Cudos: The decentralised cloud computing Blockchain Poised to Power Games, Metaverse, DeFis and more

Blaise Bayuo
7 min readSep 19, 2022

Introduction: The CUDOS Network

The global economy is moving into the age of digitisation, machine learning, artificial intelligence and automation of work, which will require a lot more computing power for companies and projects. Blockchain remains a technology that can power the new paradigm of growth in a decentralised manner. These trends point to a growing need for computing resources in terms of server farms and data centres across different locations for speedy access. As organisations invest more in data infrastructure, the cost of renting them for cloud computing will likely increase. Ironically, most organisations and individuals underutilize their computing resources with up to about 50% of such resources lying idle. Consider the many laptops, mobile phones and VPS resources that are lying idle on a daily basis. How best can these resources be harnessed into a cloud computing pool for technology projects to leverage and deploy their resources? Blockchain projects will continue to grow in their need for cloud computing resources at a cheaper cost.

The Cudos Blockchain project is designed to solve this by spearheading the implementation of a distributed computing platform that harnesses over 3 billion electronic devices (servers, laptops and mobile phones) into a single network that allows blockchain developers to access more computing power at a lower cost. It is a marketplace where blockchain projects and cloud applications buy cloud resources from sellers who have idle space on their data centres and mining farms (electronic devices). Hence, hardware owners who join the network earn equity or tokens as rewards for the use of their idle resources. Developers are able to select from multiple resource providers who compete to provide efficient resources. The competition also lowers the cost of service provision. According to Cudos, about $1 trillion is spent annually on IT hardware, yet less than 50% of this resource is utilised for active production. Here lie the win-win situation and value proposition of the Cudos platform. This will increase resource availability globally for projects to leverage.

Cudos doesn’t just provide the distributed computing resource network but provides software templates compatible with different blockchains and software services. This makes it easier for developers, Game developers, Metaverse Dapps, DeFis, and institutions to select pre-designed software templates to install and deploy their code or application. The Cudos project is disruptive in that it provides the following services in a new way but at a lower cost in the market.

Decentralised cloud computing

The current cloud computing architecture is centralised with hosting companies. Users buy resource packages that are determined by the hosting provider and in most cases are expensive for the end-users. Cudos, on the other hand, is decentralising this industry by allowing a distributed network of resources, which buyers can buy to meet their computing needs. Buyers also have the opportunity to select from different providers as well as easily switch between different resource providers. As more people from different countries join the network, it increases the speed and delivery of content to users within those countries, hence reducing latency in content delivery. It also allows companies and individuals to monetise their idle computing resources.

Layer-1: Smart contracts

Cudos’s layer one is on-chain implementation and takes place at the blockchain level. Cudos has deployed its smart contracts at the blockchain level, which interacts with smart contract writing and is deployed on the blockchain by developers and dapps. The blockchain smart contract invokes the Cudos smart contract, on the same blockchain, in order to request work to be computed off-chain or to access external data at layer 2 and layer 3 levels. In summary, the layer is on-chain and operates at an intelligent contract to smart contract level while layers 2 and 3 are off-chain implementations.

The Cudo network layer-2 architecture provides smart contract templates for blockchain developers and DeFi applications to select and deploy their applications. Alternatively, developers can also deploy custom code for their applications on their desired blockchain projects. It supports s escrow services, and payment services on Ethereum and Algorand blockchain networks and developers can deploy applications across these networks.

Layer-2: The Cudos Network

Layer 2 is the Cudos network, which is made of nodes (servers) deployed by members of the network to compute and validate transaction requests to determine the type of workload that needs to be performed at the layer 3 levels (discussed later). The nodes are off-chain and the Cudos network currently has over 20,000 nodes validating transactions at the layer-2 level. These nodes are constantly listening to events in the CUDOS smart contract in layer 1, to see when a new request for a compute job is created. The selected node validates the transaction and sends the request to the relevant app or code deployed on the layer 3 marketplace for the computation task to be performed. Once the task is completed, it is validated by a consensus check needed in order to return a unique result to the original requesting smart contract on the layer 1 blockchain.

To run a node on the Cudos network, the owner needs to buy and stake about 2,000,000 CUDOS tokens in order to be eligible. The Cudos network uses a reputation-based model to select nodes for tasks. The higher the CUDOS tokens staked by a node, the higher the chance it will be selected to compute and validate tasks on the network. In return, nodes are rewarded CUDOS from the network fees for completing tasks on the network.

Layer-3: The Cudos Platform

One of the disruptive components of the Cudos network is the layer 3 platform implementation. Cudos Ventures has built the technology which allows it to aggregate idle computing resources from servers, laptops and mobile phones into a central marketplace. They are called “Workers” and are dotted across over 145 countries. Blockchain projects and DeFis then leverage these resources to process high computing tasks off-chain. This third layer is also called the Cudo platform and interested Workers who want to pool their resources have to install the Cudo software before they can be allowed to compute tasks.

Here again, Cudo undertakes a benchmark of all Workers (pooled computing resources) to know their capabilities and the type of tasks they can perform. Developers can create apps on the marketplace or apps can deploy their custom code in these data centres. The nodes in layer 2 can invoke the layer 3 platform based on inputs supplied by the layer 2 nodes. Also, anyone can store data at layer 3 which can be accessed by the layer 1 on-chain smart contract. The Cudo Nodes work with the Cudo Workes in computing and validating transaction identifiers and hashes before returning the result to the layer 1 on-chain smart contract. The figure below is an overview of the Cudos architecture and how the CUDOS tokens are used to fuel the implementation process.

To add your computing resource as a Worker on the Cudo Platform, the owner does not need to stake any CUDOS tokens to get started. Rather, they earn CUDOS as rewards for performing computational tasks on the platform.

Token economics

The Cudos project has a utility token, which is used to perform various actions on the network. Validations stake the tokens to continue with their operations while sellers get paid in Cudos for adding their resources to the network. Developers pay network fees using the utility token. You can also buy the token and earn rewards for holding the token. Staking is ongoing on various exchanges and anyone can make a personal decision to stake their tokens for up to 30% APR. Note that the token is not an investment token and so this is not investment advice.

The utility token serves as the fuel of the Cudos network, providing incentives and rewards to resource providers. Customers also pay network fees with the token when they submit jobs for processing. The figure below draws the linkages between the layer 2 and layer 3 networks and how the token provides the fuel for its functionality.

Cudos is an Ecosystem

The platform consists of different players who all interact to provide a powerful but affordable off-chain cloud computing network. There are strategic partners who have been backing the project with varied forms of resources. But largely, the project is community-driven and with new partners joining the project. Strategic partners like AMD provides hardware resources with the network while Borderless Capital, and Outlier Ventures provide financial resources through the purchase of digital assets. The figure below gives a snapshot of some of the strategic partners though the list is not exhaustive.

Increasingly, the Cudos community is growing with validators who run nodes on the platform.

Cudos is Greener

Cudos's approach to cloud computing is ensuring efficient use of idle resources thereby reducing the amount of electricity and needed to set up new hardware infrastructure. Developers and dapps gain access to idle resources globally reducing the environmental impact of manufacturing new hardware infrastructure.