Bittensor Subnets' Revenue Growth Hides Substantial Subsidy Ratio

Bittensor's AI subnets have generated an estimated $28 million to $35 million in annualized revenue from paying customers, according to network data presented at a recent summit. This figure represents a significant growth from 2024, when subnet operator revenue was close to zero.

The subnet carrying the most weight in this revenue story is Chutes, built by Rayon Labs and running as Subnet 64. Chutes sells decentralized AI inference at prices that undercut centralized providers, with DeepSeek V3.1 costing $0.27 per million input tokens and $1.00 per million output tokens.

However, an analysis published by Pine Analytics in March revealed that Chutes is currently the single largest subnet on Bittensor by emissions, pulling in roughly 14.4% of all daily TAO emissions. The estimated external revenue from paying customers for Chutes is only $1.3 million to $2.4 million a year, resulting in a subsidy ratio of between 22 to 1 and 40 to 1.

The OpenTensor Foundation has proposed a solution to this issue through the introduction of Gamma tokens, which would allow subnets to pay for services from each other using a credit pegged to a stable oracle basket. However, the implementation of Gamma tokens is still in its roadmap phase, with a target rollout date of 2027.