In-depth Analysis of AI Layer 1 Projects: Five Major Platforms Promoting Decentralization in AI Development

With the rapid development of AI technology, traditional blockchain architectures have struggled to meet the high-performance computing and complex data processing requirements of AI applications. This has led to the emergence of Layer 1 blockchain platforms specifically optimized for AI, which exhibit diversified characteristics in terms of technology 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: Decentralization 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 the centralized barriers in traditional AI research and development, allowing more participants to contribute and benefit together.

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

The technical architecture of Bittensor adopts a dual-layer structure 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 within the entire network.
• Subnet Ecosystem: Each subnet acts 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 stability of the overall network with the expertise of various fields, providing a flexible infrastructure for the development of Decentralization AI.

Ecological Development Progress

• The number of subnets has expanded from the initial 32 to over 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 valuation of the subnet market exceeds $100 million, with a daily trading volume maintained at around $45 million.
• Institutional participation has significantly increased, with well-known funds incorporating TAO into their Decentralization 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 distribution mechanism of the token TAO, shifting from a resource allocation method that relies on the subjective judgment of validators to a more market-oriented distribution mechanism, allowing resources to flow more precisely to subnets that truly have competitive advantages.

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 assess 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 are involved 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 subnets by staking TAO, which represent the users' support for specific subnets.
• 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 the two types of tokens in the subnet is added, the price of alpha tokens will also change accordingly. The emission of TAO is proportionally allocated based on the price of subnet tokens among all tokens, with subnets that have higher prices receiving more TAO allocation, thereby achieving automatic optimization of resource allocation.

This mechanism significantly improves 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 Targon 4: Focused on text generation AI inference services, characterized by fast response speed and low cost.
• Subnetwork 64 Chutes: Provides API interfaces for various LLMs, allowing developers to build and deploy AI applications on the Bittensor network.
• Subnet 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 No. 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, user 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 derive economic returns from it.

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

1. Data Liquidity Layer: This is the core of the Vana network, which achieves incentives, aggregation, and verification of data assets through Data Liquidity Pools (DLP). 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 easily transferred between different applications and AI models, enhancing the flexibility of data usage.
3. Universal Connectome: Tracking the real-time flow of data within the entire ecosystem to form a data ecological map, ensuring the transparency of the system.
4. Non-custodial data storage: An important innovation of Vana is its unique data management approach. Users' raw data will not be on-chain but will be stored in locations chosen by the users, 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 use 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 Decentralization AI.

Latest developments

Vana's financing and cooperation expansion continues to advance:

• In February 2025, a venture capital laboratory announced a strategic investment in Vana, and the founder of a well-known exchange joined as an advisor.
• In terms of ecological construction, Vana has built data projects covering multiple fields, ranging 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), etc.
• Recently, Vana organized a hackathon during Eth Denver, offering a high prize pool 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 realization, and its momentum is worth paying attention to.

Kite AI: Technical Breakthrough of AI-Native Public Chain

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 transparent rights and incentive issues 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 precisely 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 distributes earnings based on contribution ratios, effectively addressing issues such as "data black box" and "model plagiarism" found in traditional AI economies.

2. Composable AI Subnet: Kite AI adopts a modular architecture, allowing developers to build industry-specific AI collaborative ecosystems on demand. For example, in the healthcare subnet, patient data can be encrypted and selectively authorized for pharmaceutical companies to use in AI model development, with profits distributed among data subjects, model developers, and subnet maintainers in a certain proportion, 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 designed to handle AI computation 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. This execution layer not only supports blockchain transactions and state changes but also integrates confidential computing environments (such as Trusted Execution Environments 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 within the AI workflow. The platform includes compliance modules that adhere to regulations such as GDPR/CCPA, meeting data privacy requirements worldwide and reducing compliance costs for developers.

These technological innovations enable Kite AI to create a fairer and more transparent value distribution environment for AI developers and data providers, promoting the decentralization 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 impressively 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 more than 1 million wallets have interacted with AI agents, with a total of over 115 million calls.

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

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

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

• With the global data economy expected to exceed $70 billion 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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