As Bitcoin enters its fourth halving cycle, other decentralized projects are implementing similar supply-reduction mechanisms — with Bittensor preparing for its first since its 2021 launch.
Bittensor, a decentralized, open-source machine-learning network centered on specialized “subnets” that promote marketplaces for AI services, is set to experience its first halving around Dec. 14. At that time, the issuance of its native token, TAO (TAO), will decrease from 7,200 to 3,600 per day.
Grayscale Research analyst William Ogden Moore referred to the event as a “significant milestone in the network’s evolution as it heads toward its 21 million token supply cap,” mirroring Bitcoin’s (BTC) fixed ceiling.
Investors in digital assets and network participants often view a capped supply as a potential driver of value: if demand for tokens increases alongside adoption, a limited issuance model can be more attractive than pre-mined tokens or fiat currencies that have virtually unlimited supply.
Cointelegraph covered Bittensor in May during a discussion with DNA Fund’s Chris Miglino, whose AI compute fund plays a significant role in the Bittensor ecosystem.
“The primary focus within the ecosystem is our AI compute fund, where we’ve deeply engaged with the TAO ecosystem,” Miglino stated.
Related: Grayscale introduces Bittensor and Sui trust products
An exploration of Bittensor subnets
Grayscale characterizes Bittensor’s subnets as akin to a “Y Combinator for decentralized AI networks,” since each functions like a startup developing specialized products or services.
CoinGecko currently identifies over 100 Bittensor subnets, boasting a collective market cap exceeding $850 million. Taostats, which tracks the ecosystem in greater detail, reveals 129 subnets with a total market cap nearing $3 billion.
Regardless, subnet valuations have experienced substantial growth since their inception, according to Grayscale Research. Notable examples include Chutes, which offers serverless compute for AI models, and Ridges, a subnet geared towards crowdsourcing AI agent development.
This growth highlights the increasing need for decentralized AI infrastructure as developers hasten to create and scale innovative AI products and applications.
As Miglino expressed to Cointelegraph, decentralized AI may become the most significant application of blockchain since Bitcoin, driven primarily by that demand.
Bittensor subnets are also attracting venture capital. Inference Labs recently concluded a $6.3 million fundraising round to support Subnet 2, a Bittensor marketplace for inference verification.
On another front, xTao, an infrastructure developer creating tools and services for the Bittensor ecosystem, began trading on the TSX Venture Exchange in July as a newly public entity.
Related: VC Roundup: Big money, few deals as crypto venture funding dries up
