Arweave’s AO Computer Is Ready for Lift-off
Part 2 of 2: Deposit rewards, referral programs, hackathons — it’s all happening now on the AO Testnet.
AO Computer is inherently linked to Arweave’s permanent storage layer. If you’ve just landed on this article and you’re unfamiliar with Arweave, I suggest reading part 1 first to get a basic understanding: Arweave, the Permaweb, and a Breakthrough Equation.
When it comes to AO Computer, there’s a lot to get through, so let’s start with this simplified high-level overview: AO is a decentralised supercomputer that uses Arweave as its hard drive.
This superposition of computation above permanent storage enables an ecosystem of decentralised applications to be built out at a mind boggling scale. AO allows for both large-scale compute and verifiable compute.
There’s relentless developer activity afoot, transaction counts are surging, and hundreds of millions of dollars worth of crypto assets have been deposited to the network in anticipation of the mainnet launch.
AO is different to what most crypto projects are building and certainly warrants a closer look, especially with the fair launch token reward program that’s currently underway (more on that below).
In this introduction to AO we’ll be exploring:
- How AO works
- AO’s fullstack potential
- Projects building on AO
- AO tokenomics
- Keeping up to date on AO
Let’s dive in.
How AO Works
First of all, AO is not a typical blockchain; it’s a message passing protocol. This is the mechanism by which a decentralised super computer can grow to internet-scale utility.
Imagine entering a search query on Google and having to wait until all other users receive their answers first. This would create a terrible user experience. Our internet activity needs to runs seamlessly in parallel. But this can’t happen on a traditional blockchain, where transactions enter a queue in order to be confirmed. Even with high throughput and sophisticated bundling methods, this structural element of queuing for consensus remains present in such systems.
An intricate message passing architecture between AO and Arweave allows for any number of processes to run in parallel. This architecture is composed of Messages, Processes, Message Units (MUs), Compute Units (CUs), and Schedule Units (SUs).
OK, I get it, this is getting pretty nerdy. Let’s try for some quickfire takeaways as to why this matters, specifically in the context of comparing to other blockchains.
Some key points
- True parallelisation. Activity on AO reports to the underlying blockchain in parallel, avoiding consensus bottlenecks.
- Cron scheduling. Smart contracts typically need to be “woken up” by user transactions. AO’s use of cron scheduling enables processes to operate at predetermined times.
- Holographic state. Logs of interactions are recorded on Arweave, and projected holographically to AO.
- Actor oriented. AO stands for actor-oriented. The system is modular and flexible, capable of adapting to the needs of individual processes.
- Lua. Lua is a simple programming language used by millions of developers and gaming modders around the world (World of Warcraft, Minecraft, Roblox). A crypto ecosystem can only flourish if there’s a healthy developer community; using Lua unlocks a vast pool of talent.
- LLMs onchain. AI models can run inside smart contracts.
- Scale. Every new node added to the network adds more computational power. A single process on AO can be as large as an entire Ethereum layer 2 rollup.
This presentation by Arweave founder Sam Williams sums it up nicely:
Alongside these impressive features, a recent addition to the Arweave tech stack could be the key to bringing AO computation mainstream.
AO’s Fullstack Potential
As we all know by now, Arweave’s raison d’être is to provide permanent storage. AO builds upon this with the potential of its hyper parallel computation. More recently, ArFleet was announced, a solution for temporary storage in the Arweave ecosystem.
This is a huge jigsaw piece that was missing from the permaweb puzzle, as Arweave’s pay once, store forever model makes Web2 style deployments and interactions prohibitively expensive to achieve.
There’s a push now to explore what’s possible with this combination of a hyper parallel computer that makes use of permanent and temporary storage.
In fact, the Only Arweave team has just launched a $50K hackathon to promote building in this new paradigm. The hackathon even includes a $1k referral program; it’s an ideal way to get involved in the ecosystem.
This is just speculation on my side, but ArFleet may well be the way that Odysee, the decentralised video hosting platform acquired by Forward Research, works its way into the Arweave ecosystem.
Projects Building on AO
As you can see from the map below (credit to everPay), there’s a considerable amount of building going on here. Look closely and you’ll even notice one of my favourite DePIN projects Anyone Protocol.
Arweave is simmering now. There’s so much going on, every single day the Arweave Today publication is packed full of updates.
But it’s small too, and that’s good. The teams are connected, they’re aligned on the philosophy behind the project, led by eloquent founder Sam Williams. It’s hard to put into words, but compared to big money projects that offer little more than flashy marketing, Arweave and AO is just heads down building with huge potential.
aoVentures
One of the most well-balanced examples of thoughtful building I’ve found was the recent aoVentures incubator which showcased several projects over the summer.
There’s a project covering almost every use case. GPU clusters, stablecoins, data bundling, creator revenue share, prediction market, custody solutions, decentralised oracles, lending and borrowing, zero-knowledge privacy, and personal data sovereignty.
AO Tokenomics
I think it’s fair to say that Sam Williams is a big admirer of Bitcoin. Look no further than $AO’s tokenomics for proof: a fair launch token, with a hard cap of 21 million tokens, and a 4 year halving cycle. Doesn’t get much more similar than that.
There’s a key difference though. $AO’s halving effect takes place gradually, as opposed to Bitcoin’s abrupt supply shock every 48 months. And compared to Bitcoin’s Proof-of-work mining, $AO tokens are minted and emitted through an innovative reward procedure.
AO token earning opportunity
AO Computer is still in testnet, and the $AO tokens are not yet tradeable. They’re being minted at a rapid rate though, with over 2.3M of the total 21M already having been minted as incentive rewards for seeding economic growth on the platform.
Users can earn the tokens by:
- holding $AR
- bridging $stETH (Lido Staked ETH)
- bridging $DAI
- bridging $SOL (announced, but not yet introduced at the time of writing)
As of writing there’s over $450M worth of assets that have deposited to AO. To put that size in perspective, the total value of bridged assets on AO fits within the top 20 chains on DefiLlama (measured by TVL), and Solana deposits have yet to start. A quick look at the @aoTheComputer X account’s timeline will show you this number is rising constantly.
If you’re holding stETH or DAI and would like to earn some AO tokens, head over to ao.arweave.dev/#/mint to deposit your assets. This is of course a crypto bridge, so do your own research and apply appropriate risk management.
The AO tokens are expected to be released once the supply hits roughly 15%, or around early February 2025. Official details about the token’s release schedule can be found in this Mirror article.
Keeping Up to Date with AO
When activity picks up in a crypto bull market, the news comes flying from all angles and it’s hard to keep up. I expect it to be similar with AO, especially when mainnet goes live and the first few applications gather some hype.
The best thing you can do is line up your sources in advance. Here are some useful accounts, sites, and projects to bookmark:
- @aoTheComputer — Official X account for news and updates
- @samecwilliams — Sam Williams’s X account
- @onlyarweave— X account for daily ecosystem updates
- @LlamaLandAO — AI powered MMO game
- @dumdumznfts — NFT community of choice for many in the permaweb
- @ar_io_network — Incentivised gateway network for the permaweb
- — Medium account for articles and interviews
- Weavers — Community with raids, bounties and hackathons
- Bazar — Marketplace for exclusive digital assets and content
- AOLink — Explorer for the AO Computer
Those are just 10 resources to start you on your path. The rest is up to you.
Conclusion
There are plenty of overhyped chains that have little to show for all their marketing prowess. Arweave however is a real developer’s chain, and a true source of utility for many Web3 projects and protocols.
AO Computer offers a vastly different approach to smart contracts and decentralised computation and is built above a project that’s been going strong for over six years. The introduction of ArFleet, the promise of Odysee, and a collaborative philosophy of preserving humanity’s most important information, are just some of the elements driving this project forward.
TL;DR? Bullish on AO.
As a Technical Content Writer, I support projects in Crypto, Web3, DePIN, and AI with research articles, strategy, copywriting, newsletters, white papers and more.
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