Bittensor's Path Forward: Dynamic TAO and Smart Contracts

Key Insights

• Bittensor, one of the leading AI x Crypto protocols, has two major network upgrades on the horizon: Dynamic TAO and EVM compatibility.
• Dynamic TAO, which has been in development for most of this year, removes some of the network's centralization issues. Specifically, it will introduce a market-based mechanism for determining TAO emissions, whereas now emissions are generally determined by a handful of large TAO holders.
• EVM compatibility will bring smart contract functionality to Bittensor, allowing developers to build onchain applications.
• Together, these upgrades introduce new yield opportunities and, more broadly, change the risk environment for TAO holders and validators on the network.

The AI x Crypto vertical has exploded over the past year, driven and evidenced by the ~$370M in pre-seed and seed year-to-date funding. Despite the flurry of newly-funded projects pouring into the space, Bittensor continues to cement itself as a cornerstone piece of the AI x Crypto space.

However, the path forward for the protocol remains in flux. Two major upgrades, Dynamic TAO and EVM compatibility, will usher in a new era for Bittensor. Together, these releases shift Bittensor and its ecosystem away from its largely passive yield status quo and into an entirely new risk/reward environment. New yield opportunities will be available for risk-on TAO holders, and by the same token, new capital risks will be introduced into the system.