One post tagged with "ETHDenver"

As the CEO of Cuckoo Network, I attended this year's ETHDenver conference. The event provided me with some insights and reflections, especially regarding the current state of the crypto market and the development direction of decentralized AI. Here are some of my observations and thoughts, which I hope to share with the team.

Market Observation: The Gap Between Narrative and Reality​

The number of attendees at this year's ETHDenver was noticeably lower than last year, which was already lower than the year before. This trend suggests that the crypto market may be transitioning from frenzy to calm. It could be that people have made money and no longer need to attract new investors, or that they didn't make money and have left the scene. More notably, I observed a common phenomenon in the current market: many projects rely solely on narrative and capital drive, lacking a logical foundation, with the goal of merely boosting coin prices. In this scenario, participants form a tacit understanding of "mutual deception and pretending to be deceived."

This makes me reflect: In such an environment, how can we at Cuckoo Network remain clear-headed and not lose our way?

The Current State of the Decentralized AI Market​

Through conversations with other founders working on decentralized AI, I found that they also face a lack of demand. Their decentralized approach involves having browsers subscribe to the network and then connect to local Ollama to provide services.

An interesting point discussed was that the development logic of decentralized AI might eventually resemble Tesla Powerwall: users use it themselves normally and "sell back" computing power to the network when idle to make money. This has similarities with the vision of our Cuckoo Network, and it's worth delving into how to optimize this model.

Thoughts on Project Financing and Business Models​

At the conference, I learned about a case where a company, after reaching 5M ARR in SaaS, faced development bottlenecks and had to cut half of its data infrastructure expenses, then pivoted to decentralized AI blockchain. They believe that even projects like celer bridge only generate 7-8M in revenue and are not profitable.

In contrast, they received 20M in funding from Avalanche and raised an additional 35M in investment. They completely disregard traditional revenue models, instead selling tokens, attempting to replicate the successful web3 model, aiming to become "a better Bittensor" or "AI Solana." According to them, the 55M funding is "completely insufficient," and they plan to invest heavily in ecosystem building and marketing.

This strategy makes me ponder: What kind of business model should we pursue in the current market environment?

Market Prospects and Project Direction​

Some believe that the overall market may be shifting from a slow bull to a bear market. In such an environment, having a project's own revenue-generating capability and not overly relying on market sentiment becomes crucial.

Regarding the application scenarios of decentralized AI, some suggest it might be more suitable for "unaligned" LLMs, but such applications often pose ethical issues. This reminds us to carefully consider ethical boundaries while advancing technological innovation.

The Battle Between Imagination and Reality​

After speaking with more founders, I noticed an interesting phenomenon: projects that focus on real work tend to quickly "disprove" market imagination, while those that don't do specific things and only rely on slide decks for funding can maintain imagination longer and are more likely to get listed on exchanges. The Movement project is a typical example.

This situation makes me think: How can we maintain real project progress without prematurely limiting the market's imagination space for us? This is a question that requires our team to think about together.

Experiences and Insights from Mining Service Providers​

I also met a company focused on data indexer and mining services. Their experiences offer several insights for our Cuckoo Network's mining business:

1. Infrastructure Choice: They choose colocation hosting instead of cloud servers to reduce costs. This approach may be more cost-effective than cloud services, especially for compute-intensive mining businesses. We can also evaluate whether to partially adopt this model to optimize our cost structure.
2. Stable Development: Despite market fluctuations, they maintain team stability (sending two representatives to this conference) and continue to delve into their business field. This focus and persistence are worth learning from.
3. Balancing Investor Pressure and Market Demand: They face expansion pressure from investors, with some eager investors even inquiring about progress monthly, expecting rapid scaling. However, actual market demand growth has its natural pace and cannot be forced.
4. Deepening in the Mining Field: Although mining BD often relies on luck, some companies do delve into this direction, and their presence can be consistently seen across various networks.

This last point is particularly worth noting. In the pursuit of growth, we need to find a balance between investor expectations and actual market demand to avoid resource waste due to blind expansion.

Conclusion​

The experience at ETHDenver made me realize that the development of the crypto market and decentralized AI ecosystem is becoming more stable. On one hand, we see a proliferation of narrative-driven projects, while on the other, teams that focus on real work often face greater challenges and skepticism.

For Cuckoo Network, we must neither blindly follow market bubbles nor lose confidence due to short-term market fluctuations. We need to:

• Find a Balance Between Narrative and Practice: Have a vision that attracts investors and the community, while also having a solid technical and business foundation
• Focus on Our Strengths: Utilize our unique positioning in decentralized AI and GPU mining to build differentiated competitiveness
• Pursue Sustainable Development: Establish a business model that can withstand market cycles, focusing not only on short-term coin prices but also on long-term value creation
• Maintain Technological Foresight: Incorporate innovative ideas like the Tesla Powerwall model into our product planning to lead industry development

Most importantly, we must maintain our original intention and sense of mission. In this noisy market, the projects that can truly survive long-term are those that can create real value for users. This path is destined to be challenging, but it is these challenges that make our journey more meaningful. I believe that as long as we stick to the right direction, maintain team cohesion and execution, Cuckoo Network will leave its mark in this exciting field.

If anyone has thoughts, feel free to discuss!