Bittensor as the Internet Capital Market
Raising capital no longer requires pitching VCs or taking on debt. Hyperliquid climbed into the top 15 crypto tokens by market cap without raising through traditional channels, but financing itself entirely through its token.
That success has drawn attention to the Internet Capital Markets (ICM) thesis. It states that founders can bypass traditional private capital routes and instead use a crypto token as the capital formation tool. While new in name, the ICM thesis is really a return to one of crypto’s core principles: tokens as a new mechanism for capital formation, opening participation to anyone with an internet connection.
The “VC token” era strayed away from this principle, leaving other investors with feelings of disillusionment. Now, the ICM thesis is a new wrapper around an old idea, and it marks a reflexive swing back towards crypto’s early roots.
A Protocol as the VC
Bittensor has always recognized the inherent value of the ICM method of capital formation. The network is built around token-driven capital formation, and it continues to show what this approach makes possible. Today it supports 128 projects (subnets), with over 90% launched and grown entirely through their tokens.
This is possible because Bittensor embeds capital allocation into the protocol itself. Every day, newly minted TAO is split among subnets in proportion to the market value of their native tokens. Speculative and structural demand for a subnet’s token directly determines its share of emissions. This creates a dynamic where the protocol acts as the ecosystem’s venture capitalist.
Bittensor’s ICM Framework
Within the network, every subnet token is fair-launched, meaning teams can’t pre-mine an allocation for themselves. In most of crypto, founding teams get a large chunk of supply up front, get rich quickly, and lose motivation. In Bittensor, teams must earn their share gradually over time, keeping them aligned with long-term success.
To fund operations, teams can sell their emissions on the open market or OTC. Where upfront costs are high, they can also strike agreements with institutional investors to sell a portion of their future emissions stream for immediate capital.
Every subnet comes with:
A token capped at 21 million supply
A Bitcoin-like emission schedule, halving every two years instead of four
A default emissions split: 41% to miners, 41% to validators, and 18% to the subnet owner
This standardization lets founders focus on product and incentive design instead of token plumbing. They don’t need to write smart contracts, manage blockchain infrastructure, or handle token mechanics like exchange listings or market making. For investors, it removes the complexity of parsing bespoke emission schedules and float-to-FDV dynamics. At the same time, subnet owners still have the flexibility to design value-capture mechanisms and utility around their token.
Because all subnet tokens are priced in TAO, Bittensor’s design builds in a network effect. When one subnet gains traction, demand for TAO rises, lifting the value of every other subnet. For founders bootstrapping through emissions, other teams’ wins can directly extend their own runway. This turns the ecosystem into a collaborative funding engine rather than a zero-sum game, making it an ideal ecosystem for anyone wanting to launch into ICMs.
Proof of What’s Possible
Bittensor, in a way, offers the American dream. And yes, we know that sounds cliché. But the point stands: the ecosystem gives anyone a fair shot, regardless of wealth, venture backing, or connections.
Take Ridges as an example. Shakeel and a team of three Waterloo undergrad interns started building just three months ago and have already climbed into the top 10 subnets, earning 3.9% of emissions. That’s 281 TAO a day—about $100K—with the subnet owner receiving $18K daily, or $6.5M annualized if emissions and price hold steady. Aside from a single OTC token sale, that’s the only outside funding they’ve taken.
The team simply showed up every day, worked tirelessly, communicated their progress, and delivered. That’s the opportunity Bittensor creates: an open, merit-based funding mechanism. And it’s waiting for other founders to show up and earn their share.
This content is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Unsupervised Capital holds a position in TAO and may hold positions in the subnet tokens or other digital assets discussed herein and may buy, sell, or change positions at any time. Past performance is not indicative of future results. Digital assets involve substantial risk, including potential total loss of capital. Consult your own advisers regarding any investment decisions.
