Bittensor proposal to restructure revenue mechanism: Validators may transform into "fund managers"

Odaily reports that a new governance proposal called "Root Reborn", centered around the decentralized AI network Bittensor, is drawing attention. The proposal was submitted by the developer "unconst" and is currently under code review, not yet implemented on the mainnet.

According to the information, the plan aims to restructure the TAO staking reward distribution mechanism, shifting validators from being passive reward distribution nodes to acting as capital allocators similar to "fund managers." Under the current mechanism, the system sells rewards due to root-level stakers and automatically converts subnet tokens into TAO to pay out yields, a process believed to exert sustained selling pressure on each subnet token's price. The "Root Reborn" proposal, however, suggests that validators can independently choose which subnets to support and reinvest yields that would otherwise be sold back into these subnet assets, creating a compounding asset portfolio. Stakers can still earn yields and redeem with TAO at any time.

The design aims to convert consistent selling pressure into structural buying interest, while also making validators more proactive in selecting capital allocation, thereby strengthening high-quality subnets and weakening low-quality projects.

However, the proposal is still at the GitHub review stage. Early automated reviews have pointed out risks such as large-scale data processing bottlenecks and potential impacts on staker settlements if subnets close. Developers stated those issues have been fixed and further optimization will continue before mainnet deployment.

According to market data, TAO has dropped approximately 28% over the past 12 months, while Bitcoin has fallen about 38% during the same period. The current annualized staking yield is around 17%.