Bittensor Community Discussed eTAO, Gamma, Null Consensus, and Lending at Novetly Search

On Novelty Search Episode 092, Bittensor contributors held a wide-ranging discussion on the current state and future direction of the protocol.

The conversation centered on improving subnet token liquidity and price discovery, expanding consensus flexibility, and giving subnet owners greater control over their token economies through eTAO and Gamma.

Participants also discussed decentralization, attracting new founders, and the importance of rapid protocol development.

1. Bittensor’s Liquidity Pools May Be Too Stable

Bittensor’s subnet tokens trade through automated liquidity pools that receive continuous funding from network emissions. These pools make trading possible without requiring external market makers.

However, observers noted that some subnet tokens have become unusually stable, limiting price discovery.

Yuma researchers proposed a new pool design called ASMR to introduce greater volatility. The proposal would adjust liquidity parameters based on TAO’s supply and other factors.

2. Permissionless Lending Could Make Liquidity More Dynamic

Permissionless lending was discussed as an alternative approach to improving price discovery. The proposed mechanism would allow users to borrow against TAO or alpha holdings without selling their positions.

This would give subnet owners, miners, and investors access to capital while retaining their assets. Borrowing could also remove liquidity from trading pools, making prices more responsive to market activity.

The system would resemble lending protocols such as Maker and Morpho.

3. Null Consensus Gives Subnets More Flexibility

Null Consensus was another major topic, particularly its implications for decentralization and subnet efficiency. The mechanism allows subnet teams to operate without mandatory Yuma Consensus calculations.

Bittensor Introduces Null Consensus, Allowing Up to 2,500 Miners Per Subnet

This formalizes an approach already used by some subnets that rely on dominant validators and off-chain verification.

Bittensor’s underlying staking, registration, and emissions infrastructure remains intact under Null Consensus.

Teams can still use Yuma Consensus when decentralized validator agreement is necessary. The community emphasized that Null Consensus expands the options available to subnet owners.

4. eTAO Gives Owners Greater Control Over Emissions

eTAO introduces greater flexibility in how subnet emissions are distributed.

Subnet owners can adjust reward allocations among miners, validators, and owners within protocol-defined limits. The design also considers burning, recycling, and directing value toward other subnets.

This would allow subnet teams to develop incentive structures that better reflect their operations. Research-focused subnets and commercial AI businesses could adopt different economic models based on their needs.

eTAO Goes Live as Bittensor Subnets Make Their First Moves on Emissions

5. Gamma Could Connect Subnet Tokens to Real Services

Gamma was discussed as a proposed system for connecting subnet token economies to products and services.

The mechanism would allow subnets to acquire other subnet tokens using emissions. These could then be converted into Gamma credits for services such as compute, storage, inference, and bandwidth.

Gamma also aims to simplify onboarding. Users and AI agents could access participating subnet services using a single Bittensor wallet, without separate registrations or payment methods.

This could create a stronger economic connection between subnet tokens and the services they provide.

6. Attracting More Founders Remains a Priority

The discussion also highlighted the importance of attracting new founders from outside the Bittensor ecosystem. It was acknowledged that frequent protocol changes and technical complexity can discourage some teams.

However, improved liquidity, lending, and flexible tokenomics could make the network more appealing to commercial AI businesses.

These developments are expected to support more product-focused teams, including AI application developers, research organizations, and infrastructure providers.

7. Rapid Protocol Development will Continue

Const (Bittensor’s co-founder) acknowledged concerns about Bittensor’s frequent protocol upgrades. However, he argued that continued experimentation is necessary while the network’s economic infrastructure is still developing.

Future changes could include protocol optimizations, improved governance, and additional security upgrades. The objective is to complete essential infrastructure before Bittensor reaches a stage where it can exist without the OTF’s oversight.

Looking Ahead

Novelty Search E092 highlighted Bittensor’s continued evolution toward more flexible incentives, responsive token markets, and greater commercial utility.

Permissionless lending could improve liquidity dynamics, while Null Consensus gives subnet teams more operational freedom.

Meanwhile, eTAO and Gamma could help businesses develop token economies connected to real products and services. Together, these developments aim to make Bittensor more adaptable and attractive to the next generation of AI builders.