations at set intervals.
4. AO key development nodes
Since AO announced the launch of the testnet on February 27, 2024, the market has responded enthusiastically, and the price of AR coins has risen sharply, attracting the active participation of thousands of developers and a large number of users. The release of the technical documentation Cookbook and the testnet token $CRED, as well as the holding of activities such as the AO online hackathon, have further promoted the development and improvement of the AO ecosystem. At present, the AO subnet has launched a full fair release plan for tokens, which is incubated by the AR ecosystem of exchanges such as Binance/OKX, and is defined as a decentralized computing system. The relationship between AR and AO can be roughly understood as Fil and Difinity, which are responsible for storage and high-performance computing scenarios respectively.
Release of the technical documentation Cookbook: including concept explanations, operating principles and development tutorials. The PermaDAO Development Guild participated in the translation and provided English and Chinese versions.
Release the testnet token $CRED: As the native token of the AO testnet, it is obtained by completing bounty tasks.
Hosted AO's online hackathon Hack The Weave Hackathon: an 11-day event with multiple prizes and a total bounty of over $10,000.
Two AO memecoins were launched - $WHAT and $TRUNK: launched by developers and community managers respectively, and support redemption with $CRED in the decentralized exchange Bark.
AO's social media application AO Twitter is gradually being improved: development functions include chat rooms, avatar settings, bookmark collection, etc., and MUD games are planned to be launched in the future.
Participation in AO’s staking activities
So how can you participate in AO’s staking activities? We will explain it to you step by step:
1. Current: Pre-launch stage (staking contract on Ethereum chain)
Staking features: deposit and withdraw at any time, income is calculated every 5 minutes, issued every 24 hours (non-transferable), and more types of assets will continue to be opened for staking.
Waiting for opening: mainnet application stage.
2. Pre-launch phase participation process
How to deposit stETH to get AO
Start time: June 18, 2024 at 11:00 AM ET
Rewards: Rewards are issued once a day, and you may need to wait up to 24 hours to receive the first reward
Steps to Participate
Go to the Minting page on the AO website.
Click the Ethereum tab and connect your Ethereum wallet (Metamask or Rabby).
Enter the Arweave wallet address where you would like to receive AO tokens.
Deposit stETH into the audit contract by entering the amount you wish to provide. (These tokens will remain in a trustless contract on Ethereum and can be withdrawn at any time. If you do not have stETH in your wallet, you will need to exchange other tokens to get some stETH before making a deposit.)
Sign a transaction in your ETH wallet to deposit stETH into the contract.
You will receive AO tokens directly deposited into your designated Arweave wallet.
stETH staking interface Source: AO official website
3. Revenue Estimation
Valuation at launch: By the time of launch on February 8, 2025, the circulation is fixed at 15%. Different APR estimates are made in view of the possibility of a bull market. At the same time, considering the potential appreciation of the AR token itself, the proportion of $AO market value to $AR may be relatively reduced, thus providing a larger APR space.
Influencing factors
Released amount: Refer to the official ratio of $AO to the total pledged funds.
Total stake: Currently around $100 million, but may increase in the future.
4. Follow-up opportunities
Subsequent stages will continue to open up, and after the permissionless ecosystem financing bridge is launched, developers can get corresponding AO token rewards by attracting users to deposit assets in their applications. This provides developers with a permissionless, long-term source of income without applying for grants or external investment.
Permaweb Ecosystem Development Association: A group of organizations and builders will share in the native revenue generated by assets stored in the bridge. Funds will gradually decrease over time, in line with the decay rate of network minting, supporting the bootstrapping of the network while retaining its characteristics of a neutral shared protocol.
Through the above detailed introduction to the staking activities, readers can actually participate in AO's staking plan and enjoy the security and benefits brought by decentralized computing and storage.
Why choose AO to participate and stake?
After our in-depth analysis of AO’s technical composition and working principles, we are looking forward to the unlimited potential brought by its unique advantages in the field of decentralized computing, which will be analyzed in detail in the third part.
technical analysis
1. AO components
The AO system consists of three core units:
1.1 Messenger Unit
Function: Responsible for message communication, passing messages to computing units and coordinating computing output results.
Function: Ensuring efficient information exchange between Actors is the key to parallel processing of the system.
1.2 Scheduler Unit
Function: Responsible for scheduling and message sorting, and uploading messages to Arweave.
Function: Manage the priority and order of messages to ensure the overall coordination of the system and persistent storage of data.
1.3 Compute Unit
Function: Responsible for processing calculations and uploading calculation results to Arweave.
Function: Executes specific computing tasks and is the core computing capability of the system.
2. How AO works
AO is orchestrated through blockchain technology, and each unit can be used as a horizontally scalable subnet to perform a large number of transactions. This design allows the system to achieve high-performance computing and can theoretically provide nearly unlimited computing performance. The key points are:
High concurrency: The Actor model allows a large number of parallel processes to run simultaneously, greatly improving the processing power of the system.
Distributed architecture: Each unit operates independently, but the overall consistency of the system is achieved through coordination of message passing and scheduling units.
Decentralized storage: Arweave is used to permanently store data and computational results, ensuring data security and reliability.
3. AO’s core objectives
AO's core goal is to enable trustless and collaborative computing services without any practical scale limitations. This provides a new paradigm for applications to combine blockchain technology. Compared with other high-performance blockchains such as Solana, Aptos, and Sui, AO has the following advantages:
Large-scale data storage: AO supports the storage of large amounts of data, such as AI models, which gives it a significant advantage when dealing with big data and AI applications.
High concurrent processing: Unlike Ethereum, which can only use a single shared memory space, AO allows any number of parallel processes to run simultaneously and collaborate with other units through message passing without relying on centralized memory space.
4. Comparison between AO and ETH
Comparison between AO and eth Source: WolfDAO
AO Computer and Ethereum EVM each have their own advantages in terms of architecture design, computing model, consensus mechanism, computing logic, redundancy issues, parallel computing and collaboration, and practicality. AO Computer excels in high concurrency, distributed computing, and data storage, and is suitable for application scenarios that require large-scale data processing and high concurrency. However, Ethereum EVM still has important advantages in smart contract execution and Turing completeness, and has been widely used and verified.
Therefore, AO Computer and Ethereum EVM are more like complementary technologies rather than competitors. AO Computer can be a strong supplement to Ethereum and play its unique advantages in specific scenarios, but it is not enough to completely replace Ethereum EVM. In the future, with the continuous development of blockchain technology, AO Computer and Ethereum will continue to play an important role in their respective fields and jointly promote the advancement of decentralized technology.
Token Economics
AO is a subnet of AR Network and plays the role of application layer in its ecosystem. AR currently has a market value of $1,843,104,239 and is listed on all major exchanges such as Binance/OKX (except Coinbase). AO Token ($AO) is distributed entirely through AR holding airdrops and ETH staking.
AO has no ICO/pre-allocation, with a total supply of 21 million, which is halved every 4 years. AO is distributed every 5 minutes, with a monthly distribution of 1.425% of the remaining supply. As of June 13, 2024, the stock of AO is 1.0387 million.
Token Allocation
About 36% (100% in the first 4 months + 33.3% thereafter) of AO tokens are minted over time by Arweave token holders, whose tokens incentivize the security of the AO base layer – Arweave.
Approximately 64% of AO tokens are minted over time to provide external yields and bring assets into AO to incentivize its economic growth.
AO Token distribution structure Source: AO
Distribution
AO Token unlocking and release mode Source: AO
AO will be released starting at 13:00 EST on February 27, 2024, and 1,038,700 $AO before June 18 will be retroactively allocated to $AR Holders.
Retroactive airdrop (completed): 100% AO released from 13:00 EST on February 27, 2024 to 11:00 EST on June 18, 2024 (block 1372724) (the on-chain address holding AR will complete the airdrop based on the balance)
Transition phase: Phase 1 airdrop (starting at 11:00 EST on June 18, 2024)
10% of the total AO supply (315-103.87= 2.1113 million $AO), which will end and unlock AO around February 8, 2025.
AR holding mining: Holding AR on the chain can obtain 33.3% of the total AO allocation, which is allocated according to the percentage of the holding amount to the total AR.
ETH mining: By staking stETH, you can obtain 66.6% of the total AO allocation, which is allocated according to the percentage of staked stETH to the total amount of stETH.
AO Ecosystem Development
AO Ecological Panorama
AO Ecosystem Panorama Composition Source: everpayHQ(x) / ArweaveSCP(x)
From the AO ecological panorama and the main protocol content, the AO ecosystem covers multiple fields and forms a relatively complete blockchain ecosystem. By introducing a wide range of protocols and tools, a multifunctional and interconnected blockchain ecosystem has been built, covering many fields from infrastructure, decentralized finance, social applications, games to prediction markets. Its comprehensive and diversified services can meet the needs of different users and developers, and promote its ecological cycle prosperity and value creation.
Project Benefits
As an emerging project in the field of decentralized computing and decentralized applications (DApps), AO has demonstrated unique advantages and development potential compared to other Layer 1 blockchain projects with its advanced decentralized computing and extensive data storage capabilities.
Risk Analysis
1. Security of Smart Contracts
1.1 Code Quality and Contract Logic
Contract address: https://etherscan.io/address/0xfE08D40Eee53d64936D3128838867c867602665c#code#L1
The audit report shows that AO's smart contract code on the Ethereum chain is of high quality, clear logic, follows best practices, and has no obvious loopholes. This provides a firm guarantee for the technical foundation of the project.
1.2 Key findings and recommendations
Permission control: Currently, it is necessary to more strictly control the access rights of key functions to ensure that only authorized users can perform important operations. Unauthorized access may lead to malicious use of the contract.
Boundary condition processing: Some functions are not sufficient in handling abnormal situations, and boundary condition checks need to be added to ensure the stability of the contract under various abnormal situations.
Dependent library version: It is recommended to use the latest version of the dependent library to prevent security issues caused by known vulnerabilities.
2. Authority Dependence and Trust
2.1 Upgradable Privileges
The upgradeability of the contract is retained, which means that the project party can upgrade and modify the contract at a later stage. Although this design is flexible, it also increases the trust and reliance on the project party. If the project party makes some mistakes or malicious behavior, the security and stability of the contract will be threatened.
2.2 Privileged Functions
The Open Access Supercomputing Foundation can return tokens to their original owners in the event of a security incident. This privilege improves the security of the project in an emergency, but it also reflects a certain degree of centralized control. Under the concept of decentralization, the relationship between this risk and security needs to be weighed.
Summarize
The AO project is highly stable and secure at the technical level, but permission control and boundary condition processing still need to be further strengthened. At the same time, the project party should carefully handle the upgradeable permissions of the contract to avoid a crisis of trust. AO has no private placement or any entity investment quota, and all are released through fair distribution, which has certain advantages in compliance. However, the regulatory environment in countries around the world is becoming increasingly stringent, and projects including AO still need to be closely monitored to ensure continued compliance with local regulations. Its token full fair release plan has been recognized and launched by exchanges such as Binance and OKX, indicating that the project has a good foundation in compliance and market recognition, but it should continue to pay attention to global regulatory trends to ensure that the project is always within the framework of legality and compliance.
Contributors: Mat / Riffi / Sylvia
Editing and proofreading: Punko
Special thanks: Thanks to the above partners for their outstanding contributions to this issue.
