Thread by @MTorygreen

The #metaverse is inevitable and it's going to be worth TRILLIONS

BUT there’s one huge problem – our current infrastructure can’t support it

Protocols such as @RenderToken aim to fix this and, as such, have the potential to increase in value by 30x – 80x

Here’s how

👇

🧵

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Render is a decentralized “marketplace” that allows users to rent out unused #GPU processing power to #render 3D objects (we’ll explain this in a second)

It has a MC of $123M, FDV of $260M, and its $RNDR token trades at $0.48

In 2021, the token price hit $8.76

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This thread will cover the following:

• Industry overview

• What problem does Render solve?

• How does it work?

• What are its plans for the future?

• Who are the key players in the ecosystem?

• What are its #tokenomics?

• What’s the potential value of #RNDR?

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🔶 Industry Overview

The potential for the #metaverse is mind boggling

It’s billed as the next version of the internet

@Citi believes that it could be worth $13 trillion by 2030 and @ballmatthew thinks it could be worth $30 trillion

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It’s the logical extension of several trends:

• Hyperconnectivity: 5 billion people use the internet (average of 8 hours a day in US)

• Remote Work: 2/3rd of Americans are fully or partially remote

• Acceptance of online culture: 81% of teens hang with friends online

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🔶 Problem

But there’s a major problem…

The metaverse will be the biggest computing challenge in history

Vast amounts of processing power will be required to create entire digital worlds with simulated environments, realistic physics, holographic displays, #VR & #AR

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One of the biggest challenges will be rendering, a process used by computers to create 3D visual displays with texture and detail.

This process is extremely difficult and computationally intensive, and often requires hours to render a single object or frame.

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For instance, it took Pixar two years to #render Monster’s University…

…and it used one of the 25 largest supercomputers in the world!

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Our current infrastructure simply isn’t equipped to handle the volume required

In particular, the cloud today lacks enough GPUs – graphical processing units – required to render the metaverse at scale

(the # of GPUs in the cloud is a fraction of the # in circulation)

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GPUs have a variety of uses other than gaming and rendering (they’re most often used in applications that involve machine and deep learning)

As such, there’s a huge demand which – combined with the limited supply – is causing delays and high costs

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🔶 Solution

Fortunately there’s a simple solution – use the hundreds of millions GPUs we all have on our personal computers!

This is known as decentralized (or “shared”) computing

(i.e. users “rent” unused processing power in exchange for payment in #cryptocurrencies)

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Shared computing offers several benefits:

• More Processing Power

• Faster Speeds

• Lower Costs

• More Security

• Passive Income

Avivah Lithan of Gartner believes that it represents “blockchain at its best — #P2P networks where underutilized servers are traded”

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🔶 Protocol Overview

Render is one of the leaders in decentralized compute and hosts a network of GPUs that customers can use to render visual effects and 3D graphics

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It was initially launched by @JulesUrbach and Malcolm Taylor in 2008 under the name @OTOY

OTOY pioneered the #OctaneRender software, which powered an on-demand cloud rendering service that used centralized cloud providers for processing

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Urbach soon realized that these centralized providers couldn’t meet the growing needs of cloud rendering

In particular, there were too few resources competing for too many jobs, ↑ prices and slowing execution

As such, he transitioned to a #decentralized network in 2017

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Today, Render is used across a variety of industries including:

• Media

• Industry

• #AR

• #MR

• #VR

• #Gaming

• Medical

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🔶 How does it work?

Render operates as an automated marketplace – a sort of “AirBnB” for processing power – where users who want to lend unused computing power (called “nodes”) are matched with content creators seeking rendering services

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The network is powered by the $RNDR token:

• Content creators submit a job request along with a payment in RNDR (which is held in escrow)

• The network automatically assigns the jobs to the appropriate node

• Node operators complete the work and the escrow is released

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Render uses a system known as Proof-of-Render to protect the network against bad actors

Nodes receive a score through a combination of technical (e.g. compute potential) and manual (e.g. customer feedback) factors

Those with low scores can be penalized or ignored

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🔶 Long-Term Vision

Render’s aspirations go beyond just decentralized compute

It ultimately hopes to become the defacto standards provider for the open #metaverse – creating tools & infrastructure such as next-generation #NFTs & immersive real-time streaming services

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🔶 Market

It’s difficult to approximate Render’s true market potential due to its lofty aspirations, but the closest comp right now is the “#GPU as a Service Market”, which is expected to increase from $2.8B in 2022 to $81B in 2032 (40% CAGR)

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🔶 Competition

This space is currently dominated by the “Big 3” cloud providers – Amazon AWS, Google Cloud and Microsoft Azure

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There are also decentralized peers such as Golem, Livepeer and Akash (although most of these players have different use cases and / or focus on CPU compute)

Furthermore, some decentralized storage providers, such as Filecoin, are likely to eventually move to compute

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🔶 Traction

Since launching in 2017, #Render has built the most widely used decentralized GPU computing network in the world

It has rendered over 5-million frames to date and helped generate over $500 million in #NFT sales in 2021

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The protocol has been used by notable creators such as @thealexrossart, Gene Roddenberry and @beeple

Its #Octane app has a strong reputation in Hollywood & has been used for a variety of high-profile projects, including Westworld and @LilNasX’s MONTERO music video

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🔶 Team

Parent #OTOY lists 62 employees on LinkedIn including CTO Charlie Wallace, COO @drjonessf and Director of Strategy @phillipgara

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🔶 Advisors

Render has a strong team of advisors from Hollywood, Silicon Valley and Web3 including Ari Emmanuel, @jjabrams, @BrendanEich, Beeple, Jennifer Zhu Scott, Demian Brener, @maraoz, @DavidVorick

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🔶 Investors

Notable investors include @generalcatalyst, Addition, @KeneticCapital, @multicoincap and @NGC_Ventures

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🔶 Tokenomics

$RNDR has a fixed total token supply of 537M

The initial allocation was:

• 25% released in the public sale

• 10% to the reserve (founders & contributors)

• 65% released over time to power transactions on the network

254M are in circulation today

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🔶 Valuation

The global market for GPU-based cloud compute is expected to reach $80B by 2032

If #RNDR can become one of the top 3 players in this space and capture 10% to 30% market share, its valuation could rise to $8B to $22B (a 30x to 80x return from today)

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An $8B to $22B FDV is by no means unrealistic

In fact, seems conservative as that wouldn’t even crack the top 100 in the list of largest tech companies by market cap

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Indeed, thinking of $RNDR as shared GPU provider represents a relatively niche case

The protocol could theoretically capitalize on any traction and expand into the overall cloud computing market, which represents a much bigger prize at an estimated TAM of $1.6T

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🔶 The Big Picture

Render will likely continue to play an important role in cloud rendering

Not only does it have the potential to supplement traditional solutions, but it will likely be better for the consumer

But – IMO - that’s not even it’s most important benefit…

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Currently, one of the biggest threats to the #metaverse is control by a centralized entity such as Google, Meta, Amazon or Apple

Decentralized solutions such as @RenderToken could help prevent that, ultimately securing the future of Web3

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If you want to learn more about #RNDR, check out these accounts:

@C3_Nik
@col_jung
@cryptomanran
@ImMachineAlpha
@OddStoekTrqder
@VinnyLingham

I hope you've found this thread helpful.

Follow me @MTorygreen for more fundamental analysis on Web3 protocols.

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