For a long time, a primary criticism of decentralized AI projects has been the “extraction problem.” Innovative tech is built on-chain, but the financial value often flows off-chain to private companies, leaving token holders with little more than governance rights.

Red Team (Subnet 61), a cybersecurity-focused subnet on Bittensor, just took a major step toward solving this.

In a recent update highlighted by @fitzhere9, the team announced they have officially begun initiating token buybacks using revenue generated from their commercial SaaS partner, Innerworks. This move effectively closes the loop between decentralized R&D and real-world commercial success, transforming the subnet from a cost center into a value driver for the $TAO ecosystem.

The Update: Turning SaaS Revenue into Token Pressure

The announcement addresses a lingering concern within the community: that the high-value intellectual property generated by SN61 miners was flowing exclusively to Innerworks, a London-based AI security company, without returning value to the Bittensor network.

The new initiative changes that dynamic entirely.

• The Mechanism: Innerworks generates revenue by selling the security solutions developed on SN61 to enterprise clients (such as DeFi aggregator 1inch).
• The Buyback: A portion of that fiat/stablecoin revenue is now being used to buy back $TAO and Alpha (SN61) tokens from the open market.
• The Impact: These buybacks create constant, non-speculative buying pressure. The purchased tokens are then used to support the subnet’s economics, likely by rewarding high-performing miners or deepening liquidity.

On-chain transactions are already visible via Taostats, with the team promising weekly updates to ensure transparency regarding the buyback rates and volume.

Context: The “Real-World” Loop

To understand why this matters, you have to look at what RedTeam actually does. It operates as a “decentralized cybersecurity R&D engine” where miners compete in “ethical hacking” challenges. 

Instead of training AI to generate text or images, miners here write code to bypass bot detection, evade VPN blocks, simulate synthetic identities, and stress-test security systems. The best solutions earn TAO rewards and feed directly into Innerworks’ AI security products.

Innerworks, the company behind the subnet, packages these miner-generated innovations into an enterprise-grade security product that protects billions in assets. By committing to buybacks, they are essentially paying a “licensing fee” back to the decentralized network that powers their product.

The Buyback and What It Signals

The current buyback rate sits at roughly 1 TAO per day, which the team describes as a placeholder while they establish a transparent pricing mechanism. Weekly updates are expected.

What matters more than the rate is what it represents. As Fiτz noted in his analysis, this shift makes Red Team one of the most “commercially viable” subnets on Bittensor.

It targets the high-margin, high-stakes cybersecurity market, a sector where companies are willing to pay a premium for the kind of speed and adaptability that only a decentralized network can offer.

This creates a plausible R&D-to-Revenue Pipeline:

1. Miners innovate to solve security challenges.
2. Innerworks sells these solutions to real-world companies.
3. Revenue flows back into the ecosystem via buybacks.

This allows each part of the chain to reinforce the next.

4. Token Price receives support, increasing the incentive for miners to innovate further.

The Bottom Line: Proof of Sustainability

Red Team’s move sets a critical precedent for the Bittensor ecosystem. It demonstrates that subnets can be more than just speculative games; they can be functioning economic engines that capture external revenue and return it to the protocol.By aligning the incentives of their private SaaS business with the public decentralized network, RedTeam is proving that “Proof of Humanness” and “Proof of Value” can go hand in hand.