What AO Computer Can Do
AO Computer, created by the Open Access Supercomputing Foundation and utilizing Arweave’s data storage, functions as a decentralized and hyper-parallel computing platform. Its architecture allows for an unlimited number of parallel processes to operate simultaneously, connected through a native message-passing framework, aiming to unify the computing experience. This configuration is particularly beneficial for sophisticated applications including AI inference (as seen with projects like aos-llama), decentralized finance (DeFi) initiatives (such as Automated Market Makers like Bark and Permaswap), gaming (exemplified by Permaverse), and various development tools (including BetterIDEa). The incorporation of Arweave’s durable storage guarantees data permanence, making it well-suited for applications that require long-term data retention, resistance to censorship, and the handling of data-heavy tasks. The platform also accommodates hyper-scalable smart contracts and autonomous agents, effectively integrating with existing smart contract systems like Warp and MEM.
Closest Competitors and How It Stands Out
The primary competitors of AO Computer include Internet Computer (ICP), which seeks to provide decentralized computing solutions, and Solana, renowned for its rapid transaction capabilities. While both of these rivals boast impressive theoretical maximum transaction speeds (TPS) of around 200,000 and 65,000 respectively, AO distinguishes itself through its hyper-parallel processing capabilities, which can theoretically support an infinite number of concurrent processes. Additionally, AO’s integration with Arweave ensures that data remains secure and retrievable over time. Its model of a fair token launch is likely to draw more users compared to competitors that rely on pre-sale strategies, presenting a novel approach to developing scalable and trustless applications.
Adoption Potential
The prospects for AO’s widespread adoption are bolstered by its distinctive features: Decentralized and Trustless Computing: AO minimizes trust and facilitates permissionless verification, with all computational states securely stored on Arweave, thereby safeguarding data integrity and preventing unauthorized alterations. This aspect is particularly appealing to developers and users who prioritize censorship-resistant options. Scalable Parallel Processing: The platform’s ability to support a virtually limitless number of simultaneous processes makes it exceptionally suitable for data-heavy tasks and intricate computations, aligning perfectly with the rising demands in AI and DeFi sectors. Integration with Arweave’s Permanent Storage: By utilizing Arweave’s enduring storage solutions, AO guarantees data permanence—a characteristic that is advantageous for long-term applications like archival storage and decentralized web hosting. This feature may attract projects that require robust and durable data management. Fair Token Distribution and Economic Incentives: AO’s equitable launch approach, devoid of pre-sales or preferential allocations, along with economic incentives such as bridging rewards, attracts a diverse user base and encourages community engagement and developer interest. Growing Ecosystem with Diverse Projects: The ecosystem boasts over 100 projects at various developmental stages, encompassing gaming, DeFi, and development tools.
Apps Building on AO and Ecosystem
The network has seen significant activity, with $700 million in bridged assets and 1.5 billion messages processed, indicating strong adoption potential—though it should be noted that these bridged assets are heavily incentivized through token emissions. More than 100 projects have already integrated with the network ahead of its mainnet launch, including Permaverse (a gaming hub), BetterIDEa (a web-based IDE), AOX (a cross-chain bridge), and Automated Market Makers like Bark and Permaswap. Anticipate further growth in AI and DeFi applications, supported by tools such as CosmWasm that enhance interoperability.
Recent Developments
Several key milestones have defined AO’s recent advancements: Mainnet Launch: On February 8, 2025, AO Mainnet officially launched, following a successful testnet phase that processed over $700 million in bridged assets and 1.5 billion messages. This milestone signifies a move toward mainstream acceptance, allowing for the transfer of native tokens. AO-Core Launch: The introduction of AO-Core on February 9, 2025, marked the debut of native tokens and the initiation of community-operated mainnet nodes. HyperBEAM Implementation: AO’s new node implementation, HyperBEAM, became widely available, with initial access for mainnet Milestone 2 enabling nodes to operate on Trusted Execution Environments (TEEs), thus enhancing overall functionality. Payment Features Live: As of March 15, 2025, AO’s payment system is operational, facilitating seamless decentralized transactions for developers looking to create and monetize applications without needing third-party permission. PI Token Launch: Coinciding with Pi Day on March 14, 2025, the Permaweb Index (PI) token was launched, providing users with diverse yield options across AO, AR, or PI tokens. Minting commenced, with an equitable launch platform anticipated in Week 2 and full distribution expected by Week 4.
Upcoming Plans
Future initiatives include the ongoing launch of the PI token, with a fair launch platform set to activate in Week 2 (around March 21, 2025) and a complete token distribution targeted for Week 4 (around April 4, 2025). The project is likely to prioritize network expansion and may explore integrations with other blockchain ecosystems due to its modular framework.
Tokens and Trading
The AO and PI tokens play crucial roles in the operation of the network: AO Token: Supply and Distribution: AO follows a Bitcoin-like economic model, featuring a total supply of 21 million tokens with a four-year halving cycle. Tokens are distributed every five minutes at a monthly rate of 1.425% of the remaining supply. Initially, all tokens minted from February 27, 2024, were allocated to AR token holders based on their balances. Moving forward, 33.3% will be minted for AR holders, while 66.6% is reserved for bridging assets to stimulate economic growth. Use Case: AO tokens facilitate secure message passing within the network and incentivize economic activities such as asset bridging. Users can earn AO tokens by holding AR or by depositing assets like stETH or DAI, with options to receive yields in AO, AR, or PI tokens. Trading: Presently, AO tokens are available for trading on Permaswap, a decentralized exchange within the AO network, and are listed on MECX, albeit with minimal trading volume or liquidity. Users can obtain AO by bridging assets from other chains (e.g., AR, USDC, USDT) and swapping them on Permaswap. PI Token: Launch and Distribution: The PI token was launched on March 14, 2025, allowing AR token holders and those depositing stETH/DAI to tailor their yield, receiving it in AO, AR, or PI tokens. Minting has started, with a fair launch platform expected in the subsequent weeks. Use Case: The PI token enhances yield flexibility within the Arweave ecosystem, particularly for the Permaweb, which serves as the decentralized web layer. It is intended to encourage participation in the network’s storage and indexing sectors, offering a diverse asset mix that includes AR, AO, and other projects from the fair launch ecosystem. Current Status: As a newly introduced token, PI is in the early distribution stage, with limited details on trading availability, focusing primarily on ecosystem integration rather than immediate market trading.
The Farm
As previously mentioned, users can deposit DAI or stETH into the pre-bridge contract to earn AO or PI tokens. Here are some economic considerations: DAI and stETH are strategically selected as they are highly liquid assets with inherent yield generation. DAI already possesses a built-in savings rate, while stETH is itself a yield-generating asset. However, by depositing these assets, one forgoes their native yields. AO is emitted at a transparent rate and can be traded immediately, offering clarity without the unpredictable risks associated with points farming. This ultimately allows users to utilize their DAI or stETH yields to dollar-cost average (DCA) into AO tokens. This strategy is generally favorable if one anticipates a prolonged period of low AO prices before a potential rise, taking into account the platform’s adoption potential and recent developments. Currently, AO tokens are not listed on major centralized exchanges (CEX), suggesting upward price potential upon future listings if adoption and interest grow. The fair launch model and the absence of imminent large unlocks further strengthen this potential. With a market cap around $89 million, AO is positioned on the affordable side among operational computing networks and AI-related projects. Moreover, AO rewards at present yield significantly higher returns than native rewards (approximately 17% for AO compared to around 6.5% for DAI and roughly 7% for AO compared to about 3% for stETH).
Risk Considerations
As with any investment opportunity, engaging in this farming strategy comes with certain risks: Smart Contract Risk: The risk here is low, as the deposit contract is straightforward and transparent. Rug Risk: Also low, due to the project’s strong ties to Arweave, a well-established entity in the blockchain space. Dilution/Economic Risk: This risk is medium, as it lies somewhere between points programs and Pendle PTs. On one hand, the emissions and current yield are transparently disclosed, unlike points programs; on the other hand, future yield will be influenced by Total Value Locked (TVL), which can fluctuate unexpectedly. It’s always prudent to monitor any unusual activities using tracking analytics. Given the current market conditions, the inclination to farm points has diminished, as many projects delay airdrops due to unfavorable circumstances. This creates a scenario where dilution could occur without warning, particularly if points are allocated linearly based on the capital provided. Such conditions can also suppress fixed rates on Pendle, reflecting market sentiment regarding future yields. Additionally, with Pendle, there is a risk of short-term loss if a user exits a vault before its maturity, particularly if liquidity is required to re-enter the market. During such times, farming a liquid token with stable or long-term hold assets like DAI and ETH, which do not involve lockups, presents a timely and advantageous opportunity while also serving as a viable long-term strategy to accumulate a token of conviction for potential future sales during market upswings. AO fulfills these criteria well, offering the chance to diversify yield into AO and PI tokens, thus providing greater exposure to the AO ecosystem and potentially higher returns.
