What are the opportunities for retail investors in Bittensor's dTAO upgrade?

By: blockbeats|2025/02/11 15:15:02
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The long-awaited dTAO upgrade of Bittensor is finally set to go live on February 14. What exactly is the dTAO upgrade? You can check out @HelloLydia13's "Five-Minute Guide to Bittensor" to learn more.

For retail investors, the most significant change is that all 64 existing subnetwork projects on Bittensor will now be able to launch their own tokens. In other words, Bittensor truly has its own ecosystem now. Undoubtedly a huge positive for $TAO.

The significance of this for Bittensor is akin to Virtuals Protocol launching the AI Agent LaunchPad last October. Following that, $VIRTUAL surged by over 50 times.

What are the opportunities for retail investors in Bittensor's dTAO upgrade?


The dTAO upgrade introduces a market competition mechanism to Bittensor's Yuma consensus, fundamentally decentralizing the value discovery of subnetwork projects.

The previously root-network-voted $TAO distribution model has now transitioned to allocation based on the value ratio of $TAO and dTAO tokens in each subnetwork's dTAO pool. $TAO holders can "vote with their feet" by purchasing subnetwork tokens to determine which subnetworks should receive more $TAO rewards.

The more robust the market demand for a specific dTAO token, the more $TAO emission share the corresponding subnetwork represented by that dTAO token will receive. As dTAO token holders also benefit from this, it further stimulates market demand for the dTAO token, creating a positive feedback loop for the dTAO token's value. Therefore, to partake in the rising tide of the Bittensor ecosystem, rather than solely holding $TAO, a more stimulating approach is to stake $TAO to receive different subnetwork dTAO tokens (where "staking" here is essentially buying the corresponding subnetwork token using $TAO).

Since staking has transitioned from the previous model to trading subnetwork tokens, staking rewards in $TAO are no longer guaranteed profits. However, if one stakes into promising subnetwork tokens, they can earn additional returns. This shift will attract a lot of arbitrageurs and speculators to Bittensor.

As for how to stake into promising subnetwork tokens, one can check which subnetworks are currently receiving more $TAO emissions.



The derivative investment opportunities also include trading projects on the dTAO trading platform, including @taodotbot and @HotKeySwap, both of which are long-standing projects. The market cap of $HOTKEY is only $5 million, seemingly only 1/7 of $TAOBOT's. The well-established TAO liquidity staking protocol @TensorplexLabs also recently announced its own dTAO trading platform @BackpropFinance. However, the official announcement hasn't provided much content yet. You can check out more details here: https://x.com/TensorplexLabs/status/1888942127520075920


It's embarrassing to admit that I haven't paid much attention to the Bittensor ecosystem for a long time. So, my views above may be outdated. If you find any inaccuracies in my writing, please feel free to criticize and correct me. If you think it's well-written, I also hope for comments, shares, likes, and engagement. Thank you~

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