AI Layer 1 Technology Innovation: In-Depth Analysis of Five Major Projects

With the rapid development of artificial intelligence technology, traditional blockchain architectures have struggled to meet the high-performance computing and complex data processing requirements needed for AI applications. This has driven the rise of Layer 1 blockchain platforms specifically optimized for AI, which exhibit diverse characteristics in terms of technical architecture, application scenarios, and business models.

This article provides an in-depth analysis of five leading AI Layer1 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 decentralized 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.

The technical architecture of Bittensor adopts a dual-layer structural design:

• Root Network (Mainnet): Responsible for the coordination, verification, and issuance management of TAO tokens for the entire system, serving as the hub for resource allocation across the network.
• Subnet Ecosystem: Each subnet is 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 simultaneously balance the overall stability of the network with the specialization in various fields, providing a flexible infrastructure for the development of decentralized AI.

Ecological Development Progress

• The number of subnets has expanded from the initial 32 to over 64, covering various AI application scenarios such as text generation, trading signals, and data annotation.
• The active user base has reached 140,000, achieving a doubling growth compared to the previous year.
• The total valuation of the subnet market exceeds $100 million, with a daily trading volume maintained at around $45 million.
• Institutional participation has significantly increased, with well-known funds incorporating TAO into their decentralized AI fund, adjusting its weight to 29.55%.

The data indicates 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 distribution mechanism of the TAO token, shifting from a resource allocation method that relies on the subjective judgment of validators to a more market-oriented distribution mechanism, allowing resources to flow more precisely to those subnetworks that truly have competitive advantages.

To address these issues, the dTAO upgrade has introduced a dynamic resource allocation system based on market mechanisms.

This system transforms each subnet into an independent economic unit, driven by the actual needs of users to allocate resources. Its core innovation is the subnet token (Alpha token) mechanism:

• Operating Principle: Users can obtain Alpha tokens issued by various subnetworks by staking TAO, which represent users' support for specific subnetworks.
• Resource Allocation Logic: The market price of Alpha tokens serves as a signal to measure the demand intensity of the subnet. Initially, the price of alpha tokens is the same, and each pool contains only 1 TAO and 1 alpha token. As the liquidity of the two types of tokens in the subnet increases, the price of alpha tokens will also change accordingly. The distribution of TAO is proportionally allocated based on the price of subnet tokens among all tokens, with higher-priced subnets receiving more TAO allocation, thus 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 currently most active subnets include:

• Subnet Targon No. 4: Focused on text generation AI inference services, characterized by fast response speed and low cost.
• Subnet Chutes No. 64: 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 including foreign exchange and cryptocurrencies.
• Subnet No. 52 Dojo: Perform data labeling, encouraging users to earn tokens through data labeling.

Vana: Data Sovereignty and Value Reconstruction Platform

The Vana project focuses on solving 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 gain 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 realizes the incentives, aggregation, and verification of data assets through the Data Liquidity Pool (DLP). Each DLP is a smart contract specifically designed to aggregate specific 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 to form a data ecology map, ensuring 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-chain but rather stored at locations chosen by the users, such as cloud servers or personal devices, ensuring users have complete control over their own data.
5. Application Ecosystem: Based on data, Vana has built an open application ecosystem where developers can leverage the data accumulated from DLP to create various innovative applications, including AI applications, while data contributors can earn 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 decentralized AI.

Latest Development Trends

Vana's financing and cooperation expansion continues to advance:

• In February 2025, an institution announced a strategic investment in Vana, and a well-known figure joined as an advisor.
• In terms of ecological construction, Vana has built multiple data projects covering various fields from social media data to financial prediction data, including: Finquarium (financial prediction 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 a substantial prize pool 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 growth momentum is worth paying attention to.

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 faced by traditional blockchains when dealing with 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 allocates earnings based on 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 that allows developers to build industry-specific AI collaboration ecosystems as needed. For example, in the healthcare subnet, patient data can be encrypted and selectively authorized to pharmaceutical companies for AI model development, with profits distributed among the data subjects, model developers, and subnet maintainers according to a certain ratio, creating a win-win ecosystem for all parties.

3. AI Native Execution Layer: Kite AI is building an on-chain AI native execution layer specifically designed to handle AI computing tasks such as inference, embedding, and fine-tuning/training. Users can authorize smart contract wallets to execute inference calls and interact with models through this layer. This execution layer not only supports blockchain transactions and state changes but also integrates a confidential computing environment (such as Trusted Execution Environment TEE), ensuring data security and privacy protection during the computing process.

4. Decentralized Data Engine: Kite AI ensures that data creators receive fair compensation in the AI workflow. The platform is equipped with compliance modules that meet regulations such as GDPR/CCPA, addressing 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 decentralized development 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 has performed impressively since going live:

• Less than 70 hours after the test went online, the number of connected wallets surpassed 100,000. As of now, a total of 1.95 million wallets have joined the incentive test network V1, of which over 1 million wallets have interacted with AI agents, with a total call count exceeding 115 million.

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

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

• As a selection committee member for Avalanche in a certain program, Kite AI plays an active role in promoting the development of the Avalanche artificial intelligence ecosystem. This collaboration aims to make 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: Frontier Exploration of Privacy Computing

Nillion is redefining the processing of sensitive data with its unique "blind computation" technology, paving the way 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 process high-value data without exposing sensitive details.

Nillion's core advantage lies in its "blind computation" capability—a process that allows data to remain encrypted throughout its lifecycle of storage, transmission, and processing. Its technical architecture integrates various cutting-edge privacy protection technologies:

• Multi-Party Computation ( MPC ): Enables multiple nodes to collaboratively compute functions without revealing their private inputs, achieving joint computation without data sharing.
• Fully Homomorphic Encryption ( FHE ): Allows direct operations on encrypted data, ensuring that the data remains encrypted from start to finish, providing comprehensive privacy protection.
• Zero-Knowledge Proof ( ZKP ): Provides a method for verifying computations without disclosing any underlying data, enhancing the credibility of the system.