Targon Update: Laying the Foundation for Sustainable Compute on Bittensor

Three months into operating dTAO, Targon is launching a regular update series to keep the community informed on progress and strategic direction. The focus remains clear: building a long-term, sustainable compute layer for the Bittensor network.

At its core, Bittensor is emerging as a marketplace for digital commodities — with compute as the most critical asset powering the AI revolution. Today’s compute market is riddled with inefficiencies, often driven by expensive financing structures. Targon sees an opportunity to address this by creating a more capital-efficient, accessible, and performant compute ecosystem.

Bittensor currently emits over $1 billion worth of TAO annually. Managing these emissions responsibly is essential. Rather than using them to subsidize free inference, Targon is focused on building enterprise-ready AI infrastructure. A key example is its partnership with Dippy, an AI companion app processing more than 10 billion tokens daily, for which Targon is developing a high-performance custom inference engine.

A growing issue in the ecosystem is the reliance on rented compute. Many miners today do not own their hardware, leading to short-term arbitrage and volatility. Targon is actively transitioning toward working with institutional compute providers, bringing hardware owners directly into the network — a shift similar to what happened in Bitcoin post-2013.

To maintain market sustainability, Targon is currently burning 70% of emissions, ensuring payouts (currently ~$2.80/hr for an H200) align with market realities. The strategy is to match organic revenue with miner payouts, gradually reducing dependence on token inflation.

Targon’s long-term goal is ambitious: to assemble a compute layer strong enough to compete with the largest AI labs. With the right foundation — efficient capital, real revenue, and reliable infrastructure — this vision is well underway.