VeniceAI has run up as people begin to notice the quality of Venice’s product and understand the stake-for-inference model. No one is discussing the token’s impact to the balance sheet for companies that use Venice as their inference provider. The DIEM token unlocks capital and improves margins.👇 Inference-as-an-Expense —- Inference is a massive cost center for tech businesses today. It’s a recurring monthly expense that scales with size of the business and cuts into the company’s net income. Right now, we are in the age of subsidized inference cost (thank you VCs), as providers try to onboard users and carve out market share. Within a few years though, these subsidies will wane, just like the cheap ride share fares of 2015-18. And when they do, inference will expand further as a business expense. The Impact to co. financials —- This recurring, growing expense, forces tech cos to maintain high liquidity to cover the monthly bill. A co. can’t rly use its equipment or long term investments to pay the monthly inference bill. They need to always have cash and equivalents set aside to cover the bill. This effectively locks up capital that could otherwise be used to invest in long term company growth, like new equipment or R&D. Inference-as-an-Asset —- Venice’s DIEM token grants token holders $1 of inference/day, refilling every 24 hrs, forever. The same co. described above with high inference needs can instead buy and stake the DIEM token to fully replace their annual subscription costs for inference. Importantly, this shifts the financial structure on the company balance sheet. Instead of allocating cash monthly to an OpEx line item (burn), the company purchases DIEM, which is recorded as an asset. DIEM is an investment by the company that covers their inference consumption indefinitely. The Impact to co. financials —- Now, the company’s hands are no longer tied, burning cash monthly on their inference bill. They hold a capital asset with value in a liquid market. They have more financing options that keep cash free to spend where it’s most helpful for the business. Companies can take out debt against their staked DIEM tokens. Not only can DIEM serve as collateral for a loan, but it’s also a yield-bearing asset generating free cash flow. Now, the company has: (1) eliminated a major recurring subscription expense (2) added a yield-bearing asset to its balance sheet long term investments (3) taken out debt (using DIEM as collateral) to further invest in long term company growth Parallels to Bittensor As I write this, I am further convicted in my VVV trade, but also see the clear parallels to Bittensor subnet tokens and DePIN broadly. For the businesses built on top of Bittensor’s subnets, the alpha token funds their miners which is most similar to an R&D or compute expense. Just like with DIEM, the alpha token converts what would be a cash expense into a treasury-held asset. It’s a capital asset for the subnet team that grows as they acquire their share of new emissions and earn yield on their existing stack of tokens. Like companies that stake DIEM to cover their inference, businesses that choose to build on Bittensor can: (1) reduce their burn rate on R&D (2) add a yield bearing token to their LT investments (3) use the asset as collateral for loans to fund company growth While # 3 is still in the distance for subnets, this will come. The lending infra hasn’t been built out yet and alpha tokens are too volatile (under the shadow of TAO volatility). But this will come.