Bittensor's Huge Upgrade

Yesterday, the crypto-powered, open-source AI network Bittensor launched its long-awaited dTAO upgrade, its most pivotal economic overhaul to date. Let's catch you up on why this matters and what to expect going forward.

dTAO, or dynamic TAO, marks a major change in Bittensor’s tokenomics by giving each of the network's specialized subnets its own token, paired with TAO in a dedicated liquidity pool.

Instead of subnets competing for a shared TAO reward and relying on a single group of validators to rank them, each subnet’s value now rises or falls based on genuine demand via the users, stakers, and validators who adopt it.

This approach tackles the scalability challenge of ranking an ever-growing list of subnets, but it also enforces true market-based valuations, letting the most useful subnets thrive while less valuable ones fade.

Essentially, the entire network “game” is now different: 

• Miners, who provide the AI services or computational work that make each subnet useful, now earn the subnet’s own token instead of TAO, forcing them to decide between quick selling and long-term investment. 
• Stakers, who secure the network by locking up tokens, can no longer just stake TAO for guaranteed rewards—they now have to pick specific subnet tokens to buy, and they also risk missing out if they back the wrong ones. 
• Validators, who measure and manage the performance of subnets, must hold a given subnet’s token to validate it, turning their choice of which subnets to serve into a high-stakes bet. 
• Finally, owners, who create each subnet, receive their rewards in that subnet’s token and must build genuine value or hype or else risk devaluing their project’s currency.

Over the coming weeks, expect some wild volatility in everything Bittensor as the network adjusts to its new economic model, packed with some big but planned downward pressure around subnets given the Root Proportion sell-pressure mechanism that will be pronounced during these early days.

In the meantime, if you're interested in diving deeper into the Bittensor ecosystem, it’s best to study up on the subnets out there. Also, take a look at some of the initial venues for interacting with dTAO!