The Rise of AI Layer 1 Blockchain Platform: In-Depth Analysis of Five Major Projects

With the rapid development of artificial intelligence technology, traditional Blockchain architectures can no longer meet the high-performance computing and complex data processing requirements needed for AI applications. This has led to the emergence of Layer 1 Blockchain platforms specifically optimized for AI, which exhibit diverse characteristics in terms of technical architecture, application scenarios, and business models. This article provides an in-depth analysis of five leading AI Layer 1 projects: Bittensor, Vana, Kite AI, Nillion, and Sahara.

Bittensor: Decentralized AI Network Infrastructure

Bittensor, as an early explorer in the Blockchain AI field, is committed to building an open decentralized artificial intelligence collaboration network. Its goal is to break down the centralized barriers in traditional AI development, allowing more participants to contribute and benefit together.

Unlike traditional centralized AI systems, Bittensor has created an open peer-to-peer ecosystem where participants can receive corresponding rewards based on their contributions to the network.

Bittensor's technical architecture adopts a dual-layer structural design:

• Root Network (Mainnet): Responsible for the coordination, verification, and issuance management of TAO tokens for the entire system, serving as the hub for resource allocation in the entire network.
• Subnet Ecology: Each subnet is like an independent AI laboratory, developing specialized solutions for specific AI application scenarios and proving its value in market competition.

This design allows Bittensor to balance the overall stability of the network with the expertise in various fields, providing a flexible infrastructure for the development of decentralized AI.

Ecological Development Progress

• The number of subnets has expanded from the initial 32 to more than 64, covering various AI application scenarios such as text generation, trading signals, and data labeling.
• The number of active users has reached 140,000, doubling compared to the previous year.
• The total market valuation of the subnet exceeds 100 million USD, with a daily trading volume maintained at around 45 million USD.
• Institutional participation has significantly increased, and well-known funds have included TAO in their decentralized AI fund, adjusting its weight to 29.55%.

These data indicate that Bittensor is gaining recognition from an increasing number of market participants, and its ecosystem is entering a positive development track.

The recent dTAO (dynamic TAO) system upgrade completed by Bittensor is an important innovation in its economic model. The core of this upgrade lies in optimizing the allocation mechanism of the TAO token, shifting from a resource allocation method reliant on the subjective judgment of validators to a more market-oriented allocation mechanism, allowing resources to flow more precisely to those subnetworks that are truly competitive.

The original economic model of Bittensor has exposed several key issues during actual operation:

1. The assessment mechanism lacks objectivity: As the number of subnets increases, it becomes difficult for validators to comprehensively and objectively evaluate the actual value of each subnet, leading to a gradual decline in allocation efficiency.

2. Imbalance of power structure: Many validators are also subnet operators, and this overlap of roles can easily lead to conflicts of interest. Validators may favor the subnets they participate in and even engage in private transactions.

3. Participation barriers: Ordinary TAO holders find it difficult to directly influence the network's resource allocation decisions, with power overly concentrated in the hands of a few validators.

To address these issues, the dTAO upgrade introduced a dynamic resource allocation system based on market mechanisms.

This system transforms each subnet into an independent economic unit, driven by the actual needs of users to allocate resources. Its core innovation is the subnet token (Alpha token) mechanism:

• Operating principle: Users can obtain Alpha tokens issued by various subnetworks by staking TAO, and these tokens represent the users' support for specific subnetworks.
• Resource allocation logic: The market price of Alpha tokens serves as a signal to measure the demand intensity of the subnet. Initially, the price of alpha tokens is the same, with only 1 TAO and 1 alpha token in each pool. As liquidity of both types of tokens in the subnet is added, the price of alpha tokens will also change accordingly. The distribution of TAO is proportionally allocated based on the price of subnet tokens among all tokens, with higher-priced subnets receiving more TAO allocation, thereby achieving automatic optimization of resource allocation.

This mechanism significantly enhances the efficiency and fairness of resource allocation, solidifying the value of the TAO token and providing more avenues for ordinary users to participate in network governance.

The currently most active subnets include:

• Subnet 4 Targon: Focused on AI inference services for text generation, characterized by fast response times and low costs.
• Subnet 64 Chutes: Provides API interfaces for various LLMs, allowing developers to build and deploy AI applications on the Bittensor network.
• Subnet No. 8 PTN: Focused on the financial sector, incentivizing miners to generate accurate trading signals through a reward mechanism, covering various financial markets such as foreign exchange and cryptocurrencies.
• Subnet 52 Dojo: Perform data labeling, encouraging users to earn tokens through data labeling.

Vana: Data Sovereignty and Value Reconstruction Platform

The Vana project focuses on addressing a core issue in today's digital economy: the ownership of personal data and the distribution of its value. In the current internet ecosystem, users' data is mostly monopolized and controlled by large technology companies, while the users who actually create this data rarely benefit from it. Vana's innovation lies in establishing an ecosystem where users truly own and control their own data, while also being able to derive economic returns from it.

As an EVM-compatible Layer 1 Blockchain network, Vana's technical architecture consists of five core components:

1. Data Liquidity Layer: This is the core of the Vana network, which achieves the incentivization, aggregation, and verification of data assets through Data Liquidity Pools (DLPs). Each DLP is a smart contract specifically designed to aggregate certain types of data assets, such as social media data, browsing history, etc.
2. Data Portability Layer: Ensures that user data can be conveniently transferred between different applications and AI models, enhancing the flexibility of data use.
3. Universal Connectome: Track the real-time data flow within the entire ecosystem, forming a data ecological map to ensure the transparency of the system.
4. Non-custodial data storage: One of Vana's significant innovations is its unique data management approach. Users' raw data is not stored on the blockchain but instead is chosen by users to be stored in locations such as cloud servers or personal devices, ensuring that users have complete control over their own data.
5. Application Ecosystem: Based on data, Vana has built an open application ecosystem where developers can utilize the data accumulated by DLP to create various innovative applications, including AI applications, while data contributors can receive dividend rewards from these applications.

This design enables Vana to create a fairer data value distribution mechanism while protecting user data privacy, providing an important data foundation for the development of decentralized AI.

Latest Developments

Vana's financing and partnership expansion continue to advance:

• In February 2025, a certain laboratory announced a strategic investment in Vana, and the founder of a certain trading platform joined as an advisor.
• In terms of ecological construction, Vana has built multiple data projects covering various fields from social media data to financial forecast data, including: Finquarium (financial forecast data), GPT Data DAO (ChatGPT chat data), Reddit Data DAO (Reddit user data), Volara (Twitter data), Flirtual (dating data), etc.
• Recently, Vana organized a hackathon during Eth Denver, offering a prize pool of up to fifty thousand dollars to incentivize developers to build DataDAO and AI applications based on Vana data, further expanding its ecosystem.

These developments indicate that Vana is actively building a complete ecosystem around data ownership and value monetization, and its growth momentum is worth paying attention to.

Kite AI: Technical Breakthrough of AI Native Blockchain

Kite AI is a native Layer 1 Blockchain project focused on the AI field, built on the Avalanche framework. It aims to address various challenges faced by traditional blockchains when handling AI assets, particularly how to achieve clear rights and incentives for AI data, models, and agent contributions. Kite AI proposes four core technological innovations:

1. PoAI Consensus Mechanism: Proof of Attributed Intelligence is a consensus mechanism pioneered by Kite AI, which accurately tracks the value contributions of data, models, and AI agents through an on-chain verifiable contribution record system. The project has designed a dynamic reward pool mechanism that allocates profits according to contribution proportions, effectively addressing issues such as "data black box" and "model plagiarism" in the traditional AI economy.

2. Composable AI Subnet: Kite AI adopts a modular architecture that allows developers to build industry-specific AI collaborative ecosystems as needed. For example, in the healthcare subnet, patient data can be encrypted and selectively authorized to pharmaceutical companies for AI model development, with profits distributed among data subjects, model developers, and subnet maintainers according to a certain ratio, creating a win-win ecosystem for multiple parties.

3. AI Native Execution Layer: Kite AI is building an on-chain AI native execution layer specifically for handling AI computation tasks such as inference, embedding, and fine-tuning/training. Users can authorize smart contract wallets to execute inference calls through this layer and interact with models. This execution layer not only supports Blockchain transactions and state changes but also integrates a confidential computing environment (such as Trusted Execution Environment TEE) to ensure data security and privacy protection during the computation process.

4. Decentralized Data Engine: Kite AI ensures that data creators receive fair compensation in the AI workflow. The platform includes compliant modules that meet regulations such as GDPR/CCPA, satisfying data privacy requirements worldwide and reducing compliance costs for developers.

These technological innovations enable Kite AI to create a more equitable and transparent value distribution environment for AI developers and data providers, promoting the decentralized development of AI technology.

Development Status

Kite AI launched the incentive testnet on February 6, 2025, which is the first AI-native Layer 1 sovereign Blockchain testnet. The testnet performed exceptionally well after going live:

• Less than 70 hours after the test went online, the number of connected wallets exceeded 100,000. As of now, a total of 1.95 million wallets have joined the incentive test network V1, of which over 1 million wallets have interacted with AI agents, with a total of more than 115 million calls.

• The project background is strong, built by an experienced Silicon Valley team, with co-founders having deep technical leadership experience in the field of artificial intelligence and having worked at several top tech companies. Core team members come from industry-leading enterprises and have academic backgrounds from top universities.

• In terms of capital support, the project has received investments from several top institutions and has established technical partnerships with multiple blockchain platforms.

• As a member of the selection committee for the AI program on a certain blockchain platform, Kite AI plays an active role in promoting the development of the platform's artificial intelligence ecosystem. This collaboration aims to establish it as a leading blockchain for AI applications.

• As the global data economy is expected to exceed 70 billion USD by 2025, Kite AI is poised to become an important infrastructure for data rights confirmation and monetization, and its development potential is worth looking forward to.

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