This episode breaks down how Void AI is building the multi-chain bridge for Bittensor, transforming siloed subnet tokens into composable DeFi assets on Solana and Ethereum.
Hansel Melo's Journey: From AI Tinkering to Bittensor Mining
- Hansel Melo, founder of Void AI, recounts his early days in 2021 exploring AI before the launch of ChatGPT. He used OpenAI's playground to automate product research for a blockchain development company, successfully reducing a four-week whitepaper creation process to less than a week.
- This initial success led him to build a simple application to streamline the process for his team. However, he quickly ran into a major obstacle: cost.
- Hansel notes the unsustainability of early AI models, stating, "I'm spending like practically a dollar every request... this is not going to be sustainable. Even if I charge like a $100 a month... it still wouldn't even be enough to cover the expenses."
- This cost barrier pushed him to seek alternatives, leading him to Bittensor, one of the few projects at the intersection of AI and blockchain at the time. After exploring other projects like Ocean Protocol and Vector Space, he dove into Bittensor upon its mainnet launch in November 2021.
- Despite a steep learning curve, he went from running one miner to over 100 on the original single subnet, deploying models from Hugging Face—an open-source platform for machine learning models—and gaining a deep understanding of the network's potential.
The Validator Pivot and Early Application Challenges
- Hansel's next logical step was to run a validator, which acted as a gateway to the models run by miners. This would allow him to build his application on top of the validator and subsidize request costs with TAO emissions, effectively solving his initial cost problem.
- However, he realized he was too early. The open-source models available on the network at the time (e.g., 7-billion parameter models) were not powerful enough to produce high-quality outputs for his application.
- Pivoting his strategy, he launched Neuro Internet, one of the first public validators on Bittensor. He used the 18% validator fee to fund the compute costs for applications he deployed on Hugging Face.
- This strategy successfully onboarded new users to the Bittensor ecosystem, demonstrating its potential as an "incentive layer" even before the concept was formalized.
- This experience culminated in creating ChatNI, a fork of OpenTensor's ChatTensor, which served as a proof of concept for building applications directly on a validator. This project later inspired others, including Talus's Corcel.
The Genesis of a Multi-Chain Vision
- Hansel initially envisioned creating a liquid staking derivative for TAO (stTAO) to unlock the 80-90% of TAO staked on the network, making it usable in DeFi. A liquid staking derivative is a token that represents a staked asset, allowing the holder to participate in other financial activities while the original asset continues to earn staking rewards.
- The shift to Dynamic TAO, a mechanism that reallocates TAO emissions across different subnets based on performance, made this specific idea obsolete. The new goal became fostering liquidity within subnet pools rather than on the root network.
- This pivot led to a broader vision: solving the problem of liquidity being siloed within the Bittensor ecosystem. The new goal was to make Bittensor a multi-chain protocol.
- Void AI (Subnet 106) was created to build this infrastructure, focusing on a cross-chain bridge to allow TAO and all subnet tokens to flow freely to other chains like Solana and Ethereum.
Void AI's Bridging Solution: Subnet 106
- Simplifying User Experience: The bridge allows users to interact with Bittensor assets using familiar wallets like Phantom (Solana) and MetaMask (Ethereum) on decentralized exchanges like Radium and Uniswap. This removes the need to navigate the native Bittensor wallet and staking process.
- Creating Wrapped Tokens: The bridge creates "wrapped" versions of Bittensor tokens (e.g., Wrapped TAO, Wrapped Alpha) that are compatible with other blockchains (SPL tokens on Solana, ERC-20 tokens on Ethereum). Hansel uses the analogy of putting a "space suit on the token so then it could be able to survive in this new environment."
- Enabling Composability: By making these tokens compatible with other chains, Void AI makes the entire Bittensor ecosystem composable. This means its assets can be integrated into existing DeFi applications, such as Aave, a major lending protocol with nearly $20 billion in locked value.
The Economics of Cross-Chain Liquidity
- V3 Concentrated Liquidity: The subnet exclusively uses V3 concentrated liquidity pools. Unlike older V2 pools that spread liquidity across an entire price curve, V3 pools allow providers to concentrate capital within a specific, active trading range. This means a $10 million V3 pool can offer the same trading experience (low slippage) as a $100 million V2 pool.
- Incentivizing Active Management: Miners are incentivized based on their liquidity's proximity to the current trading price. If their position falls out of the active range, they receive zero emissions. This forces miners to become active liquidity managers, constantly rebalancing their positions to ensure deep liquidity where traders need it most.
- Capturing Value: Void AI captures all trading fees generated in these pools. This revenue, combined with bridge fees and staking rewards from the underlying bridged assets, creates a sustainable economic model where income can potentially exceed emission payouts. Hansel emphasizes this is designed to prevent the "value leak" common in traditional liquidity mining programs.
Strategic Design and Competitive Advantage
- Competition and Performance: The fixed 256 UID slots on a subnet create an intensely competitive environment. Only the best-performing liquidity providers who actively manage their positions will earn emissions, ensuring the highest quality of service for traders.
- Dynamic Emission Allocation: The subnet's emission weights for different token pools mirror the TAO emission allocations on the main Bittensor network. If a subnet like SN62 rapidly gains value and receives more TAO emissions, Subnet 106 will automatically increase its own emission incentives for that subnet's liquidity pool, ensuring capital flows to where the Bittensor network itself identifies value.
- Future Integrations: The roadmap includes bridging to Ethereum and Base. An integration with Base would make wrapped Bittensor tokens immediately tradable within the Coinbase app, providing massive distribution and accessibility to a new user base.
Advice for Ecosystem Participants
- For Bittensor Builders: He urges them to leverage the infrastructure Void AI is building. Developers can use the bridge and smart contract capabilities to create novel applications, such as no-code mining platforms or trustless cloud services, by holding wrapped tokens in smart contracts to manage payouts.
- For Crypto Investors: He advises them to look beyond the surface. Instead of treating subnet tokens like meme coins, investors should research their utility and value. He encourages them to "bridge back to Bittensor or even just explore the ecosystem... Don't just be an investor. Try to really understand the technology so you could see the implications."
Conclusion
- This episode reveals that Void AI's multi-chain bridge is more than a liquidity solution; it is foundational infrastructure designed to make Bittensor's economy fully composable and accessible. Investors and researchers should monitor the growth of cross-chain liquidity pools as a key indicator of Bittensor's integration into the broader DeFi market.
