Bittensor completes first TAO halving, cutting daily issuance as decentralized AI network matures

Crypto's other halving: Bittensor's first 4-year cycle seen as 'maturation' milestone

Bittensor's first token halving arrives Dec. 14, cutting TAO issuance in half as the AI-focused network adopts a Bitcoin-style fixed supply model. With Bitcoin now in its fourth quadrennial halving, other decentralized projects have adopted similar supply-cut cycles -- and Bittensor is approaching its first since launching in 2021. Bittensor, a decentralized, open-source machine-learning network built around specialized "subnets" that incentivize marketplaces for AI services, is expected to undergo its inaugural halving on or around Dec. 14. At that point, issuance of its native token, TAO (TAO), will drop to 3,600 per day from the current 7,200. Grayscale Research analyst William Ogden Moore called the event a "key milestone in the network's maturation as it progresses toward its 21 million token supply cap," matching Bitcoin's (BTC) fixed limit. Digital-asset investors and network participants often view a hard-capped supply as a potential value catalyst: if adoption grows and token demand rises, a finite issuance model can be more appealing than pre-mined tokens or fiat currencies with effectively unlimited supply. Cointelegraph reported on Bittensor in May during a conversation with DNA Fund's Chris Miglino, whose AI compute fund is heavily involved in the Bittensor ecosystem. "The biggest thing that we're working on in the whole ecosystem is our AI compute fund, where we've been entrenched into the TAO ecosystem," Miglino said. Related: Grayscale introduces Bittensor and Sui trust products Grayscale describes Bittensor's subnets as a kind of "Y Combinator for decentralized AI networks," since each operates like a startup building a specialized product or service. CoinGecko currently lists over 100 Bittensor subnets, with a combined market cap exceeding $850 million. Taostats, which tracks the ecosystem more comprehensively, shows 129 subnets with a total market cap closer to $3 billion. In either case, subnet valuations have grown significantly since launch, according to Grayscale Research. The largest include Chutes, which provides serverless compute for AI models, and Ridges, a subnet focused on crowdsourcing the development of AI agents. The expansion underscores growing demand for decentralized AI infrastructure as developers race to build and scale new AI products and applications. As Miglino told Cointelegraph, decentralized AI may prove to be blockchain's most significant use case since Bitcoin, driven largely by that demand.

Bittensor to halve TAO issuance on December 14

Bittensor, a decentralized open-source machine learning network launched in 2021, will undergo its first token halving on December 14. This event halves daily issuance of its native token TAO from 7,200 to 3,600 tokens, advancing toward a 21 million token supply cap modeled after Bitcoin. The network operates through specialized subnets that create marketplaces for AI services by incentivizing participation. Each subnet functions independently, fostering development in various AI domains. This structure has driven the ecosystem's growth since inception, as developers integrate blockchain incentives with artificial intelligence applications. Grayscale Research analyst William Ogden Moore described the halving as a key milestone in the network's maturation as it progresses toward its 21 million token supply cap. This fixed limit aligns Bittensor with Bitcoin's supply mechanism, where issuance decreases over time in predetermined cycles. Digital-asset investors and network participants regard the hard-capped supply as a potential value catalyst. In scenarios of increasing adoption and rising token demand, the finite issuance contrasts with pre-mined tokens or fiat currencies that permit unlimited supply expansions. Cointelegraph covered Bittensor in May through a discussion with Chris Miglino of DNA Fund. Miglino explained the fund's focus on AI compute initiatives within the ecosystem. He stated, "The biggest thing that we're working on in the whole ecosystem is our AI compute fund, where we've been entrenched into the TAO ecosystem." This involvement underscores the fund's commitment to enhancing computational resources for Bittensor's operations. Grayscale characterizes Bittensor's subnets as a Y Combinator for decentralized AI networks, with each subnet resembling a startup that develops targeted products or services in AI. CoinGecko records over 100 active subnets, collectively holding a market capitalization exceeding $850 million. Taostats provides a more extensive tally, listing 129 subnets with a total market cap approaching $3 billion. These valuations represent substantial increases from the network's early days, as documented by Grayscale Research. The growth reflects broader interest in decentralized AI solutions. Among the prominent subnets, Chutes delivers serverless compute capabilities tailored for AI models, enabling efficient execution without dedicated infrastructure management. Ridges concentrates on crowdsourcing efforts to advance AI agent development, aggregating contributions from multiple participants to refine intelligent systems. This proliferation of subnets highlights escalating demand for decentralized AI infrastructure. Developers actively construct and expand AI products and applications, necessitating robust, distributed computing environments. As Miglino noted to Cointelegraph, decentralized AI stands as blockchain's most significant application since Bitcoin, propelled by this surging demand for innovative AI tools. Venture capital has increasingly targeted Bittensor subnets. Inference Labs secured a $6.3 million funding round to bolster Subnet 2, which establishes a marketplace dedicated to verifying AI inference processes. This platform ensures accuracy in model outputs, supporting reliable AI deployments across the network. Separately, xTao, a developer of infrastructure tools and services for the Bittensor ecosystem, commenced trading on the TSX Venture Exchange in July. As a newly public entity, xTao aims to provide essential support for ecosystem expansion, including software and operational enhancements.

Bittensor Halving Takes Effect -- What Next After Four Years of TAO?

* The Bittensor halving occurred on Sunday, Dec. 13. * Post-halving, the network has reduced mining rewards to 0.5 TAO per block. * The Bittensor ecosystem has come a long way in four years, and there is more to look forward to. On Monday, Dec. 14, Bittensor executed its first halving, slashing mining rewards from one to 0.5 TAO per block. At the conclusion of its first epoch, the decentralized AI platform is expanding rapidly. Post-halving, reduced emissions could spur further growth, but only for ecosystem participants that successfully adapt to the new economic reality. Bittensor Halving Explained Bittensor's consensus model draws inspiration from Bitcoin (BTC), but introduces several crucial differences. Whereas Bitcoin consensus is a numbers game that rewards computational power -- or, occasionally, pure luck -- Bittensor miners compete to complete dynamic tasks tied to real-world applications. Stacking GPUs alone doesn't guarantee TAO rewards. Hardware capacity certainly plays a role, but a miner that delivers better outcomes with fewer resources can outperform one that relies on brute force. Like Bitcoin, Bittensor emissions halve roughly once every four years. With a block time of roughly 12 seconds, the network minted about 7,200 TAO per day during the first epoch. Post-halving, that number drops to 3,600 TAO. But with the broader crypto market looking bearish, can TAO emulate BTC's post-halving rallies? TAO Supply and Adoption According to James Altucher, an advisor at the Bittensor treasury company TAO Synergies, the latest supply crunch comes just as the most successful "subnets" are starting to reach a wider audience. Four years after Bittensor launched, there are now 129 active subnets powering everything from quantitative trading algorithms (SN15, SN8) to AI translation (SN59) and 3D image generation (SN17). Some of the most successful include platforms like Chutes (SN64), Gradients (SN56), and Targon (SN4), which have emerged as powerful enablers of open-source AI, relied on by a growing community of developers to train, finetune, and run models. For instance, Chutes now has over 650,000 users and thousands of GPU nodes running AI models that process tens of billions of tokens each day. As adoption rises, so does demand for TAO. "After Bitcoin's first halving, it went up 7,000% over the next 18 months," Altucher observed, adding: "I don't know if that will happen with TAO [...] But who knows?" Growing the Decentralized Economy While Bittensor is usually viewed as an AI network, "you can incentivize it to produce almost any intelligence commodity you want," observed Chris Zacharia, who founded the subnet incubator Bitstarter. Tasks assigned to miners usually involve machine learning, but they don't have to. TAO rewards go to the best solution, regardless of the path taken to get there. This point isn't lost on Arrash Yasavolian, the co-founder and CEO of Taoshi (SN8) -- a decentralized marketplace for trading signals. Quantitative traders who supply signals are mostly using AI, Yasavolian explained, but he acknowledged some may be using a hybrid approach that involves human input. Taoshi grades their results, rewarding strategies that maximize returns and minimize risk. Bittensor's technology-agnostic incentive framework explains why a growing number of subnets are orienting toward trading and finance. While the first generation of applications sought to replicate Big Tech chatbots and other centralized AI services, Bittensor increasingly powers trading bots, price prediction, arbitrage, and liquidity optimization. In situations where outcomes are judged by quantifiable, real-world performance, competition within a decentralized network drives significant improvements. The Rise of Subnet Alpha When Bittensor was launched in 2021, miners were only rewarded in TAO, with each subnet being allocated a share of emissions according to its overall stake size and validator votes. However, in February 2025, the network introduced a new incentive system, allowing miners and stakers to earn subnet-specific "Alpha" tokens, also known as dTAO. Since its launch, the reception to dTAO has been mixed. While many subnet tokens have performed poorly, general enthusiasm remains high. For instance, TAO Synergies, the Bittensor treasury company, has allocated a portion of its reserves to Alpha staking. It employs a strategy that combines broad exposure with more targeted, venture-style investing focused on select subnets. Post-halving, dTAO will face the same supply tightening as Bittensor's network token. With fewer emissions and some of the larger subnets attracting significant attention, Bittensor's halving could push Alpha to new heights. What Does the Future Hold for Bittensor? At the dawn of Bittensor's second epoch, successful subnets are the network's growth engine. However, if the creation of separate subnets in 2023 marked Bittensor's "Cambrian explosion," caps on their number have helped focus that explosive energy, explained Steffen Cruz, former CTO at Bittensor's Opentensor Foundation, and the co-founder of Macrocosmos. By limiting the number of slots available, Bittensor ensures that only the strongest subnets survive. Post-halving, there are discussions about potentially doubling the current cap, from 128 to 256. But Cruz is wary of rasing it too soon. Each time Bittensor has increased the subnet limit, it has taken some time for "evolutionary pressure" to take effect, he observed. Before raising the cap again, "I would want to hit a minimum of 50% of all subnets being really strong" Cruz said. For now, "there's teams that have work to do before they reach that mature state," he concluded.