Rewriting of the AO Protocol Article
The AO protocol is derived from the Arweave network, a decentralized storage network, and pertains to the fundamental regulations and mechanisms governing the Actor-Oriented machine or AO computer.
This innovative protocol functions on top of the Arweave network, ensuring that the network nodes comply with a core data protocol. This compliance allows the AO computer to operate as an exceptionally efficient parallel computing environment. The AO protocol plays a crucial role in storing and retrieving holographic data for every operation within the AO system, establishing a resilient and decentralized computing infrastructure.
The AO protocol is regarded as Arweave’s most ambitious project to date, with AO acting as the computational layer and Arweave as the underlying storage layer. The emergence of AO enhances the entire Arweave ecosystem, offering increased adaptability and functionalities. But how does the AO protocol function and what capabilities does it possess?
Decentralized Parallel Computing Environment
The AO protocol serves as a super parallel computer within a decentralized computing environment, permitting numerous processes (smart contracts in the AO system) to execute concurrently.
At the core of AO's functionality lies its ability to perform verifiable computations of any scale, showcasing high parallel processing capabilities and scalability compared to other blockchain platforms. The AO protocol consists of three main components: the Messenger Unit (MU), Scheduler Unit (SU), and Compute Unit (CU). The MU manages information reception and processing, the SU handles information scheduling and sorting, and the CU is responsible for computation processing.
As a decentralized computing framework, the AO protocol does not store data directly but utilizes Arweave's on-chain storage as a permanent host during operations. AO facilitates the execution of multiple parallel processes simultaneously, enabling coordination through message passing. Within the architecture of AO's parallel computer, AOS operates as a specialized operating system based on this parallel computing model. Developers can create applications in AOS using Lua, the smart contract supporting language also utilized in platforms like Roblox and Minecraft. In the future, processes on AO will be compatible with code compilable to the EVM (Ethereum Virtual Machine), SVM (Solana Virtual Machine), or WASM (WebAssembly) ecosystem, thereby reducing the entry barriers for existing blockchain developers.
Presently, the AO protocol remains on the test network. Despite this, the community has shown significant enthusiasm for this nascent computing system. The AO test network has already transmitted over 211 million messages, with the test network token $AOCRED experiencing nearly a 50x surge at its peak price.
$AO Token Economics
The $AO token, the native token of the AO protocol, was introduced on June 13th, 2024. This token is a pivotal component of a decentralized computing system aimed at revolutionizing decentralized computation.
The AO protocol places emphasis on a fair launch and incentivized token economics to establish a trustless, scalable, and intelligent computation market. Specifically, $AO's distribution mirrors Bitcoin's model with a total of 21 million tokens and a 4-year halving cycle. The allocation of $AO tokens is divided between Arweave token holders (36%) and Bridge staked assets such as stETH and SOL (64%). Both $AR holders and stETH stakers receive a continuous stream of $AO tokens every 5 minutes. The distribution of $AO tokens commenced in February 2024, whereby $AR holders started receiving $AO tokens at five-minute intervals. Notably, $AO tokens will remain non-transferable until their supply reaches 15% of the total, expected in January or February 2025.
Currently, the AO prebridge has attracted over 120,000 staked stETH ($422 million) from more than 1600 depositors. Large on-chain entities demonstrate interest in $AO emissions, with 11 whale depositors individually contributing over 2000 stETH each. Collectively, these entities are responsible for farming over 40% of the total $AO emission.
AO's Role in AI Narrative
The AO protocol is designed to enable trustless and cooperative computing services without practical scalability constraints, paving the way for various applications. Within six months of the testnet launch, AO has cultivated a dynamic ecosystem featuring numerous projects, including prominent ones like ArNS, Autonomous Finance, and PermaDAO.
The AO protocol is engineered with breakthrough features to accelerate AI utilization on its network. According to a post by Sam, AO is capable of supporting: - Full LLMs (Llama 3 and others) within AO smart contracts, capable of executing financial decisions. - WASM64 support providing up to ~18 exabytes of memory at the protocol level. - WeaveDrive feature granting access to Arweave data as a local hard drive within AO operations.
Practically, the AO protocol finds applications in diverse AI scenarios, encompassing machine learning tasks, resource-demanding autonomous agents, intricate financial transactions, and data-intensive applications. These unique attributes position the AO protocol as a formidable player in the convergence of cryptocurrency and AI narratives.
Comparatively, Render network, a renowned AI and computing platform, commands a $3 billion market cap with a fully diluted valuation of $4.2 billion. In contrast, IO, a recently emerged AI and DePIN platform, boasts a $373 million market cap with a $3.1 billion fully diluted valuation. Considering Arweave ($AR) has a fully diluted valuation of $1.8 billion, the AO protocol emerges as an early and undervalued contender in this sector. This suggests that the AO protocol presents a potential $1 billion opportunity for those acknowledging its significance in decentralized computation and the intersection of cryptocurrency and AI.
Conclusion
In conclusion, the AO protocol signifies a significant advancement in blockchain technology by introducing three pivotal concepts: parallel processing, application sovereignty, and asynchronous messaging.
What elevates the AO protocol is its capability to execute large-scale, multi-billion parameter AI models—like LLama-3—directly on blockchains. This accomplishment opens avenues for integrating human-like decision-making within a decentralized and trustless network.
Looking ahead, the amalgamation of blockchain and AI is poised to drive one of the most transformative paradigm shifts in the forthcoming decade. Positioned at the juncture of these two narratives, the AO protocol leads the integration of cryptocurrency and AI ahead of its competitors. While the future trajectory of the AO protocol remains uncertain over the next decade, it undoubtedly possesses the potential to play a pivotal role in the imminent cryptocurrency and AI revolution.
