Opinion, AI, Opinion With competing AI projects and performance-based rewards, Bittensor represents a shift from speculation-driven to utility-driven tokenomics, says Arrash Yasavolian, Founder and CEO, Taoshi (Subnet 8 on Bittensor). 

After nearly ten years in crypto, I’ve watched hundreds of projects promise to revolutionize everything from banking to art. Yet these revolutions have largely failed to materialize.

The issue isn’t technology. It’s that we’ve been building solutions looking for problems, rather than focusing on solving real challenges and delivering real value.

Most projects create tokens first, utility later. This speculation cycle has consumed the industry, measuring success by token price, not actual value creation. We’re missing the crucial ingredient: a mechanism that rewards building useful things rather than building over-hyped useless things.

What if there was a protocol that flipped this model and projects had to create value first, then get rewarded? That’s Bittensor.

Bittensor: Rewarding Performance Over Mindshare

In some ways Bittensor is like the Y Combinator of AI. Whereas Y Combinator gives startups money and mentorship in exchange for equity, Bittensor gives builders incentives through token emissions, measures performance through free market dynamics, and rewards winners without human gatekeepers.

Think of it as an economic game where independent teams compete to build valuable AI services. Every 12 seconds, the network distributes rewards based purely on usefulness. No marketing budgets. No insiders. No traditional fundraising. No KOLs. Just performance.

The tokenomics are elegant yet powerful. Like Bitcoin, Bittensor’s native TAO has a fixed supply cap of 21 million, with 7,200 tokens distributed daily and supply halving every four years. This creates genuine scarcity in the form of rewards that must be earned through performance rather than speculation.

Here’s where it gets even more interesting: each subnet has its own “alpha” token that subnet participants earn. TAO holders can stake into subnets they believe in, receiving that subnet’s alpha tokens in return. Higher-performing subnets attract more TAO stake and get a larger share of daily emissions. This market-driven funding mechanism means that builders get paid only if their service actually works and successful projects automatically get more resources, while also rewarding those who staked.

These performance-based rewards mean that anyone can build but the market decides the winner. And, since its open-source software, if a project isn’t delivering, others create a better version.

This makes Bittensor a transparent competition where all metrics are public. It’s been called “capitalistic Darwinism.” In other words, create value or get out-competed.

Why Bittensor Changes Everything

Big Tech’s grip on AI is only getting stronger. Bittensor represents our best chance at wresting control and anchoring innovation in an open, transparent, and democratic environment where value accrues to the most performant innovations, rather than closed systems that benefit from outsized network effects.

For the public, Bittensor represents crypto’s original promise: coordinating human effort toward valuable outcomes without intermediaries, committees, or gatekeepers. Value gets created first through competition, then tokens reward the creators; the opposite of hoping speculation drives value.

For builders, this means skipping VC pitches, preserving equity, and getting rewarded immediately for building useful things. The most important infrastructure is being built by teams spending “$0 on marketing, $0 on exchange listings” with pure focus on value creation. Community governance ensures builders aren’t locked out from decision-making.

For users, this creates access to quality-competing services rather than marketing-budget winners. Users benefit from the upside by supporting the best projects, while community governance creates strong bonds between creators and consumers.

For investors, Bittensor offers AI exposure without having to pick individual winners. The staking mechanics drive value accrual into the network rather than siphoning it away. Investors earn upside by supporting top-performing projects while community governance gives them a voice rather than forcing them to follow a CEO’s agenda.

The timing couldn’t be better. With over $55 billion in funding going to the AI sector in Q1 2025, $1.39 billion in funding going to AI agents in the past quarter, crypto funding validates what Bittensor has already built. While others are still fundraising, world-class AI teams are already building serverless compute (SN64) and decentralized training (SN3), as well as climate prediction markets (SN18) and algorithmic trading systems (my project, SN8).

Bittensor is a new paradigm for AI innovation because it’s a proving-ground that allows the best innovations to win without artificial barriers, tilted economics, or incumbent advantages. And, as massively funded companies continue to dominate AI, it’s imperative that we nurture independent, open ecosystems that reward innovation and grit, clean and clear.

 CoinDesk: Bitcoin, Ethereum, Crypto News and Price Data Read More