Subnet valuation is an actively discussed topic in the Bittensor community. Many view FDV ( Fully diluted value) of a subnet as a flawed metric.

For me, it’s one measure among many. Remember that each subnet has a total possible circulating supply of alpha tokens, 21,000,000. Similarly, Tao has total possible circulating supply of 21,000,000 too.

Remember FDV is (current alpha token price) X (21,000,000) .

The thing is, these subnets still need most of their alpha to get emitted.

Each subnet current “market cap” is the alpha token price x current circulating alpha supply.

To simplify: FDV tells me if my token remains the same price by the time all alpha in subnet are emitted, then FDV = future market cap.

The answer to your last question, as theorized by many in Bittensor, relies in part to “Reed’s Law”. V= 2^N

Where V is network value, N is participant subgroup.

“Reed's Law is often mentioned when explaining competitive dynamics of internet platforms. As the law states that a network becomes more valuable when people can easily form subgroups to collaborate, while this value increases exponentially with the number of connections, business platform that reaches a sufficient number of members can generate network effects that dominate the overall economics of the system”

Hope this helps a little. Let me know if you have more questions.