In-Depth Analysis of AI Layer 1 Projects: Reshaping the Fusion of Blockchain and Artificial Intelligence

With the rapid development of AI technology, traditional Blockchain architectures struggle to meet the high-performance computing and complex data processing demands of AI applications. This has led to the emergence of Layer 1 Blockchain platforms specifically optimized for AI, showcasing diversified characteristics in terms of technical 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 AI.

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 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 receive corresponding rewards based on their contributions to the network.

Bittensor adopts a dual-layer structural design:

• Root Network (Mainnet): Responsible for the coordination, verification, and management of TAO token issuance for the entire system, serving as the central hub for network resource allocation.
• Subnet Ecosystem: Each subnet develops specialized solutions for specific AI application scenarios, proving their value in market competition.

This design allows Bittensor to balance overall network stability with expertise in various fields, providing a flexible infrastructure for decentralized AI development.

Ecological Development Progress

• The number of subnets has expanded from an initial 32 to over 64, covering various AI application scenarios such as text generation, trading signals, and data annotation.
• The number of active users 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 maintained at 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%.

These data indicate 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 the economic model. The core of the upgrade lies in optimizing the token TAO distribution mechanism, shifting from a resource allocation method that relies on the subjective judgment of validators to a more market-oriented distribution mechanism, enabling resources to flow more accurately to truly competitive subnetworks.

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

• Operation Principle: Users can obtain Alpha tokens issued by each subnet by staking TAO, which represent the user's support for specific subnets.
• Resource allocation logic: The market price of Alpha tokens becomes a signal to measure the demand intensity of the subnet. TAO emissions are distributed proportionally based on the subnet token prices among all tokens, with higher-priced subnets receiving more TAO allocation, achieving automatic optimization of resource configuration.

This mechanism significantly improves the efficiency and fairness of resource allocation, making the value of TAO tokens more stable, and providing more avenues for ordinary users to participate in network governance.

The most active subnets currently include:

• Subnet 4 Targon: An AI inference service focused on text generation, characterized by fast response speed and low cost.
• Subnet 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 such as foreign exchange and cryptocurrencies.
• Subnet 52 Dojo: Data annotation, encouraging users to earn tokens through data annotation.

Vana: Data Sovereignty and Value Restructuring Platform

The Vana project focuses on addressing the core issues of personal data ownership and value distribution in today's digital economy. In the current internet ecosystem, user 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: Achieves the incentive, aggregation, and verification of data assets through Data Liquidity Pools (DLP). Each DLP is a smart contract that aggregates specific types of data assets.
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. General Connection Group: Track the flow of real-time data within the entire ecosystem, forming a data ecosystem map to ensure system transparency.
4. Non-custodial data storage: Users' original data is not stored on the chain, and users choose the storage location themselves to ensure complete control over their data.
5. Application Ecosystem: Developers can utilize the data accumulated by DLP to build various innovative applications, including AI applications, while data contributors can receive 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, a certain organization announced a strategic investment in Vana, and a well-known individual joined as an advisor.
• In terms of ecological construction, Vana has built multiple data projects covering various fields from social media data to financial forecasting data.
• Recently, Vana organized a hackathon during a certain event, offering a high reward 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 development momentum is worth paying attention to.

Kite AI: Technical Breakthrough of AI-Native Blockchain

Kite AI is a native Layer 1 Blockchain project focused on the AI field, built on the Avalanche framework. It aims to address the challenges faced by traditional blockchains when processing 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: The pioneering consensus mechanism that accurately tracks the value contributions of data, models, and AI agents through an on-chain verifiable contribution record system.

2. Composable AI Subnet: Adopts a modular architecture, supporting developers to build industry-specific AI collaborative ecosystems on demand.

3. AI Native Execution Layer: Build an on-chain AI native execution layer specifically for handling AI computation tasks. Users can authorize smart contract wallets to execute inference calls and interact with models through this layer.

4. Decentralized Data Engine: Ensures that data creators receive fair compensation within the AI workflow. The platform includes compliance modules that adhere to regulations such as GDPR/CCPA, meeting data privacy requirements across the globe.

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 performed exceptionally well after going live:

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

• The project has a strong background, built by an experienced Silicon Valley team, with core members coming from several top tech companies and prestigious universities.

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

• As a member of the selection committee for a certain project, Kite AI plays an active role in promoting the development of the relevant artificial intelligence ecosystem.

As the global data economy is expected to exceed 70 billion USD 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: Cutting-edge Exploration in Privacy Computing

Nillion is redefining the way sensitive data is processed through 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 and aims 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 lifecycle of storage, transmission, and processing. Its technical architecture integrates various cutting-edge privacy protection technologies:

• Multi-Party Computation ( MPC ): Allows multiple nodes to collaboratively compute a function without revealing their private inputs.
• Fully Homomorphic Encryption ( FHE ): Allows direct operations on encrypted data, ensuring that the data remains encrypted from start to finish.
• Zero-Knowledge Proof ( ZKP ): Provides a method for verifying computations without disclosing any underlying data.
• Nada Language: A domain-specific language designed for creating secure MPC programs, simplifying the development process of privacy-preserving applications.

Nillion's network architecture consists of three main layers: the processing layer ( responsible for secure computing ), the coordination layer ( NilChain, which manages communication between nodes ), and the connectivity layer ( that acts as a gateway to connect 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 time of the mainnet launch.
• In terms of financing, Nillion completed a $25 million financing on October 30, 2024, bringing the total financing amount to $45 million.
• In terms of ecological expansion, Nillion has established integration relationships with multiple mainstream blockchains.
• In terms of the AI ecosystem, Nillion has established collaborations with several AI-related projects, including Ritual, Crush AI, Skillful AI, and Virtuals Protocol.

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 enables ordinary users, developers, and enterprises to participate in the creation, deployment, and monetization of AI assets. Through this collaborative model, Sahara AI hopes to lower the entry barrier to AI, allowing every participant to share in the industry's growth dividends. The project has successfully raised a total of $43 million in funding.

The platform's technical architecture consists of three key components:

1. Sahara Blockchain: Provides a secure and transparent trading environment and efficient AI lifecycle management foundation for the ecosystem.
2. AI Infrastructure: Distributed collaborative training and service capabilities supporting advanced algorithms and computing frameworks.
3. Sahara AI Marketplace: Decentralized trading center for AI assets

These components together form a complete ecosystem, supporting the entire process from data collection and labeling to model training, deployment, and monetization.

Latest Development Progress

The Sahara AI project is in a rapid development stage, and its testnet has gone through several important phases:

• In December 2024, the first phase of the data service platform Beta will be launched.