This Bittensor brief, sponsored by the decentralized creator network Bitcast, dives into two subnets with established real-world counterparts, revealing a staggering valuation disconnect and a compelling investment thesis.
The AI Companion Gold Rush: Dippy (SN11)
- “Dippy makes AI companion apps, has 8 million users on iOS, so a pretty big installed base, and they've been around for a while.”
- “Their subnet is worth $15 million… Google bought a similar company, also a companion app, for about $2 billion recently.”
- Dippy is the team behind a popular AI companion app with 8 million users, similar to the "Annie" and "Valentine" characters on X's Grok.
- Despite its significant user base, the project is generating real revenue (~$50k/month, compounding 20-25% monthly) and actively using it to buy back its subnet 11 tokens.
- Its $15M market cap presents a wild contrast to the multi-billion dollar valuations seen for comparable companies in the traditional tech market.
Annotating the Future: ReadyAI (SN33)
- “ReadyAI is the Bittensor version of Scale.ai… they don't use humans. They use AI to annotate the raw data for ingestion by AIs. And it turns out that at this point, the AI is actually better than the humans at doing that.”
- ReadyAI is tackling the massive data annotation market, positioning itself as a direct, decentralized competitor to the $28B behemoth Scale.ai.
- Its core innovation is using AI models—rather than human labor—to label raw data, a method that is now proving to be more efficient and accurate.
- The project is backed by serious talent, including Itay Elbaz, the co-founder of Google's AdSense, lending it immense credibility.
The Great Valuation Disconnect
- “I think once people figure out that they can buy subnet tokens... there's going to be a lot more liquidity flowing into subnets that are extremely promising and incredibly underpriced like Dippy.”
- The central thesis is that functional Bittensor subnets are trading at seed-stage valuations despite having proven products, significant user traction, and world-class teams.
- Both Dippy (SN11) and ReadyAI (SN33) are valued at just $15M, a fraction of their centralized competitors, suggesting a major market inefficiency.
- The host anticipates that as subnet tokens become more accessible on chains like Base, Ethereum, and Solana, this valuation gap will narrow significantly.
Key Takeaways:
- Bittensor is quietly incubating highly specialized AI companies that are already competing with—and in some cases, out-innovating—their centralized, multi-billion dollar counterparts. The market has yet to price in this reality, creating a landscape of asymmetric opportunities.
- Valuation Gaps Signal Market Inefficiency. Functional AI applications on Bittensor, like Dippy (SN11) and ReadyAI (SN33), are trading at valuations that are 100x to 1000x lower than their centralized equivalents.
- Product-Market Fit Is Already Here. These aren't just ideas on a whitepaper. Dippy has 8 million users and a token buyback program fueled by revenue, while ReadyAI’s AI-driven annotation is outperforming legacy human-based systems.
- Liquidity is the Coming Catalyst. The expansion of subnet tokens to major L1/L2s like Ethereum and Solana is the key event to watch. This will unlock mainstream liquidity and could be the trigger that forces a market re-pricing of these assets.
For further insights and detailed discussions, watch the full podcast: Link
This episode reveals a massive valuation gap between emerging Bittensor subnets and their multi-billion dollar centralized counterparts, presenting a potential arbitrage opportunity for savvy Crypto AI investors.
Introduction to Bitcast and Decentralized Content Mining
- How it Works: Bitcast issues content briefs (outlines) to creators. The host, by producing this video, is effectively mining on the Bitcast subnet.
- AI Verification: An AI from the Bitcast network analyzes the submitted content (like this video) to verify it meets the brief's requirements.
- Incentive Mechanism: Creators who qualify compete for TAO rewards based on the viewership their content receives. This system directly incentivizes the production of high-quality, relevant content as dictated by the network.
Dippy (Subnet 11): The AI Companion Market on Bittensor
- Dippy's Profile: Dippy has an established user base with 8 million users on iOS. The host notes the growing cultural relevance of AI companions, citing Grok's characters "Annie" and "Valentine" on X as examples that are popularizing the concept.
- Financials and Valuation: Despite its large user base and growing revenue ($50k/month, compounding 20-25% monthly), Dippy's subnet is valued at only $15 million. The host contrasts this with Google's recent acquisition of a similar AI companion company for approximately $2 billion.
- Strategic Insight: Dippy is using its revenue to buy back its own subnet tokens, creating direct value for token holders. The host presents a clear investment thesis based on this stark valuation difference.
"I think the future is bright for Dippy and I think you know once people figure out that they can buy subnet tokens... there's going to be a lot more liquidity flowing into subnets that are extremely promising and incredibly underpriced like Dippy."
ReadyAI (Subnet 33): AI-Powered Data Annotation
- Data Annotation Explained: This is the process of labeling or adding context to raw data (from sources like X, Facebook, or YouTube) to make it more useful for training AI models.
- ReadyAI's Competitive Edge: While Scale.ai uses large teams of humans for annotation, ReadyAI uses other AI models to perform the task. The host asserts that AI is now superior to humans for this specific function, giving ReadyAI a potential efficiency and quality advantage.
- The Valuation Discrepancy: The contrast here is even more dramatic. Scale.ai recently achieved a $28 billion valuation after a major investment from Meta. ReadyAI, its decentralized counterpart, has the same market cap as Dippy: just $15 million.
- High-Caliber Team: The host emphasizes the credibility of the ReadyAI team, which includes David Fields (a former Disney executive) and Itai Elbaz, who co-founded and sold AdSense to Google. The involvement of the mind behind one of Google's core revenue engines is presented as a significant vote of confidence.
"The brain power behind it include David Fields who's an ex Disney exec and Itai Elbaz who co-founded AdSense and sold it to Google... I look at these numbers and I look at this potential and I and I, you know, I'm pretty bullish, I have to say."
Conclusion: A Clear Arbitrage Opportunity
- The episode highlights a powerful investment thesis: Bittensor subnets like Dippy and ReadyAI are building decentralized versions of proven, high-value business models but trade at a tiny fraction of their centralized peers' valuations. For investors and researchers, this points to a clear directive to investigate these on-chain assets.
