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

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

This article provides an in-depth analysis of five leading AI Layer 1 projects: Bittensor, Vana, Kite AI, Nillion, and Sahara.

1. 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 down the centralized barriers in traditional AI research and development, allowing more participants to contribute and benefit together.

Bittensor's technical architecture adopts a dual-layer structure design:

• Core Network (Mainnet): Responsible for the coordination, verification, and issuance management of TAO tokens for the entire system, and is the hub for resource allocation of the entire 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 balance the overall stability of the network with the expertise 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 labeling.
• The number of active users has reached 140,000, doubling compared to the previous year.
• The total valuation of the subnet market exceeds 100 million USD, with a daily trading volume maintaining around 45 million USD.
• Institutional participation has significantly increased, with well-known funds incorporating TAO into their decentralized AI fund, adjusting its weight to 29.55%.

Bittensor's recent upgrade of the dTAO (Dynamic TAO) system is an important innovation in its economic model. The core of this upgrade lies in optimizing the distribution mechanism of the token TAO, 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 accurately to those truly competitive subnets.

To address the issues with the original economic model, dTAO has upgraded to introduce a dynamic resource allocation system based on market mechanisms. This system transforms each subnet into an independent economic unit, driving resource allocation through actual user demand. The core innovation is the subnet token (Alpha token) mechanism:

• Operating Principle: Users can obtain Alpha tokens issued by various subnets by staking TAO, which represent users' support for specific subnets.
• 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, with only 1 TAO and 1 alpha token in each pool. As the liquidity of the two types of tokens in the subnet increases, the price of alpha tokens will also change accordingly. The emission of TAO is distributed proportionally based on the price of subnet tokens among all tokens, with subnets that have higher prices receiving more TAO allocation, thereby achieving automatic optimization of resource allocation.

The most active subnets currently include:

• Subnet 4 Targon: Focused on AI inference services for text generation, characterized by fast response speed and low cost.
• Subnetwork 64 Chutes: Provides API interfaces for various LLMs, allowing developers to build and deploy AI applications on the Bittensor network.
• Subnet 8 PTN: 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 52 Dojo: Perform data labeling and encourage users to earn tokens through data labeling

2. Vana: Data Sovereignty and Value Reconstruction Platform

The Vana project focuses on addressing a core issue in today's digital economy: the ownership of personal data and the distribution of its value. Vana's innovation lies in establishing an ecosystem where users truly own and control their own data, while also being able to derive 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, enabling the incentivization, aggregation, and validation of data assets through Data Liquidity Pools (DLPs). Each DLP is a smart contract specifically designed to aggregate certain types of data assets, such as social media data, browsing history, and more.
2. Data Portability Layer: Ensure that user data can be easily transferred between different applications and AI models, enhancing the flexibility of data usage.
3. Universal Connection Group: Track real-time data flow across the entire ecosystem to form a data ecosystem map, ensuring the transparency of the system.
4. Non-custodial data storage: One of Vana's key innovations is its unique approach to data management. Users' raw data will not be put on-chain but will be stored in locations chosen by the users, such as cloud servers or personal devices, ensuring that users have complete control over their own data.
5. Application Ecosystem: Based on data, Vana has built an open application ecosystem where developers can utilize the data accumulated by DLP to create various innovative applications, including AI applications, while data contributors can receive dividend rewards from these applications.

Latest developments

Vana's financing and partnership expansion continue to advance:

• In February 2025, YZi Labs announced a strategic investment in Vana, with Binance founder CZ joining as an advisor.
• In terms of ecological construction, Vana has built data projects covering multiple fields from social media data to financial forecasting data, including: Finquarium (financial forecasting 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, providing a prize pool of up to $50,000 to incentivize developers to build DataDAO and AI applications based on Vana data, further expanding its ecosystem.

3. Kite AI: Technical Breakthrough of AI-Native Public Chain

Kite AI is a native Layer 1 blockchain project focused on the AI domain, built on the Avalanche framework. It aims to address the various challenges traditional blockchains face when handling AI assets, particularly how to achieve clear rights and incentives for AI data, models, and agent contributions. Kite AI proposes four core technological innovations:

1. PoAI Consensus Mechanism: Proof of Attributed Intelligence is a consensus mechanism pioneered by Kite AI, which precisely tracks the value contribution of data, models, and AI agents through an on-chain verifiable contribution record system.

2. Composable AI Subnet: Kite AI adopts a modular architecture that allows developers to build industry-specific AI collaboration ecosystems on demand.

3. AI Native Execution Layer: Kite AI is building an on-chain AI native execution layer specifically for handling AI computational tasks such as inference, embedding, and fine-tuning/training.

4. Decentralized Data Engine: Kite AI ensures that data creators receive fair compensation within the AI workflow. The platform is equipped with compliant modules that adhere to regulations such as GDPR/CCPA, meeting data privacy requirements worldwide and reducing compliance costs for developers.

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 performed impressively after going live:

• Less than 70 hours after the test went online, the number of connected wallets has exceeded 100,000. So far, a total of 1.95 million wallets have joined the incentive test network V1, with more than 1 million wallets interacting with AI agents, and the total number of calls has exceeded 115 million.

• The project background is strong, built by an experienced Silicon Valley team, with co-founders having profound technical leadership experience in the field of artificial intelligence and having worked for several top tech companies.

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

• As a selection committee member in the Avalanche InfraBUILDL(AI) program, Kite AI plays an active role in promoting the development of the Avalanche artificial intelligence ecosystem, with the aim of making Avalanche a leading blockchain for AI applications.

4. Nillion: Pioneering Exploration of Privacy Computing

Nillion is redefining the way sensitive data is handled through its unique "blind computation" technology, opening new avenues for future digital privacy protection.

Nillion is a decentralized public network based on an innovative cryptographic primitive called Nil Message Compute (NMC), which allows 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 handle 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 entire lifecycle of storage, transmission, and processing. Its technical architecture integrates multiple cutting-edge privacy protection technologies:

• Multi-Party Computation ( MPC ): Allows multiple nodes to collaboratively compute a function 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 privacy protection throughout the entire process.
• Zero-Knowledge Proof ( ZKP ): Provides a method for verifying computations without disclosing any underlying data, enhancing the credibility of the system.
• Nada Language: This is a domain-specific language designed specifically for creating secure MPC programs, which simplifies the development process of privacy-preserving applications and reduces the learning curve for developers.

The network architecture of Nillion consists of three main layers: the processing layer ( is responsible for secure computation ), the coordination layer ( NilChain manages communication between nodes ), and the connection layer ( serves as a gateway connecting external systems ). This multi-layer architecture allows Nillion to provide robust computing power while protecting data privacy, meeting the needs of various privacy-sensitive scenarios.

Latest Development Process

According to the latest information, the development of the Nillion network is progressing steadily:

• The Nillion mainnet is scheduled to launch in March 2025 (this month). The total supply of Nillion tokens is 1 billion, which is expected to be distributed at the launch of the mainnet.
• In terms of financing, Nillion completed a $25 million funding round led by Hack VC on October 30, 2024, with investors including several well-known institutions and angel investors from various projects. This round of financing brings Nillion's total funding amount to $45 million, providing ample financial support for the project's long-term development.
• In terms of ecological expansion, Nillion has established integration relationships with multiple mainstream public chains. Through collaboration with NEAR Protocol, Nillion aims to enhance privacy tools, enabling developers to innovate more effectively in the DeFi space.
• In the AI ecosystem, Nillion has established partnerships with several AI-related projects, including Ritual, Crush AI, Skillful AI, and Virtuals Protocol. For example, Virtuals Protocol is currently the largest multimodal AI agent protocol, and by collaborating with Nillion, it utilizes its secure computing infrastructure to support the private training and inference of AI models, achieving a perfect combination of AI and privacy.

5. Sahara AI: A Platform for Building a New Economy of AI Assets

Project Development

The core concept of Sahara AI is to build a "human-AI collaboration network" that allows ordinary users, developers, and businesses to collaborate.