Crypto
TAO Faces Major Shift With Bittensor Root Reborn
Bittensor's Root Reborn proposal could redefine TAO's tokenomics as validators gain greater control over capital allocation and rewards.
15d ago 4,280
BLOCKINSIDERLoadingBittensor's Root Reborn proposal could redefine TAO's tokenomics as validators gain greater control over capital allocation and rewards.
Bittensor's economic engine is facing its biggest overhaul since Dynamic TAO went live. The Root Reborn proposal was unveiled on June 16, 2026.
It targets the automated selling mechanism that has quietly pressured subnet prices for years. Validators, not passive code, would soon decide where capital flows. Here's why this governance shift matters for TAO holders everywhere.
Bittensor's current design automatically liquidates subnet "alpha" rewards into TAO every block. This programmatic conversion creates constant, mechanical sell pressure across the entire network.
The mechanism functions like a built-in network tax on the whole ecosystem. Regardless of market conditions or sentiment, the protocol forces continuous selling just to pay root stakers.
Root Reborn eliminates that automation entirely. Analysts estimate removing this mechanism could cut annual structural sell pressure by roughly 33%, since emissions no longer dump automatically into open markets.
Crucially, this isn't a lockup scheme disguised as reform. Validators become active allocators, reinvesting yield into curated subnet baskets instead of selling everything outright.
Stakers still retain full control over their capital. They can redeem their position back into TAO on demand at any time, preserving liquidity while removing forced structural selling entirely.
Centralized cloud providers like AWS and CoreWeave price compute through flat, predictable margins regardless of underlying efficiency. Bittensor's new model works fundamentally differently, using capital flows as live pricing signals instead.
Validator allocations now function as dynamic price discovery for decentralized compute markets. If a subnet delivers cheaper, more efficient open-source LLM inference, validators notice quickly.
Capital compounds toward that subnet automatically and continuously over time. Validators effectively subsidize and scale whichever infrastructure proves most efficient, creating genuine market-driven optimization at the protocol level.
This introduces what could be called a "meta optimization" layer sitting atop the network. Validators aren't just securing consensus anymore; they're actively curating AI infrastructure investments across dozens of subnets.
That reframes TAO's entire narrative for investors. It stops being a bet on one speculative AI vertical or a single subnet's success alone.
Instead, TAO increasingly resembles an index fund for decentralized AI. Holders gain exposure to the collective portfolio decisions of sophisticated crypto-native fund managers navigating dozens of competing subnets.
Critics remain cautious about this shift though. Validator group Yuma has warned the proposal concentrates power, comparing it to LIBOR-style conflicts of interest among a small group.
The code currently sits on a test network, not mainnet, with further review and cleanup still planned before deployment. An early automated audit already flagged two issues, both since addressed by the developer.
Still, if implemented carefully, Root Reborn could transform Bittensor from a fragmented subnet marketplace into something closer to actively managed decentralized AI capital allocation, reshaping how investors ultimately value TAO going forward.
TAO price has remained under pressure over the past few days, with limited signs of sustained recovery. The altcoin has traded within a bearish flag pattern for nearly five months. However, improving market conditions could support a breakout, offering TAO an opportunity to reverse its prolonged downward trend.
TAO traded near $201.62 at the time of writing, holding just above the critical $199 support level. This area aligns with the 61.8% Fibonacci retracement level, making it a key technical zone.
Maintaining support here would strengthen the recovery outlook and encourage renewed buying interest among traders.
Failure to defend the $199 support could reinforce bearish momentum and extend TAO's ongoing correction. A breakdown below this level may drive the altcoin toward $173 initially, with further downside to $150 possible if selling pressure intensifies. Such a move would invalidate the current bullish recovery scenario.
No comments yet
Be the first to share your take when accounts launch.
