AI × Crypto Future Intersection: In-Depth Analysis of Five Major AI Layer1 Projects

Original Title: "AI × Crypto Future Convergence: In-Depth Analysis of Five AI Layer1 Projects"

Original Authors: Louis, Biteye

With the rapid development of AI technology, traditional blockchain architecture can no longer meet the high-performance computing and complex data processing requirements of AI applications. This has led to the emergence of Layer 1 blockchain platforms optimized for AI, which demonstrate diversification in technical architecture, application scenarios, and business models. This research provides a detailed analysis of Bittensor, Vana, Kite AI, Nillion, and Sahara, the top five AI Layer1 projects, and offers investors a comprehensive participation guide.

1. Bittensor: Decentralized AI Network Infrastructure

As an early explorer in the blockchain AI field, Bittensor is dedicated to building an open decentralized artificial intelligence collaboration network. Its goal is to break down the centralization barrier in traditional AI research and development, allowing more participants to contribute and benefit collectively. Unlike traditional centralized AI systems (such as companies like OpenAI), Bittensor has created an open peer-to-peer ecosystem where participants can receive rewards based on their contribution to the network.

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

· Root Network (Mainnet): Responsible for the coordination, validation, and TAO token issuance management of the entire system, serving as the central hub of network resource allocation

· Subnet Ecosystem: Each subnet acts as an independent AI laboratory, developing specialized solutions for specific AI application scenarios and proving their value in market competition

This design allows Bittensor to balance the overall network's stability with domain-specific expertise, providing a flexible infrastructure for the development of decentralized AI.

Ecosystem Development Progress

The number of subnets has expanded from the initial 32 to over 64, covering various AI application scenarios such as text generation, transaction signals, data labeling, and more

The active user base has reached 140,000, doubling compared to the previous year

The total market valuation of the subnet has exceeded $1 billion, with daily trading volume maintaining around $45 million

Institutional participation has significantly increased, and the well-known fund Grayscale has included TAO in its decentralized AI fund, with a weight adjustment to 29.55%

These data indicate that Bittensor is gaining more and more recognition from market participants, and its ecosystem is entering a virtuous development track.

The recent upgrade of Bittensor's dTAO (Dynamic TAO) system is a significant innovation in its economic model. The core of this upgrade lies in optimizing the token allocation mechanism of TAO, shifting from a resource allocation method relying on validators' subjective judgments to a more market-oriented allocation mechanism, allowing resources to flow more accurately to those subnets that are truly competitive.

Bittensor's original economic model has exposed several key issues in practical operation:

· Lack of Objectivity in Evaluation Mechanism: As the number of subnets increases, validators find it challenging to comprehensively and objectively assess the actual value of each subnet, leading to a gradual decrease in allocation efficiency.

· Imbalance in Power Structure: Many validators are also subnet operators, and this role overlap can easily lead to conflicts of interest. Validators may tend to favor the subnets they are involved in, or even engage in private transactions.

· Participation Barriers: Ordinary TAO holders find it challenging to directly influence the network's resource allocation decisions, and power is overly concentrated in the hands of a few validators.

To address these issues, the dTAO upgrade has introduced a market-based dynamic resource allocation system. This system transforms each subnet into an independent economic unit, with resource allocation being driven by users' actual needs.

The core innovation is the Subnet Token (Alpha Token) mechanism:

· How It Works: Users can stake TAO to receive Alpha Tokens issued by each subnet, representing the user's support for a specific subnet

· Resource Allocation Logic: The market price of Alpha Tokens serves as a signal of subnet demand intensity. Initially, all alpha tokens are priced the same, with each pool having only 1 TAO and 1 alpha token. As liquidity of the two tokens in the subnet increases, the price of the alpha token changes accordingly. TAO emissions are distributed proportionally based on the price of the subnet token among all tokens, with higher-priced subnets receiving more TAO allocation, thereby achieving automatic optimal resource allocation

This mechanism significantly improves the efficiency and fairness of resource allocation, stabilizes the value of the TAO token, and provides more ways for ordinary users to participate in network governance.

Investor Participation Strategy

For retail investors intending to participate in the Bittensor ecosystem, there are mainly the following ways:

· Liquidity Provision: Stake TAO to receive Alpha tokens from various subnets, participating in subnet ecosystem development. This method is relatively stable, allowing resource allocation based on views of different subnets to diversify risk.

· Secondary Market Investment: Directly purchase Alpha tokens of interested subnets from the trading market. However, it is important to note that Alpha tokens are currently in the early emission stage, with a relatively high inflation rate and selling pressure, so investors should carefully choose subnets with long-term development value.

· Technical Contribution: For investors with a technical background, they can choose to become network validators or subnet miners to earn rewards by validating the quality of AI models on the network or running specific subnet AI models.

The most active subnets currently include:

· Subnet 4 Targon: Focuses on AI inference services for text generation, known for its fast response speed and low cost

· Subnet 64 Chutes: Provides various API interfaces for LLMs, allowing developers to build and deploy AI applications on the Bittensor network

· Subnet 8 PTN: Focuses on the financial sector, incentivizing miners to generate accurate trading signals through a reward mechanism, covering various financial markets such as forex and cryptocurrency

· Subnet 52 Dojo: Does data annotation, encouraging users to earn tokens through data annotation. Yzi Labs has announced an investment in its parent company, Tensorplex.

II. Vana: Data Sovereignty and Value Reconstruction Platform

The Vana project focuses on addressing a core issue in today's digital economy: the ownership and value distribution of personal data. In the current internet ecosystem, users' data is mostly monopolized and controlled by large tech 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 being able to receive economic rewards from it.

As an EVM-compatible Layer 1 blockchain network, Vana's technical architecture comprises five core components:

1. Data Liquidity Layer: This is the core of the Vana network, enabling the incentive, aggregation, and validation of data assets through Data Liquidity Pools (DLPs). Each DLP is a smart contract specifically designed to aggregate specific types of data assets, such as social media data, browsing history, and more.

2. Data Portability Layer: Ensures seamless data transferability between different applications and AI models, enhancing data flexibility.

3. Universal Connectome: Tracks real-time data flow throughout the entire ecosystem, forming a data ecosystem graph to ensure system transparency.

4. Non-Custodial Data Storage: A key innovation of Vana is its unique data management approach. Users' raw data is not stored on-chain but rather in a location of their choice, such as cloud servers or personal devices, ensuring users have full control over their data.

5. Application Ecosystem: Built upon the data layer, Vana has created an open application ecosystem where developers can leverage the data accumulated in DLPs to build various innovative applications, including AI applications. Data contributors can earn dividend rewards from these applications.

This design allows Vana to protect user data privacy while creating a more equitable data value distribution mechanism, providing a crucial data foundation for the development of decentralized AI.

Latest Development Updates

Vana's funding and partnership expansion continue to progress:

In February 2025, YZi Labs announced a strategic investment in Vana, with Binance founder CZ joining as an advisor.

In terms of ecosystem development, Vana has already built data projects spanning various areas from social media data to financial prediction data, including: Finquarium (financial prediction data), GPT Data DAO (ChatGPT chat data), Reddit Data DAO (Reddit user data), Volara (Twitter data), Flirtual (dating data), and more.

Recently, Vana organized a hackathon event 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 comprehensive ecosystem around data ownership and value realization, and its growth momentum is noteworthy.

Pathways for Engagement

For investors interested in participating in the Vana ecosystem, there are several main ways to engage:

· Data Contribution: Upload your social media data, browsing data, etc., to the corresponding Data Liquidity Pool (DLP) to receive the corresponding token rewards. For example, contributing data to the Reddit Data DAO can earn you RDAT tokens. This is the most basic and also the lowest barrier to entry.

· Staking Participation: Stake Vana tokens through DataHub into a promising DLP to share Vana block rewards from the DLP. It is important to note that only the top 16 ranked DLPs are eligible for rewards, so selecting high-quality DLPs is crucial.

· Ecosystem Co-Creation: For participants with certain expertise, they can try to create a new Data Liquidity Pool. As the creator of a new DLP, you need to design specific data contribution goals, validation methods, and reward parameters, and implement a contribution proof function that can accurately assess the value of the data.

Vana represents a significant innovation at the intersection of blockchain technology, the data economy, and artificial intelligence. By establishing a decentralized data platform, Vana aims to redefine data ownership and value distribution, providing fair rewards to data creators and offering high-quality training resources for AI development.

III. Kite AI: Technological Breakthrough of an AI-Native Public Chain

Kite AI is a Layer 1 blockchain project focused on the field of AI, built on the Avalanche framework. It is dedicated to addressing various challenges faced by traditional blockchains in handling AI assets, particularly in achieving transparent rights and incentives for AI data, models, and agent contributions.

Kite AI has proposed four core technological innovations:

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

2. Composable AI Subnet: Kite AI adopts a modular architecture to support developers in building industry-specific AI collaboration ecosystems as needed. For example, in the healthcare subnet, patient data encrypted can be selectively authorized to pharmaceutical companies for AI model development, with profits distributed to data subjects, model developers, and subnet maintainers in a certain proportion, creating a multi-win ecosystem.

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

4. Decentralized Data Engine: Kite AI ensures that data creators receive fair rewards in the AI workflow. The platform has built-in compliance modules that comply with regulations such as GDPR/CCPA to meet data privacy requirements worldwide, reducing developers' compliance costs.

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

Current Development

On February 6, 2025, Kite AI launched the Incentive Testnet, the first AI native Layer 1 sovereign blockchain testnet.

The performance of the testnet upon launch was remarkable:

In less than 70 hours after the testnet went live, the number of connected wallets exceeded 100,000. As of now, a total of 1.95 million wallets have joined Incentive Testnet V1, with over 1 million wallets already interacting with AI agents, surpassing a total call count of 115 million.

The project has a strong background and is built by an experienced Silicon Valley team. The co-founders, with deep technical leadership experience in the field of artificial intelligence, have previously worked at top tech companies such as Uber, Salesforce, and Databricks. Core team members come from industry-leading companies such as Google, BlackRock, Uber, NEAR Foundation, with academic backgrounds from top institutions like MIT and Harvard.

In terms of capital support, the project has received investment from top-tier institutions such as General Catalyst, Hashed, Hashkey, Samsung Next, and has established technical partnerships with Eigenlayer, Sui, Avalanche, AWS, among others.

As a judge in Avalanche's InfraBUILDL(AI) program, Kite AI plays an active role in advancing the Avalanche AI ecosystem. This collaboration aims to position Avalanche as a leading blockchain for AI applications.

With the global data economy expected to exceed $700 billion by 2025, Kite AI is poised to become a key infrastructure for data empowerment and monetization, with promising development potential.

Participation Opportunity Analysis

There are several main ways to early participate in the Kite ecosystem:

· Testnet Participation: Kite AI's testnet is open, offering generous incentives for early participants. Investors can start participating through the official website (gokite.ai) or the testnet portal (testnet.gokite.ai), experience network functionalities, and have the opportunity to receive testnet rewards.

· Application Development: Investors with development capabilities can try deploying AI-driven DApps on Kite AI, exploring innovative scenarios such as on-chain model training and data marketplaces. The platform provides developers with rich tools and support, lowering the barrier to entry for development.

· Subnet Deployment: Kite AI has prepared a token airdrop plan for the earliest teams deploying AI subnets, encouraging developers to create specialized AI subnets. For investors with specific industry expertise, this is an opportunity to leverage their knowledge for additional rewards.

· Early Contributors Points: Users actively participating in building the Kite AI ecosystem will receive points rewards and priority ecosystem resource support, which may translate into specific tokens or other benefits in the future.

IV. Nillion: Exploring the Frontier of Privacy Computing

Nillion is redefining the way sensitive data is handled for future digital privacy protection through its unique 'Blind Computation' technology.

Nillion is a decentralized public network that operates in a non-traditional blockchain manner based on an innovative cryptographic primitive called Nil Message Compute (NMC). This project was founded in November 2021 and is led by forward-thinking innovators such as Alex Page and Andrew Masanto, aiming to create a system that can securely process high-value data without exposing sensitive details.

The core advantage of Nillion lies in its 'Blind Computation' capability—a process that allows data to remain encrypted throughout its lifecycle of storage, transmission, and processing. Its technical architecture integrates various cutting-edge privacy-preserving technologies:

· Multi-Party Computation (MPC): Enables multiple nodes to collaborate on computing functions without revealing their private inputs, achieving collaborative computation in scenarios where data is not shared.

· Fully Homomorphic Encryption (FHE): Allows direct operations on encrypted data, ensuring data remains encrypted end-to-end, providing full-process privacy protection.

· Zero-Knowledge Proof (ZKP): Provides a way to verify computations without disclosing any underlying data, enhancing the system's trustworthiness.

· Nada Language: A domain-specific language designed specifically for creating secure MPC programs, simplifying the development process of privacy-preserving applications and reducing the learning curve for developers.

Nillion's network architecture consists of three main layers: Processing Layer (responsible for secure computation), Coordination Layer (NilChain, managing inter-node communication), and Connectivity Layer (acting as a gateway to connect external systems). This multi-layered architecture enables Nillion to provide robust computational power while protecting data privacy, meeting the needs of various privacy-sensitive scenarios.

Latest Development Progress

According to the latest information, the development of the Nillion network is progressing steadily:

The Nillion mainnet is scheduled to launch in March 2025 (this month). Nillion's token has a total supply of 1 billion and is expected to be distributed at the launch of the mainnet.

In terms of funding, Nillion completed a $25 million financing round led by Hack VC on October 30, 2024. Investors included HashKey Capital, Animoca Brands, and well-known institutions, as well as angel investors from projects such as Arbitrum, Worldcoin, and Sei. This funding round brought Nillion's total funding to $45 million, providing ample financial support for the project's long-term development.

In terms of ecosystem expansion, Nillion has established integration partnerships with several leading public chains, including NEAR Protocol, Aptos, Arbitrum, Mantle, and Sei. Through collaboration with NEAR Protocol, Nillion aims to enhance privacy tools, enabling developers to innovate more effectively in the DeFi space.

In the AI ecosystem, Nillion has partnered with multiple AI-related projects, including Ritual, Crush AI, Skillful AI, and Virtuals Protocol. For example, Virtuals Protocol is currently the largest multimodal AI agent protocol. Through collaboration with Nillion, it leverages its secure computing infrastructure to support the private training and inference of AI models, achieving a perfect blend of AI and privacy.

For a more detailed introduction to Nillion's ecosystem projects, please refer to our previous article: https://x.com/BiteyeCN/status/1881297074228252702

Ecosystem Participation Strategy

With the imminent launch of the Nillion mainnet, retail investors have various ways to participate in its ecosystem:

· Tokenomics Participation: While Nillion's airdrop eligibility check closed on February 3, 2025, with the mainnet launch, there will be more opportunities to engage in Nillion's tokenomics. According to official information, the Nillion airdrop will reward up to 75 million NIL tokens to community members and early builders.

· Developer Ecosystem Participation: Nillion provides developers with rich tools and resources to support the creation of privacy-preserving applications:

· Node Deployment Kit (NDK): Simplifies the process of joining the network and managing nodes, reducing the technical barrier to entry

· Nada Language: Designed specifically for creating secure MPC programs, making it easier for developers to build privacy-preserving applications

· Application Scenarios: Developers can create Nillion-based applications in multiple domains, including:

· Artificial Intelligence: Processing data and inference without exposing sensitive information

· Personalized Agents: AI agents that store, compute, and process private data

· Privacy-Preserving Model Inference: AI models that securely process confidential data

· Privacy-Preserving Knowledge Base and Search: Data encrypted for storage while enabling search capabilities

· Network Node Operation: As a decentralized network, Nillion offers participants the opportunity to operate nodes. By running nodes, users can contribute computing resources, receive corresponding rewards, and help maintain the network's security and decentralization.

Five. Sahara AI: Building a Platform for the New AI Asset Economy

Project Development

The core idea behind Sahara AI is to build a "Human-AI Collaboration Network" that allows ordinary users, developers, and businesses to participate in the creation, deployment, and monetization of AI assets. Through this collaborative model, Sahara AI aims to lower the barrier to entry for AI, enabling every participant to share in the industry's growth dividends. The project has successfully raised a total of $43 million in funding led by Binance Labs, Polychain Capital, and Pantera Capital.

The platform's technical architecture includes three key components:

1. Sahara Blockchain: The foundation that provides a secure, transparent transaction environment and efficient AI lifecycle management for the ecosystem

2. AI Infrastructure: Supports distributed collaborative training and serving capabilities for advanced algorithms and computing frameworks

3. Sahara AI Marketplace: A decentralized trading center for AI assets

These components together form a complete ecosystem that supports the end-to-end process from data collection and annotation to model training, deployment, and monetization.

Latest Development Progress

The Sahara AI project is in a rapid development phase, and its testnet has gone through several key stages:

In December 2024, Sahara AI launched the first-stage Data Service Platform Beta testnet, attracting applications from over 780,000 users, with over 10,000 applicants receiving the first round of participation eligibility. In this stage, participants could contribute to the AI ecosystem by completing data collection, optimization, and annotation tasks and receive rewards.

In February 2025, Sahara AI initiated the second-stage testnet, expanding the platform's contributor base and introducing additional reward opportunities. This stage further enhanced user involvement in shaping the decentralized AI future.

The latest development is that Sahara AI announced the launch of the "SIWA" public testnet on March 10, 2025. This is considered the final major test before the Sahara AI mainnet launch and TGE, and it may also be the last opportunity for participants to earn airdrop rewards (referred to as "points").

Sahara AI has revealed its 2024-2025 roadmap, which includes several key milestones:

· Q4 2024: Data Service Platform and testnet launched, allowing users to earn rewards through data collection and annotation.

· Q1 2025: AI Marketplace launched, providing development tools and data service expansion capabilities to support model development, training, deployment, and introducing an early access program.

· Q2 2025: Introduction of the Sahara Studio tool suite, covering model training, deployment, and workflow management to further enhance the developer experience.

· 2025 Q3: Sahara Chain mainnet launch, providing secure, transparent on-chain infrastructure for large-scale decentralized AI, while supporting data and model assetization and trading.

On March 1, 2025, Sahara AI launched the Incubator Program aimed at discovering and supporting the world's most promising AI x Web3 innovation projects. The program focuses on two main tracks: AI Infrastructure and AI Applications, welcoming teams with an MVP or higher maturity level to participate. Successfully selected projects will have the opportunity to fully integrate into the Sahara AI ecosystem, receiving exclusive technical support, market expansion resources, and investment opportunities.

Ecosystem Participation Strategy

For users interested in participating in the Sahara AI ecosystem, here are several key participation methods:

1. Join the Waitlist and Testnet

The primary step to engage in the Sahara AI ecosystem is to join the official waitlist:

· Visit the Sahara AI official waitlist page

· Fill in the required information and submit the application form

· Selected users will receive testnet access

· Complete various tasks in the testnet to earn Sahara Points

Of particular note, the SIWA public testnet, launching on March 10, 2025, may be the final opportunity to receive airdrop rewards before the mainnet TGE. Users interested in participating should act quickly to apply.

2. Participate in Legends Event

Sahara AI also offers an event called "Legends," allowing users to collect shards and forge NFTs:

· Visit the Sahara Legends event page, log in, and connect your wallet

· Explore five unique desert-themed areas to start collecting shards

· Invite friends to join the event to earn additional shards

· Use the collected shards to forge the Soulbound Desert Guardian NFT

· Collect a mascot NFT from each desert and merge them to create an exclusive Fennec Fox NFT

3. Data Contribution Platform

The data contribution platform of Sahara AI provides users with the opportunity to earn rewards through data contribution:

· Participants can choose high-value data tasks from various fields such as the creator economy, finance, and science

· Upon task completion, the platform will reward users based on their contribution, accuracy, and consistency

· A leaderboard is in place to encourage top performers

· All rewards are distributed in the form of points, laying the foundation for token distribution within the subsequent ecosystem

Six, Summary

AI Layer 1 is at a critical stage of rapid evolution. This emerging track is restructuring the underlying architecture of AI technology through decentralized infrastructure. From data empowerment to computing resource allocation, from model training to application deployment, these platforms are breaking through the limitations of traditional centralized AI systems, building a more open, transparent, and efficient technical ecosystem. In the future, this track will continue to drive technological innovation, advancing artificial intelligence towards a more decentralized and collaborative development direction.

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