betensor is emerging as the bitcoin of ai and
some key players in the crypto industry have gone as far as to claim that it could in fact be
the next bitcoin on becoming the next bitcoin not surprisingly the recent rally in its towcoin
has put back on the radar what is surprising though is just how much it’s changed since it’s
last been in the headlines and how much potential it could have and that’s why today we’re going to
bring you up to speed on what potential has been up to how high tao could go and what comes next
for this fascinating crypto project my name is nick stay tuned first things first i need to make
it clear that nothing in this video is financial advice it’s educational content intended to inform
you about potential also do note that nobody at the coin bureau team holds tao in their personal
crypto portfolios and you can trust that today’s analysis will be as objective as possible as
always if you want to know what cryptos we do hold ago around the time of our last video subwallet
one of the most popular polka dot wallets announced that it had integrated potenc now for
context potensor was built using substrator the framework used to build polulka dot as a fun fact
potensor originally planned to launch as a polka dot parachain as another fun fact large crypto vcs
like digital currency group or dcg and polychain capital reportedly invested in betensor back when
it first got started in 2019 if you watched our first update you’ll know that we estimated these
investors held around 600,000 tao last april well shortly after our update in october dcg announced
the launch of a new subsidiary called yuma which is focused on batensor now for reference
potential’s technology was supposedly created by a pseudonmous developer or a group of developers
named yuma ralph like satoshi nakamoto for bitcoin however a recent interview with potencil
co-founder jacob steves suggests that yuma is just a name for the group of developers working on
betensor including himself and allah shabana the other co-founder of betensor in any case yuma’s
purpose is basically to help bootstrap betensor’s emerging ecosystem by helping onboard more
developers and investors in an april interview dcg head honcho barry silbert said that he hopes yuma
will play the same role for betensor as gayscale did for bitcoin in its early days earlier in the
interview silbert claimed that gayscale’s bitcoin trust was likely what pushed bitcoin’s price
from $100 to $1,000 in 2013 for those unfamiliar grayscale is another subsidiary of dcg that’s
famous for launching trusts for bitcoin and other cryptos allowing institutional investors to get
exposure in a similar way to spot etfs gayscale launched a potential trust last summer and it only
has around $11 million of assets under management at the time of shooting but recent upgrades could
change this in a big way by the way if you’re was the introduction of evm style smart contracts
and this will make it easier for liquidity to flow into botensor from other blockchains and of course
much of the liquidity in crypto exists on evm chains like ethereum and its layer 2os the second
of these upgrades took place in february this year and that was the introduction of dynamic towel or
dta for short to bring you up to speed potensor effectively consists of subnets which provide
ai use cases like image generation miners which perform the related computation and validators
which allocate a portion of tow emissions to the most useful subnets ensuring they’re sufficiently
funded what the dta upgrade did was create a token for each subnet that only trades against tao
with tao emissions going to the subnets with the tokens that have the highest average value
rather than the subnets selected by validators in theory this aligns incentives within potensor’s
growing ecosystem in practice it creates a dynamic pun intended that’s eerily similar to virtuals
protocol wherein any speculative demand for potential subnet tokens flows through tao as we
saw with the virtuals virtual token during the ai agents hype late last year this dynamic could
result in exponential growth in tao’s price and as it so happens coinbase also listed tao in february
which will make it even easier for more people to ape in from our perspective however the biggest
gains won’t be coming from tao but from potensil’s subnet tokens and this is mainly because they all
have much lower market caps than potencil meaning that their prices will go up more in percentage
terms even with less investment according to tile stats there are over 100 subnets and counting
though a few are inactive and some others seem to be very low quality thankfully there’s a
super easy way to figure out which potential subnets have potential and that’s to look at
who’s been funding them for starters we have yuma which you’ll recall is the subsidiary of dcg
that practically wants to pump ta’s price and it appears to have funded about a dozen potential
subnets and we also have yzi labs formerly known as binance labs which invested in a potential
subnet in march just last month dao 5 one of potensor’s original vc backers also announced
it had raised $222 million to invest in crypto it’s possible that some of this capital will be
invested into subnets besides investment another way to figure out which potential subnets have
potential is to actually look at what they do and see if it fits in with potentials broader ethos
for example there’s a potential subnet that mines bitcoin and fyi co-founder jacob steves claimed in
an interview that he was a bitcoin maximalist on the flip side potensil’s decision to leverage
the evm for smart contracts and its recent integration with layer zero suggests there could
be significant capital flowing in from ethereum’s ecosystem aside from the fact that this means you
should look at whether any subnetss have ties to key players in the ethereum ecosystem it could
also mean that ta will benefit greatly when eth finally starts to rally if you’re too lazy to do
all of the above though then just become a member that’s tao’s price and potential when we last
covered potential we noted that tao could rally as high as $1,000 by the end of 2025 well our
prediction came closeish tao rallied up to around $750 before crashing down the good news is that
tao managed to hold its support level of $200 when it did collapse when you zoom out you can see
the result tao has been trading in a range between $200 and around $750 for over a year and a half
the recent bounce from $200 suggests $750 comes next what happens after that is where things get
interesting if tao manages to break above $750 in the coming weeks then it could rally as high as
$1,300 funnily enough this could potentially be the price that barry silbert has in mind remember
how he mentioned that gayscale played a role in pumping btc from $100 to $1,000 in 2013 well if
you look back bitcoin actually went a bit above $1,000 just like tao could now and this begs the
question of what could cause ta to break out of this range it’s been trading in over the past
18 months by now the answer should be obvious speculation around potential subnet tokens as a
yet another fun fact it seems that every crypto project has its own speculative strategy to pump
up the price of its respective coin or token for salana memecoins are what drove so much demand
for soul in tal’s case it’s clear that its subnet tokens are the speculative strategy and this
begs a bigger question though and that’s what makes potensor’s subnet tokens any different from
say the ai agent tokens launched by virtuals the short answer is that the subnets on betensor are
comparatively legit let me remind you that some of them have been raising money from vcs unlike
almost all of the ai agent chat bots people will notice this and potentially ape in driving tao’s
price higher meanwhile the narrative of betensor being the bitcoin of ai could attract serious
attention if we see another speculative wave around ai well it looks like there will be and
tesla’s upcoming self-driving feature could be the catalyst that triggers it all there’s just
one caveat though and that’s the supply side of this equation if you watched our first update
you’ll know that tao’s emission schedule follows an incredibly aggressive curve wherein 7,200 toa
are issued to miners validators and subnets every single day until the first hovering which was
initially scheduled in november 2025 but could happen as late as january 2026 according to
ta stats regardless by our calculations ta’s supply has grown by almost 1.6 6 million since
late october 2024 7,200 times around 222 days assuming an average price of around $400 per
toa this means that it experienced as much as $640 million of sell pressure over the last
7 months given the relative lack of demand during this time it’s honestly a miracle
that ta’s price didn’t completely collapse we suspect this resilience is due in part to
the fact that most receivers of tao appear to be staking it rather than selling it as you can see
over 70% of tao’s circulating supply is staked and this could have the practical effect of making its
price more volatile in either direction but so far it’s been relatively stable the fact of the matter
is that potential seems to have positioned itself as the blue chip crypto within the ai niche and
this is likely to put it at the top of the pack when the ai speculative wave comes back and that’s
why we stand by our initial cycle top prediction which is that tao could rally as high as $5,000 as
a result and if you’re looking to trade tao then depends on its upcoming milestones but tensa has
no official road map but its upcoming milestones can be found in the weekly live streams the open
tensor foundation posts on its youtube channel and the first milestone is something jacob steves
mentioned back in january during the beta testing for dto and that’s that they want to make it
possible for subnets to become their own chains and this makes sense given that many subnets have
big backers who presumably want to maximize the returns they’ll get on their associated tokens
by making it possible for subnets to spin out and create their own potential style blockchains
it not only benefits their early backers but also validates potensil’s approach to building
decentralized ai which is what the project is all about after all in that same liveream steve’s
noted that the next two milestones after the launch of dta which happened in february will be
improving betensor’s decentralized governance and further decentralizing its blockchain now to put
things into perspective only 10 entities currently vote in betensil’s governance and there are only
70 validators on its blockchain according to ta stats more importantly steve’s revealed that most
subnets will initially be powered by the same set of a dozen validators to begin with as far as
we can tell this is still the case at the time of shooting as such it’s safe to assume that the
decentralization milestone also applies to the subnetss not just the main chain steves has also
noted that the open tensor foundation nonprofit will eventually be wound down in the more
immediate term patensor will be joining an event in paris called proof of talk that takes place on
june 10th so in the next few coming days regarding the event steves said quote “join me to pitch
black rockck on free ai permissionless systems and incentivized model training at the louvre in
paris.” oddly enough we didn’t see anyone from blackrock on the roster of speakers just people
from betensor’s ecosystem another thing we haven’t seen is websites like defi lama tracking potencils
onchain activity and this is likewise odd because you’d think it would be easy to integrate another
evm style chain that said it’s possible that this kind of data could be imminent as we’re starting
to see evm daps launch on potencil for instance tali recently launched unis swap v3 on potential
with a usdc bridge to base and ethereum and this foreshadows imminent inflows into botensil’s
ecosystem from bass ethereum and other blockchains there’s just one problem though and that’s that
opening the liquidity spigots doesn’t mean the liquidity will flow considering how retail
investors have been burned by speculative ai pump and dumps it seems unlikely that they’ll be
itching to get burned again on betensor even if its subnetss are legit not only that but it seems
that the average retail investor sees that there is more to potens than meets the eye and uh not
in a good way it turns out that potensil’s early investors having at least 600,000 toao is just
the tip of the iceberg steve’s revealed that the open tensil foundation holds 700 to 800,000 towel
and this means as much as 20% of toa’s circulating supply is held by insiders and this brings me to
the challenges that we foresee for potential and the first challenge is the lack of transparency
which continues to be an issue you’ll recall that potencil’s technology was supposedly created by
a pseudonmous individual or a group who goes by the name yuma raalo just like bitcoin with satoshi
well unlike bitcoin yuma is still publishing white papers like the dta white paper in february one
could argue that this makes the whole pseudonmous thing kind of pointless especially when steve’s
frequently uses the word we when describing potencil in interviews the narrative that
potential received no vc funding is also arguably a bit deceptive yes there was no premine of tao
but steves has literally admitted in interviews that the team mined tao and sold it to investors
after launching come to think of it this could be the first ever case of a crypto project launching
with a postmine rather than a premine as far as we can tell there’s no real difference between
the two they both result in a substantial amount of the supply going to insiders but perhaps it’s
some kind of a legal loophole and this ties into the second challenge and that’s tokconomics to be
blunt it seems that the actual reason why tao has held up so well despite its rampant inflation
is that a substantial percentage of the supply is held by insiders be it investors the mysterious
open tensor foundation or otherwise notably these insiders seem to be some of the largest miners
and validators and could be mostly staking in the toao that they receive while there is demand
for tao via subnet tokens now the small size of their market caps suggests there isn’t much
speculation and we’re skeptical that there will be and this is simply because this speculative
strategy is too similar to the others that have already been tried on other chains like virtuals
on base moreover these other speculative ai tokens seem to be more accessible than potentials subnets
and this relates to the third challenge and that’s competition from what we’ve seen there are a
lot of quality ai cryptos out there although they don’t feature the same fully decentralized
stack as potensor most of them are much easier to understand and use at least in our experience
as we noted in our previous review potens comes off as unnecessarily complicated especially to
the casual observer to be clear there are some seriously brilliant minds working on betensor and
its subnets but it seems that they forget that the average person is not as brilliant this is a good
strategy if you’re trying to appeal to academics or compete with other cuttingedge ai companies
and projects but it’s not a good strategy if you’re trying to attract users and investors
they’ll just shrug their shoulders and walk away with all that said though potencil’s challenges
aren’t nearly as big as they were when we first covered the project its ecosystem seems to be
booming and the case for tao looks stronger than ever in our view whether it’s enough to attract
attention and capital remains to be seen but with backers like dcg chances are that some of
potential subnets will be massive moonshots and if you want to dig into these subnets yourself and
need help doing your research then check out our video on how to dy right over here and if you’re
not subscribed to the channel yet you can do that right over here this is nick signing off thank you
very much for watching and i’ll see you again soon
