Why Tokenize an Open Source AI Model?
Jun 5, 2025
1. You Asked, We Listened
Bootz and others in the community chat hit the nail on the head:
“If the model is open source and hosted somewhere else, what do buyers of the token actually get?”
“Is this just speculative wrapping of free resources?”
Great questions, and exactly the sort of clarity we owe you before launch. Below is the plain-English explainer that turns “open-source AI Models” into “an on-chain economy you can own, govern, and earn from.”
Think of Modelz as Virtuals for AI models: each open-source model gets its own token, treasury, and revenue rails, letting builders monetize, users co-own, and everyone vote on future upgrades, while providing enough funds for the top open-source models to get hosted with inference to then plug in to AI Agents.
2. From Big-Tech Monopoly ➜ Mini-Startup Flywheels
Pain Today | Modelz Fix |
|---|---|
Big Tech keeps the reward: Cloud giants run the most popular proprietary models and mark up GPU time 5-10×, capturing nearly every dollar the model generates. | Tokenized Ownership: Each MODEL token is a slice of the model’s “mini-startup,” so usage fees flow to you, the dev, and the community instead of an hyperscaler. |
Premium Paywalls: Even for open-source AI models, access is gated behind pricey API keys and proprietary dashboards. | Transparent Revenue Rails: Fees are on-chain, split automatically between stakers, maintainers, and compute providers. No hidden mark-ups. |
Creators paid in Likes: Open-source authors rarely share in the upside when their weights power billion-dollar products. | Initial Model Offering (IMO) gives 3.14% of the supply of the treasury day-one to the model creator, directing a fixed token tranche and ongoing royalties to the original builders. |
Zero skin-in-the-game for users: Power users and early adopters can’t own or shape the tools they rely on. | Stake, Vote, Earn – Holding tokens lets anyone fund fine-tunes, vote on roadmaps, and share inference revenue—turning every model into a community-run business. |
3. What Does a MODEL Token Entitle You To?
Utility | How It Works | Why It Matters |
|---|---|---|
Revenue Share | A fixed slice of every paid inference, fine-tune, or API call is streamed to the model’s staking pool. | Long-term cash flow ≠ pure speculation. |
Governance | Token-weighted votes decide fine-tune priorities, licensing deals, or treasury spend. | Users + builders steer the roadmap, not Big Tech. |
Access Gating | Devs can gate premium endpoints (e.g., uncensored, higher-context, finetuned weights) behind token holds or burns. | Turns free tiers into freemium business models. |
Liquidity & Exit | Tokens trade permissionlessly; early supporters can realize gains without waiting for an IPO-style exit. | Aligns incentives at every growth stage. |
4. A Concrete Example: “But DeepSeek Is Already Free!”
Today
You ping DeepSeek-LLM 67B on a public inference endpoint.
DeepSeek Inc. burns through GPU dollars; you pay nothing.
On Modelz
DeepSeek-MODEL launches an IMO. 3.14% of supply goes to the original devs, 3.14% to PACA Holders; the rest sells via a bonding curve, seeding the model treasury with PACA.
An Agent (say, a chat widget) calls DeepSeek via the Modelz API and pays per token generated.
Fees flow: Agent → Model Treasury → Stakers
Net-net: you still can use a public demo for free, but if you’re a power user or a dev building on top, it’s rational to hold or stake tokens because you (a) offset your own costs with yield and (b) participate in upside you help create.
5. Quick FAQs
Question | TL;DR Answer |
|---|---|
Do I “own” the IP? | You own transferable economic and governance rights, not sole copyright. Similar to owning a share in an open-source company. |
What if someone forks the model off-chain? | They can, but they lose access to the Modelz fee rails, treasury, and community distribution: the very things that sustain long-term improvements. |
Isn’t this just another ERC-20? | Under the hood yes, but wired into purpose-built contracts for royalty splits, staking yields, and on-chain inference metering. |
Where does PACA fit? | PACA is the gas & settlement layer; MODEL tokens are the equity layer. Stake PACA ➜ farm MODEL ➜ earn fees. |
6. Get Involved Before Launch (July 10)
Read the Documentation here.
Join the waitlist to try Modelz first and join the first IMOs.
Stake $PACA to get access to the first IMOs.
See you on chain July 10th.