The given equation involves an infinite nested radical. We can write it as:
$y = \sqrt{\log(x^2+1) + y}$.
To remove the radical, we square both sides of the equation:
$y^2 = \log(x^2+1) + y$.
Rearrange the terms to prepare for implicit differentiation:
$y^2 - y = \log(x^2+1)$.
Now, we differentiate both sides with respect to $x$:
$\frac{d}{dx}(y^2 - y) = \frac{d}{dx}(\log(x^2+1))$.
Using the chain rule on both sides:
$2y\frac{dy}{dx} - 1\frac{dy}{dx} = \frac{1}{x^2+1} \cdot \frac{d}{dx}(x^2+1)$.
Factor out $\frac{dy}{dx}$ on the left side:
$(2y-1)\frac{dy}{dx} = \frac{1}{x^2+1} \cdot (2x)$.
Finally, solve for $\frac{dy}{dx}$:
$\frac{dy}{dx} = \frac{2x}{(x^2+1)(2y-1)}$.