The Web3 + AI Daily: On Bittensor’s Gamma Tokens

Bittensor to introduce transferable usage credits to facilitate trade of AI services.

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Hello, everyone, and welcome to all newly joined subscribers!

This is the 101st edition of The Web3 + AI Daily - your definitive guide to the intersection of blockchain and AI! Today, we’re examining the proposed Bittensor Gamma tokens - transferable usage credits designed to facilitate the exchange of AI services and infrastructure resources. Will they reshape Bittensor’s economy and its broader machine intelligence ecosystem?

Thank you for being here! Let’s dive in.

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Bittensor’s New Chapter

At the end of September, the Bittensor / Opentensor Foundation community held its flagship event, the Exploit Summit, and gathered subnet operators, miners, stakeholders, and fans in Montreal. In his opening talk, Jacob Robert Steeves (Const) outlined the current state of the network and the strategy for where it should go next.

Sidebar for anyone unfamiliar with Bittensor: Bittensor is one of the most important projects in decentralized AI. At its core, it’s a network of separate, highly specialized ‘subnets’ that use monetary incentives to coordinate people and machines around the world to perform AI-related tasks - from data collection and storage to inference, fine-tuning, pre-training, and post-training.

Bittensor is essentially a language for writing numerous decentralized commodity markets, or ‘subnets’, situated under a unified token system. These distinct markets function through Bittensor’s blockchain, allowing each to interact and join into a singular computing infrastructure.

Bittensor’s goal and function of this technological foundation has several implications. For developers, a language to write markets for bespoke commodities such as compute, allowing them to take advantage of the enormous size, cost-efficiency and natural functionality of decentralized market systems. For front-end customers, Bittensor offers access to resources at a cheaper price and without intermediary; unclosable, not falsely self-proclaimed as “open”. For the Bittensor network as a whole, to create Machine Intelligence, in an open and equitable manner on top of ordered and dependent sub-markets. And finally - for the world, to ensure that the supremely important commodity of intelligence is owned by everyone.

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The Road Ahead

Bittensor’s strategy over the past few years has centered on incentivizing the creation of new subnets and the execution of new tasks, rather than prioritizing profitability. As a result, only 23 out of 128 subnets currently have paying customers and generate revenue. Check out SubConnect’s Bittensor Revenue Index below:

SubConnect@WeAreSubConnect

When we released the Bittensor Revenue Index one month ago: $32–35M annualized $TAO subnet revenue. Today: $50M+. More than 40% MoM growth. A large part of that acceleration is being driven by Lium, Targon and Engy, all three showing significant revenue growth. But the…

SubConnect @WeAreSubConnect

Today, we're releasing the first SubConnect Bittensor Revenue Index. Over the past months, we've been researching one of the most important, yet surprisingly difficult questions to answer within Bittensor: Which $TAO subnets are actually generating revenue? How much and are

12:44 PM · Oct 2, 2026 · 51.1K Views

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24 Replies · 71 Reposts · 250 Likes

Therefore, as Const put it, the network’s priority now should be to become profitable and make its subnets self-sufficient. He presented a few key steps to achieve that:

1. Incentivizing subnets that attract real buyers of their product. Going forward, the network will measure each subnet’s ability to attract external customers and use that performance to determine which subnets deserve a larger share of emissions. Const suggested that subnets should target individuals that buy Alpha tokens (see below) and purchase usage credits from other chains.

2. Subnets becoming each other’s clients. Many subnets already utilize other digital commodities within the network, but from now on, a standardized framework will facilitate it.

3. Introducing Gamma tokens: a canonical standard for usage credits. Gamma tokens are designed to expand demand for infrastructure services produced by the Bittensor ecosystem. As Const explained, they will make it easier for external clients to access Bittensor’s machine intelligence products:

We’re building this full bridging technology so all of the usage credits on Bittensor across our variety of infrastructure providers is something the people can use outside of the system.

Meanwhile, Gamma tokens will also boost internal trade. Subnets will be able to direct part of their miner emissions to purchase gamma tokens to use infrastructure by fellow subnets.

The Foundation said the goal is to help Bittensor subnets power one another’s products and grow an open AI ecosystem that can compete with large centralized labs.

How the Gamma Tokens Will Fit in Bittensor’s Tokenomics?

In fact, Gamma tokens are not live yet. They are reportedly set to launch in early 2027, initially across a small group of subnets:

Steeves named seven subnets as the initial Gamma issuers: Chutes AI, Engy, GM, Lium, Targon, Hippius, and Affine. These are the infrastructure layer, the subnets that actually sell compute, inference, and storage to everyone else. Every other subnet on the network becomes, in effect, a customer. According to CryptoBriefing’s account of the roadmap, the standard is slated to go live in early 2027, which means the September announcement was a design reveal, not a launch.

Yet their introduction could have a significant impact on Bittensor’s tokenomics, making it worth examining the implications now. With Gamma, Bittensor’s token economy will evolve into a three-layer system:

1. TAO is Bittensor’s mainnet utility token created to incentivize the production of machine intelligence. Its supply design mirrors the one of bitcoin:

• With the mining of each new block, new TAO coins are issued as reward to miners and validators.

• The number of new TAO created each year is automatically halved over time until issuance halts completely with a total of 21 million TAO in existence. The first halving took place in 2025.

TAO is the common asset underneath the whole system, connecting all Bittensor subnets together.

Bittensor continually creates new TAO and distributes it across the network. Subnets compete for a share of this new supply. The exact calculation is technically complicated, but the beginner version is fairly understandable: subnets with stronger market support can receive a larger share of the available TAO.

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2. Each subnet has its own Alpha token, which represents ownership or participation within the subnet. Alpha tokens’ issuance rate follows the model outlined below:

Each subnet can produce up to 2 Alpha tokens per block, distributed as follows:

• 1 Alpha token: 18% to subnet creators, 41% to miners, and 41% to validators (rewards are accumulated in a compound interest manner).

• The other portion is injected into the Alpha-TAO liquidity pool, with the amount calculated as the TAO allocated to the subnet divided by the Alpha token price, capped at a maximum of 1 Alpha token.

The higher the value of a subnet’s Alpha token, the better the subnet’s performance is reflected, potentially earning more TAO rewards and forming a positive feedback loop.

TAO holders can stake their coins with a specific subnet to receive a proportional amount of the subnet’s Alpha tokens.

The key to Bittensor’s economic model lies in whether the distribution of TAO and Alpha tokens can create a positive feedback loop.

If Chutes becomes enormously successful, Chutes alpha may benefit more directly than TAO. Someone buying alpha receives concentrated exposure to that subnet, while someone holding TAO owns the shared asset underneath the entire ecosystem.

But alpha can also strengthen the role of TAO. Without alpha, it would be difficult for capital to express which subnets it believes deserve support. Every subnet would effectively share the same economic value regardless of quality. Alpha creates separate markets, while TAO connects them.

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3. Gamma tokens will be transferable usage credits. Subnets will burn a portion of their own Alpha tokens to mint Gamma.

As KuCoin Exchange put it, $5 of burned Alpha becomes 5 Gamma that doesn’t fluctuate once minted. Spend it on inference, storage, or compute from another subnet, and that subnet redeems it. No TAO changes hands in the transaction itself.

That’s a real structural shift for a network that, until now, ran almost entirely on emissions. Miners and validators get paid in Alpha, which they typically sell into TAO. Subnets that needed outside services had two bad options: keep dumping their own Alpha on the open market, or go raise venture money. Gamma gives them a third path. A subnet running low on GPU capacity can now pay a compute subnet directly in credits instead of liquidating its token treasury to do it.

Key Benefits of Gamma Tokens

It is still early to predict how Gamma tokens will impact Bittensor's economics, but most experts, including Mike Grantis, whom I cite below, see Gamma tokens as a net positive. Some of the potential benefits are:

• Simplified trade of machine intelligence services: To access infrastructure resources, subnets currently have to sell either TAO or Alpha tokens, and manage chain bridging, different gas fees, key, and price volatility. Gamma tokens will abstract those frictions away.

Gamma creates a universal standard, denominated in USD, where the commodity price is not impacted by the volatility of the payment currency.

Gamma collapses this into one atomic onchain transaction that can come from any chain. [...] Once minted, the amount never changes, so a credit bought today buys the same dollar amount of work tomorrow.

mikecontango | τ,τ@mikecontango

A minor upgrade with major benefits. My thoughts on Gamma. $TAO https://t.co/HQNOVcPudv

6:01 PM · Sep 30, 2026 · 18.2K Views

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7 Replies · 15 Reposts · 97 Likes

• The burn mechanism applied to Alpha tokens may potentially push their price up: Since subnets will have to burn Alpha tokens to mint Gamma, this will result in a decreased supply of Alpha, which may increase their value.

• Subnets will transform from separate silos into an interconnected market for AI services:

If outside compute and inference providers accept gamma, the mechanism could connect Bittensor’s internal subnet economy to the broader AI infrastructure market. That would move the network closer to a marketplace model where subnets can source capabilities wherever they are available, while still using a Bittensor-native credit as the payment layer.

Many AI products depend on resources that are not always produced inside a single network, including large-scale GPU capacity, model-serving infrastructure, data access, monitoring, and evaluation. A credit accepted by both Bittensor subnets and external providers would give operators more flexibility than a closed internal token loop.

Gamma would also change how emissions work. If implemented, gamma would turn Bittensor’s subnet economy from a collection of isolated incentive pools into an internal market for AI services, where emissions can be converted into credits that pay for the infrastructure needed to build products.

• Gamma token will facilitate agentic commerce:

Agents don’t sign up for accounts or fill out email forms, and they shouldn’t have to read alpha price charts before paying for inference. Gamma gives them a stable, programmatic unit of account. An agent holding 100 Gamma knows it has $100 of service and can spend it in one transaction, without API keys.

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