WHAT IS THE BITTENSOR HALVING?

The Bittensor halving refers to the process of reducing the rate at which new TAO tokens are created within the Bittensor network. This halving event occurs every four years, or more specifically, whenever half of the total TAO supply has been issued. The Bittensor network follows a tokenomic framework similar to that of Bitcoin, with a hard cap of 21 million coins as the maximum supply that will ever be minted and a halving cycle that occurs every four years.

Approximately every 12 seconds, a block is completed, and a reward of 1 TAO is distributed among Miners, Validators, Subnet owners and delegators. This results in the emission of 7,200 TAO daily at the current inflation schedule. The first halving will occur when 10,500,000 TAO tokens are in circulation, with the date being subject to slight variations due to network dynamics.

In February 2025, Bittensor implemented Dynamic TAO (DTAO), a market-driven mechanism that replaced the previous emission allocation model. This significant upgrade introduced subnet-specific tokens (called Alpha tokens) for each subnet, which trade against TAO on Constant Product AMMs (Automated Market Makers).

Under Dynamic TAO, both TAO and subnet-specific Alpha tokens follow the same halving schedule:

• The TAO halving schedule remains unchanged, with emission amounts halving whenever the accumulated TAO supply reaches specific thresholds (approximately every four years).
• Each subnet's Alpha token also follows the same halving schedule, with emission amounts being halved at the same supply thresholds as TAO.
• Alpha token supply may grow faster than TAO supply, but all halving events occur at the same supply thresholds, with every token ultimately approaching the same maximum supply of 21 million.

• Each subnet has its own Alpha token with an initial emission rate of 1 Alpha per block (similar to TAO).
• Alpha emissions are injected into subnet pools and distributed to participants (miners, validators, subnet owners).
• When the halving occurs, both TAO and Alpha emission rates will be reduced by 50%.
• After the first halving, the daily emission of TAO will drop from 7,200 to 3,600 tokens per day, with Alpha token emissions following a similar reduction.

Subnets launched earlier benefit from periods of faster liquidity growth in their subnet pools, while subnets launched later must contend with slower liquidity growth due to the tapering rate of token supply growth from the halving schedule.

TAO differs from BTC in that it uses the total token issuance rather than the block number to determine the exact point the halving occurs.

Two mechanisms can affect the timing of the halving:

1. Recycling: TAO tokens spent on Miners' registration are returned to the pool, effectively delaying the date of the halving event by reducing the tokens in circulation.
2. Dynamic TAO Implementation: The state of the network regarding ledger balances and consensus power changed gradually after the February 2025 deployment of Dynamic TAO, as subnet-specific Alpha tokens entered circulation.

• TAO was fair-launched in 2021, with no pre-mined tokens and no pre-sales to VCs, ensuring a transparent distribution process.
• The total supply of TAO remains fixed at 21 million tokens.
• Under Dynamic TAO, TAO serves as both a utility token and a means to acquire subnet-specific Alpha tokens through staking.
• Alpha tokens are used for incentivizing miners, validators, and subnet owners within their respective subnets.
• Both TAO and Alpha tokens participate in the network's consensus mechanism, with their relative weights determined by the "TAO weight" parameter.

Learn more about the Tokenomics at https://opentensor.medium.com/ and about Bittensor at https://bittensor.com/whitepaper

Post-halving, we can expect:

• Reduced inflation of both TAO and Alpha tokens
• Potentially increased scarcity and value of TAO
• Evolution of the Dynamic TAO ecosystem as the balance between TAO and Alpha tokens continues to develop
• Greater emphasis on market-driven valuation of subnets through their respective Alpha token prices