Bittensor Subnets Rake in Millions, But Cheapest Option Still Relies on Massive Subsidy

Bittensor's subnets have achieved significant revenue growth, with an estimated $28 million to $35 million in annualized revenue from paying customers. This growth is attributed to subnets like RedTeam and Score, which have landed actual commercial contracts. For example, RedTeam protects over a billion weekly transactions for a Fortune 500 financial institution, while Score has deployments across thousands of carwash locations.

However, Chutes, a subnet built by Rayon Labs, is the single largest subnet on Bittensor by emissions, pulling in roughly 14.4% of all daily TAO emissions. This has led to a subsidy ratio of 22 to 1 to 40 to 1, where TAO holders are essentially paying to subsidize inference bills for users. Pine Analytics estimated that Chutes' actual external revenue from paying customers is only $1.3 million to $2.4 million a year.

Bittensor has introduced Gamma tokens, which are meant to allow subnets to pay for services from each other without relying on emissions. The idea is to turn subnet emissions into a reinvested operating budget rather than a payout that gets dumped for cash. However, the rollout of Gamma tokens is not expected until 2027.

The current subsidy math only works as long as TAO's market value makes handing out emissions tolerable. If the token falls further, the gap between what Chutes pays out and what it actually earns from customers will become harder to justify.