On December 14, Bittensor, a decentralized artificial intelligence network, will halve the issuance of its TAO token. Launched in 2021, the project combines blockchain, machine learning, and an incentivized economic model. This first halving marks a structuring milestone in its evolution, similar to the four-year bitcoin cycle.
Key Information
- •On December 14, Bittensor will carry out its very first halving, reducing the daily issuance of the TAO token from 7,200 to 3,600 units.
- •This scarcity mechanism, inspired by Bitcoin’s economic model, marks a structuring step in the project’s development.
- •The halving fits into a four-year cycle set from the protocol’s design, with a total supply capped at 21 million TAO.
- •This halving could strengthen TAO’s long-term appeal, but the real ecosystem growth will determine its lasting impact.
The Halving Mechanism: Towards a Restricted Supply of TAO
On December 14, Bittensor will halve the issuance of its TAO token, dropping from 7,200 to 3,600 units per day, following a surge in AI cryptos.
This is the first halving since the protocol’s launch in 2021, an event that fits within a monetary strategy inspired by the bitcoin model. William Ogden Moore, analyst at Grayscale Research, points out that it is a key milestone in the network’s maturation as it moves towards its supply cap set at 21 million tokens.
By opting for a fixed supply cap and a predictable issuance schedule, TAO stands out from projects with variable inflation and gains clarity for long-term investors.
Concretely, this issuance reduction aims to establish a progressive scarcity logic, while aligning the network’s economic incentives with its technical development. It is accompanied by several key elements:
- •The TAO token is issued daily through an incentive mechanism, rewarding participants for validating and performing machine learning operations on the network.
- •The new daily issuance will be limited to 3,600 TAO, exactly half the current level.
- •The total supply is capped at 21 million tokens, following the Bitcoin model, a programmed scarcity that fuels speculation about a potential long-term bullish effect.
- •This halving is the first of a four-year cycle planned from Bittensor’s initial design.
For analysts, this supply reduction represents a logical step in structuring a project that aims to combine decentralized governance, open source AI, and robust financial incentives.
Growing Adoption and an Incentive Model: A Full Ecosystem
While the TAO supply reduction is the visible event, it is the rapid evolution of Bittensor’s underlying infrastructure that increasingly intrigues.
The network relies on "subnets," specialized modules that Grayscale compares to "a Y Combinator for decentralized AI networks." These subnets operate like autonomous startups, offering various AI services within the same blockchain infrastructure.
Among the most notable projects, Chutes offers "serverless" computing for AI models, while Ridges focuses on crowdsourcing intelligent agents. This modular approach allows Bittensor to address diverse use cases while maintaining interoperability and an economic incentive logic.
Available data reveals an expanding ecosystem. More than 100 subnets are listed, with an aggregate capitalization of 850 million dollars. The platform Taostats lists 129 subnets, with a cumulative valuation nearing 3 billion dollars.
This dynamic has not escaped investors. The Inference Labs fund raised 6.3 million dollars to support the development of Subnet 2, a market dedicated to inference verification. Additionally, the company xTao, active in the Bittensor infrastructure, went public last July on the TSX Venture Exchange, a first for an actor in this ecosystem.
This halving could enhance the network’s attractiveness and affect the TAO price. The question remains whether the growing utility of its subnets will be enough to support demand. For Bittensor, this event marks less a cycle end than a real-world test of its economic model.