Bittensor achieves milestone first halving: TAO daily issuance drops by 50%, ushering in an era of scarcity

Bittensor successfully executed its first halving event on December 15, 2025. This key protocol upgrade permanently reduced the network’s daily token issuance from 7,200 TAO to 3,600 TAO.

Meanwhile, the reward per block also decreased from 1 TAO to 0.5 TAO. This halving significantly lowered TAO’s annual inflation rate from approximately 26% to around 13%.

01 Event Highlights

On December 15, 2025, the Bittensor network reached a predetermined protocol milestone, automatically triggering its first issuance halving. This event fundamentally changed the token economics of TAO.

According to official information, after the halving, the number of TAO newly entering circulation daily decreased from 7,200 to 3,600, a 50% reduction. Correspondingly, the reward for each new block was adjusted from 1 TAO to 0.5 TAO.

This mechanism is similar to Bitcoin’s halving design, aiming to create scarcity over the long term by programmatically reducing the supply of new tokens. Bittensor’s total supply cap is 21 million TAO, the same as Bitcoin’s total supply.

02 Impact Analysis

The halving has multi-dimensional effects on the Bittensor ecosystem, involving both economic models and network participant behavior.

From a supply perspective, the most direct change is the halving of the rate at which new tokens enter the market. Analysis indicates that this reduces TAO’s annual inflation rate from about 26% to 13%. The sudden tightening of supply is theoretically expected to ease selling pressure from miners and validators, providing a fundamental support for the token’s price.

This halving is expected to accelerate the “survival of the fittest” within the Bittensor subnet ecosystem. As emissions decrease, capital and resources may concentrate into validated high-performance subnets.

For example, subnets like Chutes (serverless AI computing) and Ridges (crowdsourced AI agent development), which have demonstrated product-market fit and can generate actual revenue, are likely to attract more attention and investment.

03 Market Response and Price Dynamics

The halving occurred against a complex market backdrop. According to CoinCodex data, as of December 16, 2025, TAO’s price was approximately $269.79.

Over the past month, TAO’s price declined by 19.57%, showing a clear retracement from its all-time high a year ago. The market generally exhibits “extreme fear,” with the platform’s Fear & Greed Index reading only 16.

Market analysts have differing views on the short-term price trajectory post-halving. Some believe that supply shocks alone are insufficient to drive prices higher, and that actual network utility and demand growth are ultimately necessary.

Meanwhile, signs of institutional involvement provide some positive signals. For example, Grayscale Trust’s interest in Bittensor and initiatives like dTAO liquidity upgrades are seen as factors that could help stabilize TAO’s long-term value.

04 Ecosystem Evolution and Future Challenges

The halving marks a transition for Bittensor from a high-inflation growth phase to a more mature stage focused on efficiency and performance.

Future value accumulation of TAO will increasingly depend on demand-driven factors. Key indicators include TAO price trends, growth in dTAO liquidity pools, and capital flow into specific subnets. Despite the challenges posed by reduced emissions, if network demand remains stable or grows, prices may still find support.

The halving also introduces clear risks. Excessive resource concentration in top-performing subnets could lead to liquidity crises or even the elimination of smaller or experimental subnets. Balancing overall ecosystem efficiency with maintaining decentralization and fostering innovation remains a long-term challenge for Bittensor.

05 Implications and Outlook for Participants

For direct network participants—miners and validators—halving means reduced returns per unit of hash power or staked tokens. This will inevitably intensify competition, incentivizing participants to shift toward more efficient, higher-performing AI models to gain ranking advantages, thereby indirectly improving the overall AI service quality of the network.

For investors and traders, halving introduces a key scarcity narrative. Historically, fixed-supply assets tend to take several months after issuance reductions to fully reflect their impact in price.

Bittensor’s long-term narrative is closely tied to the prospects of decentralized artificial intelligence adoption. As more AI subnets launch and institutional interest grows, the scarcity created by halving may resonate with fundamental demand.

Once the halving event settles, the hype around price predictions will fade, and the real test of the Bittensor ecosystem will begin. Resources will flow toward subnets that create value, and the overall network value will ultimately depend on how well it can serve the world with artificial intelligence.