Yanez Compliance recently announced their fundraise for their Bittensor subnet, Yanez Multimodal Inorganic Identities (MIID), and we are excited to back them!

Yanez has built an AI-driven platform that addresses the challenge of identity fraud, regulatory compliance, and the limitations of current identity verification and financial crime prevention systems.

But what’s super interesting is that they are powering this platform with synthetic identity data that will come from running a Bittensor subnet, and this is what we invested in.

Let’s dig into how Bittensor works, what Yanez is building, why it’s so important, and why we backed them.

Overview of Yanez Compliance and the MIID Subnet

Yanez Compliance is building AI-powered software for detecting and correcting exposure, weaknesses, and configuration flaws of financial crime prevention systems, including sanctions evasion, identity fraud, money laundering, and more.

To power this platform, Yanez has launched the Yanez Multimodal Inorganic Identities (MIID) Bittensor subnet to generate high-quality synthetic identities for testing and training anti-fraud models and identity recognition algorithms. These synthetic identities mimic real ones by combining real and artificial attributes, enabling robust identity verification and fraud prevention.

To understand the innovation of the Yanez MIID Subnet, you first have to understand the power of Bittensor.

How Bittensor Works

Bittensor is a decentralized blockchain network that creates an open, incentive-driven marketplace for AI models and computational resources.

It works by allowing anyone to deploy, train, and share AI workloads within specialized subgroups called subnets, which focus on a specific AI or machine learning task - such as computer vision, image analysis, and in Yanez’s case, synthetic ID generation.

“Miners” are subnet service providers who execute AI requests. “Validators” assess miners’ work and distribute rewards based on their quality.

Every holder of Bittensor’s native token, TAO, can “stake” in their preferred subnet by swapping their TAO for subnet-specific tokens (called ALPHA tokens) in a subnet-specific liquidity pool.

Each new mined Bittensor block creates rewards in both TAO and ALPHA tokens in a balanced manner:

• TAO emissions: Each subnet receives TAO rewards proportional to the amount of TAO staked in its liquidity pool. For example, if a subnet holds 20% of all staked TAO across the network, it receives 20% of the new TAO emissions per block.

• ALPHA emissions: In addition to the TAO emissions, each block issues a fixed amount of ALPHA tokens. These tokens are distributed between the subnet’s liquidity pool and the participants. The ALPHA tokens represent support for the subnet and can later be exchanged for TAO.

Thus, the success of each subnet is directly tied to the support it receives from the community. High-performing subnets attract more TAO stake and, in turn, receive more TAO emissions, creating a self-reinforcing flywheel.

This decentralized, competitive environment favors continuous improvement and ensures that higher quality subnets are promoted, while less useful ones are demoted or removed.

Bittensor’s architecture allows the global crowdsourcing, sharing, and monetization of AI innovations in a decentralized, censorship-resistant, and scalable manner.

How the Yanez Bittensor Subnet Operates & Its Transformative Potential

The Yanez MIID subnet operates as a decentralized network that facilitates the generation of synthetic identities by connecting Bittensor miners and validators in a structured workflow.

In a nutshell, this is how the subnet works:

• AI Task Assignment: Validators assign tasks to miners based on their capabilities and past performance. They define identity generation requirements and evaluate the quality of outputs provided by miners.

• Implementation: Miners implement AI models capable of generating synthetic identities that meet the specific requirements set by validators. Their models must produce identities that align with predefined metrics, ensuring accuracy and consistency.

• Quality Evaluation: Validators use benchmarking models to assess the identities produced by miners. They compare generated identities against expected metrics to validate their authenticity, diversity, and usability for different applications, and allocate rewards appropriately.

This system ensures a continuous feedback loop, where miners are incentivized to improve their models to generate higher-quality synthetic identities. As miners refine their techniques, validators can dynamically optimize assignments, leading to an efficient, scalable, and decentralized identity generation process.

One very important aspect is that there already is organic demand for these synthetic identities - the Yanez Compliance SaaS product. Many subnets fail because they do not have the demand for the AI outputs that they supply. Yanez already has inherent demand, which will allow them to bootstrap their subnet and eventually expand to address all synthetic data needs.

Potential Impact of this Model

There are clear benefits to Yanez’s approach:

• Lower cost with increased quality metrics: Global crowdsourcing of synthetic ID data generation fosters more comprehensive, geographically-diverse datasets at a lower cost.

• Privacy by design: Synthetic datasets allow for a broader range of IDs without exposing real, sensitive data.

• Network collaboration: Subnets are composable and can leverage each other’s capabilities to make synthetic ID generation even more efficient and cost-effective.

This model has the potential to fundamentally change how AI compliance tooling and datasets are built, shifting from centralized, proprietary systems to open, continuously-refined intelligence markets. Eventually, this approach can transform how any AI-driven software product will be developed.

Market Size & Growth

Yanez sits at the intersection of two large and rapidly-expanding markets:

• Financial crime compliance monitoring: According to Forrester and LexisNexis, the annual cost of financial crime compliance totals $61 Billion in the United States and Canada alone. It’s a huge problem.

• Synthetic data: The synthetic data market is just getting started and is accelerating rapidly, at a CAGR of 35.2%. As AI continues to expand, so will the market for synthetic data.

Together, these two domains form a high‑growth, synergistic space that Yanez can win with their innovative approach.

Why we love the Yanez team

The Yanez founding team blends decades of market experience, technical depth, and a successful track record.

Jose Caldera (CEO), Bin Tang (CTO), and Asem Othman (Chief AI Officer) have over six decades of combined experience building technology products and worked together for many years. They have achieved multiple successful exits, selling companies to Visa and McAfee.

And they have the technical and operational chops at the intersection of their two primary markets - financial compliance and AI.

We have full confidence in the Yanez team to execute their vision relentlessly.

Conclusion

We are excited to back the Yanez team as they grow the Yanez MIID subnet!

We believe that they have the skills and experience to leverage the meritocratic Bittensor ecosystem to transform how AI-driven software is built.

Congrats to the Yanez team for their successful fundraise!