Bittensor: Wrapped TAO, Tokenomics & Best Tools

We’ve been looking at quality projects within the AI market lately, and one innovative project we like is Bittensor.

What do they do? Bittensor is a decentralized network that rewards machine learning models for contributing useful intelligence. Their goal is to disrupt existing AI models by making it super easy to develop and share AI models peer-to-peer. You can check out Part 1 of this series first to get acquainted with the project.

Its native token, TAO, powers the ecosystem by incentivizing AI developers, securing the network, and facilitating governance. We already covered Bittensor’s fundamentals in Part 1 (link above). Now, let’s take a deeper dive into Wrapped TAO (wTAO), TAO’s tokenomics, how to buy and store it, and the tools available to navigate the ecosystem.

What is Wrapped TAO (wTAO)?

Wrapped TAO (wTAO) is an ERC-20 version of TAO that allows users to interact with the Ethereum ecosystem. Since Bittensor operates on its own Substrate-based (DOT) blockchain, TAO isn’t directly compatible with Ethereum-based DeFi platforms. Wrapping TAO creates a token that retains the value of TAO while enabling access to Ethereum-based exchanges, liquidity pools, and decentralized applications (dApps).

wTAO expands $TAO’s accessibility, making it easier to trade, stake, or use in DeFi protocols. How does it work? The process is pretty straightforward. Users can wrap their TAO tokens by locking them in a smart contract, which issues an equivalent amount of wTAO on Ethereum. Plus converting back to $TAO is easy. You can unwrap wTAO at any time to retrieve the original TAO tokens. 

TAO Tokenomics

TAO plays a dual role. It serves as an incentive mechanism and a governance tool for Bittensor’s AI network. Here’s how it’s structured:

• Total Supply: 21 million TAO, making it scarce like Bitcoin.
• Mining Rewards: AI models (miners) earn TAO based on their contribution to the network.
• Staking: Validators stake TAO to participate in ranking and rewarding AI models.
• Governance: TAO holders can vote on network decisions, such as protocol upgrades and reward distribution.

Where to Buy TAO

TAO is available on major exchanges that support Bittensor’s ecosystem. Some options include:

• Binance
• Coinbase
• Bitget
• MEXC
• KuCoin
• Gate.io
• Crypto.com
• Kraken

If you get wTAO on Ethereum, you can convert it to TAO using the official Bittensor bridge.

Best Wallets for Storing TAO

You’ll need a compatible wallet to securely store and manage TAO.

Some good options are

• TrustWallet
• Tensor
• Ledger Nano X
• Nova Wallet

Each of these wallets provides a different level of convenience. So, use a wallet that’s suitable for your needs. The Talisman and SubWallets are both good choices and compatible with most Substrate and Polkadot projects, including TAO.

Conclusion

TAO is quickly becoming the backbone of a decentralized AI economy. $TAO is also becoming one of the most valuable cryptocurrencies, currently ranked #44 by market cap. Understanding TAO’s subnets, tokenomics, etc, is important if you are trading, staking, or contributing AI models. 

We have other articles coming up where we’ll dive deeper into subnets in the Bittensor ecosystem. 

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.

We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.

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