Successful Node Sales of 2024

Node sales have taken the crypto industry by storm as projects have raised millions through this approach. In this approach, projects essentially sell their nodes in place of tokens to raise funds and offer high APYs or rewards to the people who purchase these nodes. In this blog, we will cover two such projects that have been in the news for quite some time now and understand their approach 

Aethir – $139.1 million

Aethir offers an enterprise-grade, on-demand solution for accessing high-performance GPUs. This caters specifically to the ever-growing demands of the AI and gaming industries, where processing power is paramount. Traditional cloud infrastructure often struggles to keep pace with the exponential growth in these sectors. Aethir’s magic lies in its decentralized approach as it acts as an aggregator, intelligently redistributing underutilized GPUs at scale. This tackles the global shortage of GPU computing power by ensuring optimal resource allocation and providing a cost-effective solution for businesses.

The Checker Node Sale 

Aethir announced its node sales in January 2024, which marked a significant step toward its vision of a decentralized GPU cloud infrastructure. This gave individuals the opportunity to become active participants in Aethir’s network by running nodes and earning rewards. By distributing business capacity across a large community, Aethir aimed to create a robust, secure, and censorship-resistant network.

Node Sale Mechanics

• Checker Nodes: The node sales essentially comprised “validator licenses” represented by ERC-721 NFTs. These “checker nodes” are responsible for verifying critical aspects of the network, including uptime, delay, quality of service, and computing power of carriers. These nodes act as guardians of the network, ensuring its efficiency and preventing malicious users from destroying its integrity.
  
• Tiered-based pricing: Aethir offered a total of 100K nodes, with a tiered pricing structure starting at $500 per node, with the number of licenses per tier decreasing with each tier. This created a FOMO effect among the participants and helped Aethir to capture a wider audience.
  
• Traction: Aethir has been able to sell ~ 74.6K nodes to over ~ 15.2K wallets as of the date of writing. They have emerged as pioneers in this emerging narrative and set the foundation for projects to conduct node sales in the future.

• Reward Pool: $ATH, the native token of the Aethir network will act as a key incentive for node operators. Aethir has earmarked 50% of the token supply for checkers and compute providers. Checker Node operators have the potential to earn up to 15% of the token allocations over the next four years. This reward mechanism has primarily encouraged users to take an active role in the Aethir ecosystem.
  

Sophon – $60 Million

Sophon is a blockchain ecosystem focused on entertainment that is built as a modular rollup using ZkSync’s Hyperchain Technology. This ecosystem is designed for high-throughput applications such as AI and gaming. By Leveraging the ZK Stack, Sophon aims to connect developers and users through a DePIN. They recently raised over ~ $60 million through node sales and have successfully set a precedent for projects in this space.

The Node Sale

Sophon launched their node sale on April 30th, 2024 and offered 200K nodes through a tiered pricing model. When zkSync enables proof-of-authority for Hyperchains (expected in Q2/Q3 2024), running a node on Sophon will enhance the decentralization of the Sophon network. 

The node holders will be required to operate the Sophon sequencer and receive sequencer fees in return along with token rewards for contributing to the maintenance and integrity of Sophon’s decentralized infrastructure.

Node Sale Mechanics

• Pricing and Availability: The Nodes were available at tiered prices and started from 0.0813 ETH and went up to 2.0566 ETH. There is no cap placed on the total number of nodes that an individual could purchase.
  
• Reward Mechanism: Node holders will be rewarded with native $SOPH tokens for ensuring and maintaining the integrity of Sophon’s decentralized Infrastructure. The node operators are allocated up to 20% of the total token supply, which will be released over 36 months with a 3-month additional lock-up period after claiming rewards. The team has also given hints of potential airdrops in the future for the node operators.
  
• Traction: Sophon has been able to sell ~ 123.5K nodes to ~ 5.8K buyers and amassed over ~ $65 million. 73% of the nodes have been sold in the whitelist while the remaining were offered through launchpads like zkStarter.

Key Takeaways from Nodes Sales

• Rewarding Participation is key: A well-designed incentive system effectively motivates users to contribute to the stability and growth of the network. This creates a win-win situation for both the project and its node operators. However, projects must keep in mind that these rewards should be dynamic i.e. based on the active participation of all node operators.
  
• Accessibility is Paramount: One of the most common methods of hosting a node sale is to have a tiered pricing structure and projects like Huddle01, and Aethir have leveraged this model to perfection. The tiered pricing structure helps to attract a wider audience base and ensures that power is not concentrated in the hands of a few.
  

Strategic Collaborations: It is very important for early stage projects to have strategic collaborations as it helps to boost the credibility of the project and this becomes even more important when projects are gearing up for the launch of node sales. For instance,   Sophon’s collaboration with ZkSync, Zentry, and Aethir played a pivotal role in its success and they successfully leveraged the community of these projects.