A $TAO Subnet + ZkML + DeFI + AI
Raised $3.9M funding from Tier 1 VCs like Pantera, Ycombinator, Kucoin
A sub $9M MC project to incorporate Bittensor Framework with subnet 🧵👇
Integrating AI into DeFi
A groundbreaking integration between Bittensor, a leading AI protocol in the cryptocurrency domain, and Sturdy Finance, a pioneering DeFi platform, is setting new benchmarks.
This collaboration leverages the advanced capabilities of Bittensor’s TAO subnets to usher in a new age of efficiency and optimization in decentralized finance (DeFi).
Background: Sturdy Finance's Vision
Sturdy Finance, a trailblazer in the DeFi lending protocol realm, has consistently pushed the boundaries of innovation.
Backed by industry giants such as Pantera and Y Combinator, Sturdy operates on both Ethereum and Mode networks, leveraging a unique two-tier architecture that combines isolated lending pairs with aggregators.
This novel approach not only isolates risk but also prevents the fragmentation of liquidity, addressing two critical challenges in the DeFi sector.
The Bittensor Framework and TAO Subnets
Sturdy integrates with the Bittensor framework, an AI network consisting of 32 distinct subnets.
These subnets represent a competitive ecosystem where validators prompt miners to execute various AI-related tasks, fostering a competitive environment that drives excellence.
Miners vie for superiority, with rewards distributed based on the quality and efficacy of their work. This competitive model ensures that the AI models and products derived from this process are of the highest caliber, marking a significant advancement in AI modeling and its applications in real-world scenarios.
Sturdy's Two-Tiered Approach to DeFi
@SturdyFinance introduces a two-tier architecture to the DeFi space, comprising isolated lending pairs and an aggregation layer.
This structure is designed to optimize yield generation and risk management. The aggregation layer, in particular, plays a crucial role by depositing into whitelisted lending pairs, thereby allowing investments across multiple isolated pairs to secure the best possible rates.
This approach has gained traction amidst the burgeoning interest in LRTs, enabling a broad spectrum of protocols to diversify their asset allocations across numerous lending pairs, exemplified by innovative solutions like the pxETH aggregator.
Introducing the Sturdy Subnet
The Sturdy Subnet is designed to be the backbone of Sturdy’s yield optimization framework. This subnet will not only enhance Sturdy’s protocol but is also set to integrate seamlessly with a multitude of other applications, signifying a major leap towards more autonomous DeFi solutions.
Key Features of the Sturdy Subnet:
Yield Optimization: Leveraging the Bittensor network, the Sturdy Subnet empowers miners to process information about aggregators and propose optimal allocation strategies using custom algorithms. Validators then rank these proposals based on yield performance, ensuring that only the most efficient allocations are implemented.
Decentralization and Permissionless Innovation: True to the ethos of DeFi, the Sturdy Subnet facilitates a permissionless and decentralized approach to yield optimization. This opens up opportunities for a wider community of developers and algorithms to contribute towards enhancing DeFi yield strategies.
Broad Applicability: Beyond serving the Sturdy protocol, the subnet is an invaluable tool for any DeFi protocol or off-chain fund seeking to optimize yields through a decentralized framework. This positions the Sturdy Subnet as a pivotal resource within the broader DeFi ecosystem.
AI-Driven Optimization in DeFi
The conventional process of selecting optimal whitelisted isolated pairs for aggregators has been predominantly manual, leading to inefficiencies and suboptimal yield generation.
Sturdy utilizes Bittensor’s subnets so miners can develop algorithms to determine the best allocations for these aggregators, with validators ranking these algorithms based on their performance.
This AI-driven approach not only enhances yield optimization but also introduces a new level of efficiency and transparency to the DeFi sector.
The Future of AI and DeFi
The collaboration between Bittensor and Sturdy Finance marks the beginning of AI and DeFi converging,
The success of this integration suggests a future where subnets could be utilized for a wide array of applications, from liquidity provider (LP) strategies and trading algorithms to innovative credit systems enabling undercollateralized loans.
Its potential goes beyond just enhanced yields but also the broader implications for risk management, market analysis, and financial inclusion within the DeFi ecosystem.
Twitter: https://twitter.com/arndxt_xo/status/1775498390350241906