PIP Spot and Reservation Revenue Share Proposal

[isaac9905]

PIP Spot and Reservation Revenue Share Proposal

1. Summary

This proposal amends PIP3.5 by introducing a fixed two-tier management fee that replaces the existing open-ended “net of expenses” treatment:

• Spot revenue: 10% OCL management fee; 90% remitted to the Community Pool.
• Reservation revenue: 30% OCL management fee; 70% remitted to the Community Pool.

The fees compensate Overclock Labs (“OCL”) for demand sourcing, USD-to-AKT settlement, and the commercial and counterparty work required to sustain near-full utilization in a supply-constrained market. Current revenue performance under PIP3.5 materially exceeds the projections at PIP3.5 launch — see Section 4.

2. Existing Framework

Prior Provider Incentive Pilots ("PIP") such as the original PIP, extended by PIP02, PIP03, and the most recent PIP3.5, establishes that program revenue is returned to the Community Pool net of expenses (cited from PIP03):

Expenses incurred will include, but are not limited to: transaction and settlement fees, support and bounties paid to insiders or vendors, applicable taxes, and software. At the end of this program, just as was done with prior PIPs, all revenue collected by the Akash Network Core Team, net of expenses, will be returned to the Community Pool.

This amendment operates inside that framework. It replaces open-ended expense deduction with a calibrated, transparent rate and recognizes OCL’s commercial role alongside its administrative role. The Provider Performance Administrator (“PPA”) designation, OCL’s scope of responsibility, the underlying capital allocation, and the Community Pool’s status as primary beneficiary are unchanged.

3. Rationale

PIP3.5 GPU capacity is projecting between 80-100% utilization. Sustaining that level requires ongoing work the original framework anticipated only at a high level. These efforts include, but are not limited to:

• Demand matching — direct sales for reservation deals, tenant relationship management, and extended supply sourcing.
• USD-to-AKT settlement — absorbing the processing costs, conversion spread, and timing involved so tenants can transact in dollars without ever holding AKT. All network spend drives open-market purchases of AKT, which are burned to mint ACT. OCL bridges fiat processing and AKT/ACT conversion for managed deployments.
• Counterparty risk — forward capacity commitments under reservation contracts expose OCL to default, reallocation, and SLA enforcement risk that does not exist for spot.

The increase in daily network revenue from $2,297 to $4,950 is the direct result of OCL’s commercial work to source and retain demand in a supply-constrained market. The Management Fee structure proposed in this amendment is intended to make that work sustainable and transparent as the program scales, to enforce maximum accountability, and fairly share value that did not exist under the original PIP3.5 trajectory.

4. Program Performance and Impact of Demand Sourcing

Since PIP3.5 was authorized, OCL’s demand-sourcing work has materially expanded both utilization and pricing on PIP3.5 capacity relative to the assumptions underpinning the original program.

4.1 Per-GPU Pricing

PIP3.5 was authorized assuming spot pricing set at OCL’s operating cost per GPU. Current market spot pricing on Akash, driven by the supply-constrained GPU economy, is materially higher across all PIP3.5 capacity:

GPU	PIP3.5 Launch Price ($/hr)	Current Akash Market ($/hr)	Change
H100	$1.50	$2.69	+79%
H200	$2.00	$3.59	+80%
A100	$0.82	$1.34	+63%

4.2 Utilization

PIP3.5 was authorized assuming partial utilization across all GPU classes. Utilization has materially increased from the original stated %, and continues to climb into June:

GPU	PIP3.5 Stated	May Actual	June Projected
H100	59.30%	78.31%	80%
H200	57.34%	78.97%	80%
A100	61.61%	49.40%	100%
RTX 5090	—	85.69%	85%
Total

4.3 Aggregate Revenue Impact

Combining pricing and utilization across PIP3.5 capacity, comparing utilization upon PIP3.5 launch to now:

Metric	Daily Avg. February 2026 Actual	Daily Avg. May 2026 Actual	June 2026 Projected
Weighted avg. utilization	58.87%	72.10%	85.00%
Daily network gross revenue	$2,296.73	$4,949.70	$7,500*
Annualized network gross revenue	$838,306	$1,806,641	$2,737,500
% Increase from February 2026	—	115.1%	226.6%

*Based on full A100 utilization and projections from May 28, 2026 daily spend of $7,130

5. Mechanics

Fee schedule. The applicable Management Fee is applied to Gross Revenue (revenue collected by OCL from leases settled against PIP3.5 capacity, measured in USD-equivalent at collection). The balance, after fee, is the Net Remittance to the Community Pool.

Revenue Type	OCL Management Fee	Community Pool Net Remittance
Spot	10%	90%
Reservation	30%	70%

Fee composition. The tables below show how each fee is built up. Components are stated as a percentage of Gross Revenue:

Spot — 10%

Component	% of Gross
Fiat processing fees	4%
Trading fees and spread (USD→AKT conversion)	1%
Price exposure risk for managed deployments and other fees	5%
Total	10%

Reservation — 30%

Component	% of Gross
Fiat processing fees	4%
Trading fees and spread (USD→AKT conversion)	1%
Price exposure risk for managed deployments and other fees	5%
Demand sourcing and direct sales	10%
Counterparty risk compensation (SLAs)	10%
Total	30%

Classification. Spot Revenue is generated from leases settled through the open Akash marketplace without prior commitment. Reservation Revenue is generated from leases supported by a forward capacity commitment, including reserved instance contracts, committed compute arrangements, and capacity sold through a direct commercial channel. All reserved contracts are managed on-chain.

Settlement. OCL applies the Management Fee and remits Net Remittance to the Community Pool monthly, denominated in AKT.

Income Reporting Commitment. Beginning the next quarter following on-chain approval, OCL will publish a quarterly report covering: Gross Revenues, Management Fees retained, Net Remittance to the Community Pool, aggregate utilization of capacity, and any classification or settlement notes for the period. Reports are published within 30 days of quarter-end. Example: vote passes prior to July 1, 2026 so first reporting period will be Q3 2026. An additional report for June 2026 will be published within 60 days of on chain approval.

6. Scope and Duration

• Scope: Applies to revenue collected from PIP funded GPUs through on-chain leases. Verification of funds received and funds returned to the pool can be done by tracking wallet akash177gvgfknw3g99xqyjczpygjmqphw924dnk6zdz.
• Duration: Effective from the first day of the calendar month following on-chain approval. Remains in effect indefinitely, until amended or terminated by a subsequent governance proposal.
• Initiation: Begins retroactively as of June 1, 2026.
• Replacement of expense deduction: The Management Fee replaces the open-ended expense deduction in prior PIPs for the duration of this amendment.

[Wingking20]

This is a good change in principle. Fixed rates beat open-ended expense deductions, and monthly remittance in AKT means the community pool return can finally be checked on-chain instead of taken on faith. But as written, the community would be approving percentages of flows it cannot independently verify. Three details need to be in the final text, imo.

1. Which address sends the monthly remittance? Without a named wallet, "70% to the community pool" is a quarterly self-reported number. With one, it's a payment anyone can watch land every month. The difference between those two is the difference between a commitment and a press release.

2. What counts as in-scope revenue? Section 5 says fees apply to revenue from leases on PIP3.5 capacity. Why the term needs clarified: a large share of current lease revenue is Overclock's own reservation - the AkashML anchor tenancy. Section 4's own figures put network revenue near $5K/day, and the anchor reservation is roughly half of that on chain. So the question is whether Overclock remits 70% on its own spend or only on third-party tenants. One answer means the community pool receives roughly double what the other answer produces. The community can't evaluate a 70/30 split without knowing 70% of what.....!

3. Where does the USD-to-AKT conversion happen? Section 3 states all network spend drives open-market purchases of AKT, and the fee schedule charges a 1% conversion spread for it. That is the single most important claim in the proposal - it's the mechanism by which tenant dollars become AKT demand - and right now it is not verifiable from chain state. If the venue or purchasing account is named, the claim becomes checkable. If it can't be named, the community should ask why it's being charged a spread on a flow it cannot see.

None of this blocks the proposal. It makes it auditable. Quarterly reports are self-reported; named addresses let the chain do the reporting. A proposal this important to the network's economics should be approved on verifiable terms, not trusted ones - that's the entire reason settlement runs on a chain in the first place.

[isaac9905]

Hi @Wingking20 thank you for your contributions and thoughtful comments. I will respond to each item accordingly.

1. I will add in the wallet address used to manage provider earnings to the discussion. I think this is a helpful addition.
2. In-scope is all managed providers funded by community pool funds. AkashML is not considered a reserve tenant. Reserve tenants are all third parties. If AkashML spends $50k a month on managed providers, then they would be subject to the 90/10 split.
3. Your reference to section 3 is specifically discussing the costs incurred by Overclock under BME to manage deployments — a real cost factored into the model. The 1% is a cost estimate reflecting typical market spread, not a fixed extraction. The quarterly report will cover Gross Revenues, Management Fees retained, and Net Remittance to the community pool — the economics of the fee structure are what the community is approving, and those figures will be reported on a verifiable basis each quarter.

[Wingking20]

Sorry to keep at this, and thanks for taking the time-- the wallet and the AkashML 90/10 answers got me most of the way. One last question should close the loop.

Section 3 says "all network spend drives open-market purchases of AKT," and the fee keeps 1% to cover that buying. Your replied that the 1% is "a cost estimate… not a fixed extraction" -- is fair, and explains how the fee was sized. But that's the fee; §3 is a claim about the flow. Both can be true, so it's worth separating them.

So, plainly: when Overclock Labs sends the monthly payment to the community pool in AKT, is that AKT bought on the open market, or paid from AKT OCL already holds? Both look the same in a report; same number, opposite effect on the token... so only the wallet it comes from can tell them apart.

If it's bought, naming where (just as you've offered for the remittance wallet) makes §3 something the chain shows. If it's from existing holdings, that's still a real remittance to the pool and worth approving -- only then "open-market purchases" says a bit more than the settlement does, and that line is worth a small reword.

[isaac9905]

Let me dissect where the open market purchases occur and how the community pool receives their AKT because these are two separate legs of the chain.

Open market purchases occur when funding deployments from the managed experience. Ex: a tenant wants to use $100 to deploy on Akash. That $100 is converted to AKT via open market purchases, which is then burned to mint ACT. Please note that this is an internal process for OCL and not a part of the actual revenue earning process. Inevitably all funding from tenants lead to purchases of AKT that fund their ACT denominated deployments.

The AKT the community pool receives is specifically driven by the burning of earned ACT on the provider wallet side. That $100 that entered the system will yield $100 worth of spend available. If the tenant were to deploy on one provider, that $100 worth of ACT would be eaten up and end up in the provider wallet. If it's a managed provider under PIP, that ACT is minted to AKT daily, which is then subject to rev share terms above. In other words, the AKT returning to the pool is from OCL's managed provider wallets.