a16z Accelerator Project Analysis

As a bellwether in the crypto space, a16z Accelerator has been leading the industry innovation. This fall, a16z selected 21 of the most innovative projects from many startups around the world, covering multiple fields such as artificial intelligence and decentralized finance. This article will analyze representative projects to reveal the future development trend of the crypto market.

Project Overview

Anera Labs-Building a Liquidity Infrastructure that Unifies All On-Chain Liquidity

Anera Labs is a liquidity infrastructure built for user intent, introducing a new concept in decentralized systems. Instead of specifying specific operations, users express the results they want through signature conditions. This allows specialized solvers to determine the most efficient way to achieve intent, separating "what" from "how".

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Anera Labs uses two auction mechanisms to activate liquidity: first-come, first-served (FCFS) and request for quotation (RFQ). FCFS prioritizes speed and will accept the first qualified bid regardless of price. RFQ, on the other hand, allows competition between fillers, potentially resulting in better prices, but takes more time.

Fillers play a vital role in these protocols, acting as intermediaries between users and the network. Their competition drives better execution quality and lower user fees. However, the potential for censorship by protocols and fillers remains a concern in decentralized systems. Protocol censorship occurs when off-chain components are involved in the execution process, introducing centralization and potentially compromising the fairness of the system. Filler censorship occurs when fillers selectively refuse to service certain orders, limiting user choice and potentially getting into financial difficulties.

Blocksense - Supporting the creation of oracles that can leverage internet data and CPU/GPU computing

BlockSense is an oracle network designed to overcome the limitations of traditional data feeds on blockchains. By leveraging zero-knowledge proofs and a decentralized network of nodes, oracles are made more efficient, secure, and transparent.

BlockSense's Merkle tree-based extension enables cost-effective data publishing and access. Flexible fees and potential chain subsidies promote the development of the DeFi ecosystem. At the same time, anyone can create a data feed, become a data provider, and access the entire world of data. Cryptographic mechanisms also ensure data integrity and minimize trust requirements. Guaranteed data availability and censorship-proof.

Cork Protocol - Risk Pricing Protocol to Accelerate On-Chain Credit

Cork is a protocol designed to simplify the creation and trading of pegged asset collateral swaps. Similar to credit default swaps, Cork's depegged swaps allow users to hedge against volatility in various markets in DeFi.

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Cork users deposit redeemable assets (RA) into the Cork Pegged Stability Module (PSM). The PSM creates depegged swaps (DS) and collateral tokens (CT) for specific pegged assets (PA). DS holders can redeem their PA for RA during depegging events. DS and CT are traded on the AMM, setting prices and returns for buyers and underwriters. At the same time, the liquidity vault provides passive income for liquidity providers.

Cork's PSM ensures that users can redeem their original principal even in the case of decoupling. And provide cheaper pricing and rewards for liquidity providers. Users can buy, sell and hedge their positions freely. Cork provides a solution for managing risks and maximizing returns in the DeFi ecosystem.

Kuzco-LLM Inference Market

Kuzco is a decentralized GPU cluster based on the Solana blockchain, which aims to provide efficient and economical inference services for large language models such as Llama3, Mistral, Phi3 by utilizing idle GPU resources contributed by network participants. Users can easily access these models through an OpenAI-compatible API. Kuzco's distributed architecture enables it to fully utilize the computing power of the network to achieve inference of large-scale models. At the same time, users are incentivized to contribute idle resources through a reward mechanism.

OpenGradient-Building a blockchain designed to bring world computing to the chain

OpenGradient is building an EVM-compatible blockchain network that aims to become a scalable and secure execution layer for AI.

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Since OpenGradient Network provides direct access to inference AI models via pre-compilation in smart contracts, it is able to maximize the composability of smart contracts. Powerful use cases can be created by simply stringing inference calls to different models in smart contracts.

As for interoperability, since OpenGradient is an EVM-compatible network, smart contracts on OpenGradient are able to interact with contracts on other chains through cross-chain queries and cross-chain calls facilitated by major cross-chain solutions. The OpenGradient team is also planning an ERC to build a future architecture for how on-chain agents and models interact with each other on EVM-compatible networks.

PIN AI - Building an open platform for personal AI (data + agents)

The PIN AI platform aims to revolutionize the field of personal AI by combining cryptoeconomic security with privacy, ownership, and a variety of applications. Unlike existing AI solutions, which are often limited by data access and privacy issues, PIN AI leverages blockchain technology to create a secure and open network for AI services.

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The PIN protocol consists of three key components: data connectors and on-chain registries, private storage and computing layers, and agent links and intent markets. These components work together to ensure privacy, data ownership, and effective matching of user intent with AI agents. PIN AI's architecture is designed to balance privacy, performance, and personalization through its hybrid model and personal index. By combining on-device processing with cloud-based computing and leveraging structured knowledge graphs, PIN AI provides contextually relevant and personalized responses while maintaining user privacy.

The PIN economy is driven by a two-sided market where users and their personal AI can access services from external AI. Data connectors and agent services play a vital role in facilitating this exchange and are incentivized through the PoE (proof-of-engagement protocol).

Term Labs - DeFi lending platform that matches borrowers and lenders at fixed rates

Term Finance Protocol is a transparent and scalable non-custodial fixed-rate liquidity protocol for digital assets.

Supports on-chain non-custodial fixed-rate mortgages (Term Repos), which are modeled similar to tri-party repo arrangements commonly seen in TradFi.

Borrowers and lenders are matched through a unique periodic auction process (Term Auctions), where borrowers submit sealed bids and lenders submit sealed offers, which are used to determine the interest rate that clears the market for participants in that auction. Participants who bid above the clearing rate will receive a loan, and participants willing to lend below the clearing rate will provide a loan, with the interest rate in each case being the market clearing rate. All other participants' bids and offers are referred to as "pending".

At the end of the auction, borrowers receive loan proceeds and lenders receive ERC-20 tokens (Term Repo tokens), which lenders will redeem for principal and interest at maturity. The protocol smart contract services these transactions by recording repayments and monitoring collateral health and liquidation.

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Term supports the deployment of term repo. Term repo is a specific on-chain implementation of fixed-rate collateralized loans modeled after tri-party repo in the TradFi environment. The main features of term repo include:

Fixed term, fixed rate: term repo involves fixed-term, fixed-rate loans, rather than open-ended floating-rate loans common in DeFi. Borrowers must repay the loan on the maturity date or repurchase date, and must repay within the repurchase window.

Irredeemable: term repo agreements are non-redeemable, i.e. lenders cannot redeem before maturity or repurchase date, and borrowers cannot repay.

Collateralized: term repo is designed to meet short-term liquidity management needs and is overcollateralized by liquid digital assets (e.g. wBTC, wETH, USDC, USDT).

Non-custodial: collateral for term repo is not held in custody, but is locked in a decentralized smart contract that can be verified in real time by both borrowers and lenders. At the same time, collateral re-pledge is not allowed, and only users can access it using their private keys and strictly complying with the terms of the smart contract arrangement. Each repo has a separate repo "locker" associated with it.

Auction mechanism: The interest rate of the repo is determined by the auction mechanism, the so-called "periodic auction". Each repo has its own "periodic auction".

Summary

Through the a16z accelerator project, we can clearly see two major trends, namely infrastructure innovation and the deep integration of AI and blockchain. The crypto industry is expanding from simple digital currency transactions to a wider range of applications. With the continuous advancement of technology and the improvement of supervision, cryptocurrencies will gradually integrate into our daily lives and bring more innovation and change to society.

On August 22, according to a report released on Wednesday by Public Citizen, a corporate influence watchdog, nearly half of corporate political donations in the 2024 election cycle came from cryptocurrency companies. Public Citizen's report is based on data provided by the government transparency organization OpenSecrets. The report found that so far, 48% of corporate election spending has come from crypto companies such as Ripple and Coinbase. The vast majority of these donations have flowed into super political action committees (PACs) that support cryptocurrencies, such as Fairshake.

The report pointed out that of the $203 million raised by Fairshake, $107.9 million came directly from crypto companies, and the rest came from well-known figures in the technology and crypto industries, including large donations from the Winklevoss brothers and Coinbase CEO Brian Armstrong.