Bittensor's TAO Token Surges 60% as Decentralized AI Gains Traction
2min read Bittensor, a platform centered around incentivizing contributions to AI systems, has seen a surge in interest from crypto investors. The native token, tao, has risen by approximately 60% in the past month, and several crypto funds have taken significant positions in TAO. The growing excitement around decentralized AI has further propelled Bittensor into the spotlight. The platform allows individuals to contribute intelligence to AI systems and earn TAO tokens based on the value of their contributions, fostering a permissionless and open environment for AI coordination.
Investors and builders are increasingly drawn to Bittensor due to its unique positioning within the decentralized AI narrative. The idea that AI should not be controlled by centralized entities like OpenAI or nation-states resonates strongly with the crypto community. Joscha Kuplewatzky, an investment manager at Wintermute Ventures, highlighted the intersection of AI and blockchain as a dominant narrative at Token2049 Dubai, suggesting that TAO could serve as a proxy for investors seeking exposure to the AI crypto space. This narrative is expected to benefit Bittensor structurally as more AI projects launch as subnets within its ecosystem.
Recent developments have significantly increased Bittensor's visibility. The Dynamic TAO (dTao) upgrade in February introduced "alpha" tokens for subnets, fundamentally shifting market dynamics while maintaining TAO's central role. Additionally, Bittensor's implementation of Ethereum Virtual Machine (EVM) compatibility in late 2024 and TAO's listing on coinbase have added more liquidity and visibility to the network. These upgrades have made it easier for developers to build on Bittensor, attracting more attention from the crypto community.
As funding for crypto-AI projects heats up, with recent raises totaling around $200 million, Bittensor stands out by positioning itself as a coordination layer for all AI markets. Unlike other projects that focus on single AI markets, Bittensor aims to integrate various AI applications into its ecosystem. Joseph Jacks, founder and general partner of OSS Capital, an investor in TAO, argues that Bittensor's ecosystem could benefit from the integration of other AI projects as subnets, potentially creating more valuable and diverse applications.
Bittensor's future hinges on the success of its subnets in producing applications with real traction. Tekin Salimi, founder and managing partner of dao5, emphasizes that the individual subnets must achieve product-market fit to attract a critical mass of users. For Bittensor to thrive, some subnets need to generate profits and sustain themselves without relying on TAO inflation. Early backers like dao5, DCG, and Polychain have significant holdings in TAO, indicating their confidence in the platform's long-term potential.
Robert Myers, CEO of Manifold Labs, a Bittensor ecosystem-focused company, also underscores the importance of subnet fundamentals for the network's long-term strength. The quality and growth of subnets will determine Bittensor's success, as they must produce applications with real value to sustain the ecosystem. Sami Kassab, managing partner of Unsupervised Capital, highlights the importance of miners in maintaining Bittensor's performance. If miners find better incentives elsewhere, the network could suffer, emphasizing the need for a strong and motivated mining community.
Unsupervised Capital recently launched a Bittensor-focused liquid fund, aiming to accumulate more TAO for its limited partners by investing in subnets with asymmetric upside. The fund seeks to identify mispriced tokens and back undiscovered teams with real potential, leveraging decentralized AI to win in various markets. The bet Bittensor investors are making is that breakout applications will emerge, and subnet teams will continue to improve, a trend already visible in the ecosystem. Max Bronstein, an early TAO backer, notes the significant improvement in developer quality over the past year, expecting this trend to accelerate as more builders enter the ecosystem and funding becomes more accessible.
Mitch Boom of Taofu echoed this sentiment, reflecting on Bittensor's first event, Endgame, held in Austin. The builder sentiment around Bittensor was solid, and the event's atmosphere was positive, indicating a growing community of developers and investors committed to the platform's success. As with much of the crypto space, the infrastructure for Bittensor is in place, but the applications are still in development, with the potential for significant growth and innovation in the future.
