FAQ: K-Value Adjustment

What are K-values?

The K-value is a critical metric that determines the value of a specific GPU specification within the Aethir network. It directly influences the distribution of rewards and the staking thresholds required for various GPU models.

Why are we updating them now?

This is the first major update since launch, driven by:

• Changes in market GPU pricing

• Better aligning staking and rewards with GPU value, demand, and availability

• Preparation for upcoming feature rollouts and broader hardware support

Who is affected by this change?

Only new Cloud Hosts and existing Cloud Hosts adding new nodes are affected.

Will my current rewards or stake be impacted?

No. Existing stake and active rewards remain unchanged. Only staking new GPUs will utilize the updated K-values and reward curves.

How does the new reward structure incentivize higher performance?

• If you maintain high uptime and utilization, your relative rewards likely increase

• If you provide consistent service, you benefit from the rebalancing

• Total reward pools are growing with network usage, so the pie is getting bigger while distribution becomes more merit-based

• Some lower-tier GPUs may receive slightly adjusted rewards (a detailed breakdown is shared in the official documentation)

Do I need to do anything?

No. The changes are applied automatically:

• No manual claim or staking adjustment is needed

• Your dashboard will reflect updated staking requirements for adding new nodes

Where can I see the new K-values?

You can view the updated K-values and reward calculations here: https://docs.aethir.com/aethir-cloud/aethir-cloud-host/operational-requirements-for-cloud-hosts/staking-as-cloud-host/staking-parameters

How often will K-values be updated going forward?

We plan to review K-values periodically based on market conditions, network performance, and ecosystem feedback — no timeline for future K-value changes is currently set.

I just staked recently — will my rewards be recalculated?

No. If your stake was completed before the update, your rewards follow the previous structure. The update only applies to new staking events moving forward.

What if I unstake and restake the same GPU?

Unstaking and restaking after the update will trigger the new K-value and reward structure. If you want to retain your current terms, it’s best to leave existing nodes staked.

How were the new K-values and rewards calculated?

They are based on a combination of:

• GPU market prices

• Supply/demand dynamics in the network

• Performance benchmarks across workloads

How does this help the network?

It ensures:

• Long-term sustainability of rewards

• Fair treatment across Cloud Host sizes and GPU specifications

• A more balanced and stable network as new GPU specifications join

How does adjusting K-values drive AI customer demand?

Simple economics:

• Adjusted K-values → Lower staking requirements

• Lower staking requirements → More GPU supply

• More GPU supply → Happier AI and Gaming clients

• Happier clients → Maximum utilization for Cloud Hosts

• Maximum utilization → Higher rewards

Why does capturing AI demand matter for Cloud Hosts?

Because demand drives utilization, and utilization drives rewards:

• Network with the most AI clients = highest GPU utilization

• Highest utilization = maximum revenue per GPU

• It's better to be on THE platform than A platform

• Network effects mean winners takes most

How does this make Aethir #1 for GPU-as-a-Service?

By solving both sides of the market:

• For AI builders: Best prices, instant availability, unlimited scale

• For Cloud Hosts: Maximum utilization, consistent demand, best returns

• When both sides prefer Aethir, we become the default AI infrastructure network

Does this mean Aethir isn't making money?

The opposite. We're adjusting K-values because:

• Network demand is strong and growing

• We can optimize for utilization with lower barriers to entry

• The market opportunity justifies further expansion

• We're confident in sustained demand growth - Companies in trouble raise barriers; successful companies lower them to scale

What about providers who staked at higher K-values?

Existing stake is unaffected. You maintain:

• Your current staking terms

• Your position in the network

• Any locked rewards or vesting schedules

How does this affect different GPU types?

Each GPU specification sees proportional K-value adjustment, but the impact varies:

• Lower-end GPUs: Become more accessible for Cloud Hosts to contribute

• Higher-end GPUs: Maintain premium position, with lower entry barriers

• The relative value hierarchy remains, but absolute staking requirements drop

Why not just increase rewards instead of lowering K-values?

K-values do more than set reward levels—they determine:

• Network accessibility and growth potential

• How rewards are distributed across different GPU specifications

• The balance between stake and performance

• Market positioning versus competitors - Simply increasing rewards doesn't achieve these strategic objectives

When will I see the impact on my rewards?

Timeline varies by your situation:

• Existing Cloud Hosts: Gradual increase as network grows

• New Cloud Hosts: Immediate benefit from lower entry barriers

• All Cloud Hosts: Full impact as enterprise client adoption accelerates over the coming months

How confident are you about AI demand growth?

Extremely confident based on market signals:

• Every tech company is pivoting to AI

• GPU shortages are getting worse, not better

• AI model sizes are growing exponentially

• Inference workloads exploding

• No signs of slowing down - the question isn't if demand will grow, but how fast

Will major clouds just lower their prices to compete?

They can't match our economics:

• They have massive fixed costs and overhead

• Shareholders demand high margins

• The centralized model can't scale efficiently

• They're supply-constrained - we can sustain prices they can't touch

Is this a one-time change?

K-values will be reviewed periodically as the network evolves, but changes will be:

• Infrequent and data-driven

• Announced transparently

• Based on network performance metrics

• Designed to maintain stability while enabling growth

What if this attracts low-quality providers?

Our quality controls remain unchanged:

• Performance requirements: Still stringent

• KYC requirements: Still mandatory

• Slashing mechanisms: Still active

• Monitoring systems: Still enforcing standards

Why should AI builders trust Aethir?

Because we solve their biggest pain points:

• No more begging for GPU allocations

• No more runway-killing prices

• No more capacity constraints

• Just GPUs when and where they need them, at prices that work

How quickly will we see increased demand?

The progression will be rapid:

• Immediate: New Cloud Hosts and additional GPUs onboarding

• Weeks: Capacity expansion visible to the market

• Months: AI builders migrating to Aethir

• Quarters: Utilization rates climbing significantly

• Years: Aethir recognized as the GPU compute leader

Bottom line: Should I be concerned?

Only if you're not providing quality service. This change:

• Rewards active, reliable Cloud Hosts

• Positions Aethir to capture massive AI demand

• Accelerates network growth and utilization

• Benefits everyone positioned for the AI boom

The Reality: K-values were conservative protective measures. Now that we've proven the model works and AI demand is exploding, we're optimizing for growth. This is what winning looks like.