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Bittensor and subnets - AI broad infra (not just specifically for agents ) >Bittensor is an open source platform where participants produce best in class digital commodities including compute power, storage space, AI inference and training, protein folding, financial markets prediction and more. >TAO is the currency of the ecosystem. There will be only 21 million TAO ( same idea as bitcoin scarcity). New Tao gets created every block and handed out to people doing useful work. The amount of new TAO being created recently got cut in half ( the “halving” in Dec 2025), which means it gets scarcer over time >Think of subnets as different departments in a company, except each one is its own mini marketplace focused on one specific AI task. Each subnet consists of: - A miner: the workers. They run ai models or provide computing power. They’re competing against each other to do the best job - Validators: the judges. They test the miner’s work and score it. Good miners get more TAO, bad miners get less.The matrix of these scores, by each validator for each miner, serves as input to Yuma Consensus. - Subnet Creators: the managers. they designs the subnet and wrote the rules for what counts as “good work” - The Yuma Consensus algorithm operates on-chain, and determines emissions to miners, validators, and subnet creators across the platform, based on performance. there currently 126 of these subnets:taostats.io Each subnet functions as its own automated market maker (AMM), with two liquidity reserves, one containing TAO( τ)—the currency of the Bittensor network, and one containing a subnet specific "dynamic" currency, referred to as that subnet's alpha ( α)token. The alpha token is purchased by staking TAO into the subnet's reserve, which is initialized with a negligible amount of liquidity A subnet's economy therefore consists of three pools of currency: Tao reserves: the amount of tao (t) that has been staked into the subnet Alpha reserves: the amount of alpha (a)available for purchase Alpha outstanding: the amount of alpha (a) held in the hotkeys of a subnet's participants, also referred to as the total stake in the subnet The price of a subnet's alpha token is determined by the ratio of TAO in that subnet's reserve to its alpha in reserve. Alpha currency that is not held in reserve but is which is held in the hotkeys of subnet participants is referred to as alpha outstanding. As TAO-holders stake TAO into subnets in exchange for the subnet-specific alpha, they are essentially 'voting with their TAO' for the value of the subnet. Subnets with more staking than unstaking receive higher emissions, while subnets with net outflows receive reduced or zero emissions. This flow-based model rewards subnets that attract genuine user engagement. In return, stakers extract a share of the subnet's emissions. The bull case is pretty simple: AI demand is exploding, TAO supply is getting scarcer (halving), and if the subnets keep building real products that people actually pay for, demand for TAO goes up because you need it to use the network. There are also institutional products emerging , Grayscale and Bitwise have filed for TAO ETFs, and there's a staked TAO product listing on a Swiss exchange.(SIX SWISS EXCHANGE) The bear case is that most subnet alpha tokens still don't have clear revenue models, liquidity is thin (meaning prices can swing wildly on small trades), and it's still early enough that gaming the system is possible ( this is from my journal Lmeow)