In-Depth Analysis of AI Layer 1 Projects: Building a Decentralized AI Ecosystem

With the rapid development of artificial intelligence technology, traditional blockchain architectures can no longer meet the demands of AI applications for high-performance computing and complex data processing. This has led to the emergence of Layer 1 blockchain platforms optimized specifically for AI, which exhibit diverse characteristics in terms of technology architecture, application scenarios, and business models.

This article provides a depth analysis of five leading AI Layer 1 projects: Bittensor, Vana, Kite AI, Nillion, and Sahara.

Bittensor: Decentralized AI Network Infrastructure

Bittensor, as an early explorer in the blockchain AI field, is committed to building an open Decentralization 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 has created an open peer-to-peer ecosystem where participants can earn corresponding rewards based on their contributions to the network.

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

• Root Network (Mainnet): Responsible for the coordination, validation, and issuance management of TAO tokens for the entire system, serving as the hub for resource allocation across 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 in various fields, providing a flexible infrastructure for the development of Decentralization AI.

Ecological Development Progress

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

To address resource allocation issues, the dTAO upgrade introduces a dynamic resource allocation system based on market mechanisms. This system transforms each subnet into an independent economic unit, driven by users' actual demands for resource allocation. Its core innovation is the subnet token (Alpha Token) mechanism:

• Operating Principle: Users can obtain Alpha tokens issued by various subnets by staking TAO, and these tokens represent the user's support for specific subnets.
• Resource allocation logic: The market price of Alpha tokens becomes a signal for measuring 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 the liquidity of the two types of tokens in the subnet increases, 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 higher-priced subnets receiving more TAO allocation, thereby achieving automatic optimization of resource allocation.

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

The most active subnets currently include:

• Subnet Targon 4: Focused on text generation AI inference services, characterized by fast response speed and low cost.
• Subnet 64 Chutes: Provides API interfaces for various LLMs, allowing developers to build and deploy AI applications on the Bittensor network.
• Subnet PTN No. 8: 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 52 Dojo: Perform data annotation and encourage 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, 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 also being able to derive economic returns from it.

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

1. Data Liquidity Layer: This is the core of the Vana network, which facilitates the incentivization, aggregation, and verification of data assets through the Data Liquidity Pool (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, forming a data ecological map to ensure the transparency of the system.
4. Non-custodial data storage: One of Vana's significant innovations is its unique data management approach. Users' raw data will not be stored on the blockchain but will instead be chosen by the users for storage, such as on 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 utilize the data accumulated from 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 Development Trends

Vana's financing and cooperation expansion continues to advance:

• In February 2025, a certain laboratory announced a strategic investment in Vana, and a well-known founder joined as an advisor.
• In terms of ecological construction, Vana has built data projects covering multiple fields from social media data to financial forecasting data, including: Finquarium (financial forecasting 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 high rewards 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 noting.

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 that traditional blockchains face when handling AI assets, particularly how to achieve clear 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 a consensus mechanism pioneered by Kite AI, which accurately 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 according to contribution ratios, effectively addressing issues such as "data black box" and "model plagiarism" in the traditional AI economy.

2. Composable AI Subnet: Kite AI adopts a modular architecture, allowing developers to build industry-specific AI collaboration 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 for handling AI computation tasks such as inference, embedding, and fine-tuning/training. Users can authorize smart contract wallets to perform inference calls and interact with the 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. Decentralization Data Engine: Kite AI ensures that data creators receive fair compensation in the AI workflow. The platform includes compliance modules that meet regulations such as GDPR/CCPA, fulfilling 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 remarkably after going live:

• Less than 70 hours after the online testing, 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, among which more than 1 million wallets have interacted with AI agents, with a total call count exceeding 115 million times.

• The project has a strong background, built by an experienced Silicon Valley team. The co-founders all have deep technical leadership experience in the field of artificial intelligence and have worked for several top technology companies. Core team members come from industry-leading enterprises and possess academic backgrounds from top universities.

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

• As a selection committee member in the Avalanche InfraBUILDL(AI) program, Kite AI plays an active role in promoting the development of the Avalanche artificial intelligence ecosystem, with the aim of making Avalanche 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.

Nillion: Cutting-edge Exploration of Privacy Computing

Nillion is redefining the way sensitive data is processed through its unique "blind computation" technology, opening up new avenues for future digital privacy protection.

Nillion is a decentralized public network based on an innovative cryptographic primitive called Nil Message Compute (NMC), allowing network nodes to operate in a non-traditional blockchain manner. This project was established in November 2021, aiming to create a system that can securely handle high-value data without exposing sensitive details.

The core advantage of Nillion lies in its "