Investment Memo · EV3 Ventures
Investment thesis
EV3 expects decentralized AI's killer app to emerge from Bittensor within 18 months, driving a re-rating of TAO comparable to leading AI companies and smart contract platforms.
We believe decentralized AI’s “killer app” will emerge from the Bittensor ecosystem in the next 18 months , driving a material re-rating of TAO to valuations comparable to leading centralized AI companies (2-15x upside to OpenAI/Anthropic) and smart contract platforms (10-30x upside to Ethereum/Solana).
Traction
Bittensor is the leading decentralized AI network by mind share, market cap, and trading volume, connecting an estimated $150 million worth of GPUs.
Bittensor has since become the leading decentralized AI network by mind share , market cap and trading volumes , connecting an estimated $150m worth of GPUs and powering intelligence comparable to GPT-3.5—or better in certain domains.
EV3 projects Bittensor subnets will power applications reaching 1 million users by late 2024, 10 million by 2025, and 100 million by 2026.
Looking at the current subnets with momentum, we expect Bittensor subnets to power apps with 1 million end-users by the end of 2024, more than 10 million end-users by the end of 2025, and more than 100 million users by the end of 2026.
Business model
TAO emissions represent over $3 million of daily incentives directed to open-source AI developers.
Bittensor is the only serious contender incentivizing open-source AI at a scale that can compete with centralized providers: at current prices, TAO emissions represent >$3m of daily incentives to open-source AI developers.
Investment context
Bittensor is ranked #32 on CoinGecko with a $3.4 billion market cap and a $10 billion fully diluted valuation.
Bittensor is currently the #32 highest-ranked token on Coingecko with a $3.4B market cap and $10B FDV.
Risks the investor named
Bittensor faces consensus inefficiencies such as validator weight-copying and has experienced multiple chain halts due to bugs or attacks.
There are weaknesses in the consensus mechanism which make the network far less efficient than it could be (e.g., weight-copying by validators). There’s been several chain halts for bugs and/or network attacks in the past year.
What founders can learn
- The traction evidence that carried weight: EV3 Ventures wrote that Bittensor is the leading decentralized AI network by mind share, market cap, and trading volume, connecting an estimated $150 million worth of GPUs.
- The risk the investor named out loud: EV3 Ventures wrote that Bittensor faces consensus inefficiencies such as validator weight-copying and has experienced multiple chain halts due to bugs or attacks.
- How the model was assessed: EV3 Ventures wrote that TAO emissions represent over $3 million of daily incentives directed to open-source AI developers.
Source and provenance
Investment Memo published by EV3 Ventures on ev3.xyz. Read the original
