Bittensor (TAO), a digital currency focused on artificial intelligence (AI), has become a standout performer, surging by an impressive 109% in the last month and reaching a market capitalization of $2.9 billion.
To grasp why this growth occurred, it’s crucial to understand the platform’s foundation and the factors that have attracted investors, propelling it to nearly $3 billion in market value in a short period.
Bittensor’s Transition and Network Upgrade Proposal
According to a researcher at Messari, Bittensor has grown from a small crypto-AI project to gaining lots of attention in the open-source AI community. One big reason for this is a proposed network upgrade called Dynamic TAO.
In Bittensor, there are special networks called subnets, each for different machine learning tasks or resources. These subnets provide different services like AI chat platforms, tools for predicting financial markets, and storage solutions for data.
But there are two main problems with the current system: some people have too much control over emissions, and the system isn’t scalable. To fix this, the foundation wants to introduce Dynamic TAO. This new system would replace the Root Network with a more automated and market-based way to distribute emissions.
With Dynamic TAO, each subnet would have its own token and a pool of TAO tokens. Emissions would be given out based on how valuable these subnet tokens are on the market. This would shift away from a system controlled by a few validators to a more decentralized and market-driven one.
Dynamic TAO Proposal and Potential Impact on TAO
In Bittensor, you can’t trade subnet tokens outside the system to protect TAO’s value. If you want to switch between subnet tokens and TAO, you’d use the protocol’s liquidity pools. This is similar to staking, where you buy and lock up TAO in a subnet pool, hoping its value increases.
This setup is expected to create strong demand for TAO because people need it to get subnet tokens. For instance, if subnets are valued at $1 billion collectively, with a 10% weekly trading volume, the demand for TAO could rise by 2 – 4x as people have to buy TAO before getting subnet tokens.
The Dynamic TAO plan might turn Bittensor into an “AI Casino,” which could benefit the platform and increase the token’s price.
The 1-hour chart shows TAO’s price surge over the past 24 hours. Source: TAOUSD on TradingView.com
Currently, the TAO token is being traded at $481, showing a 12% rise in the last 24 hours. It’s been showing consistent growth, with an 8% increase over the past week and a remarkable 85% surge over the last two weeks.
Moving forward, how well the protocol can draw in new investors and developers will decide where TAO’s price goes next. There’s a chance it could exceed its highest value ever of $521, reached on February 6.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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