TAOFU
  • Overview
  • The Evolution of Bittensor: From Legacy to dTAO
  • The Subnet Owner’s Dilemma: Growth vs. Liquidity
  • Taofu: A Sustainable Path Forward
    • The Tokenization Process
    • Preserving Liquidity, Unlocking Potential
  • The Taofu Ecosystem: Features and Integration
  • The Role of $TAOFU: Fueling the Ecosystem (WIP)
  • Strengthening the Bittensor Network
  • Risk Diversification and Composability
    • Owning Subnet Shares (SNS): A More Conservative Approach
    • Composable DeFi Strategies
  • Technical Specifications
    • Sale Setup & Subnet Owner Onboarding
    • Token Pricing & Supply Mechanics
    • Liquidity Provision
    • Vesting & Lock-Up Schedules
    • Whitelisting & Participation
    • Post-Sale Process
    • Subnet Ownership & Governance
    • Potential Future Role of SNS Holders
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The Evolution of Bittensor: From Legacy to dTAO

PreviousOverviewNextThe Subnet Owner’s Dilemma: Growth vs. Liquidity

Last updated 1 day ago

Bittensor’s decentralized network incentivizes the creation of machine intelligence through a dynamic subnet ecosystem. Historically, TAO holders delegated tokens to validators, who directed emissions to subnets in exchange for commissions. Subnet rewards were distributed among owners, miners, and validators, with TAO emissions tied to staking dynamics.

The dTAO upgrade reimagines this model. Each subnet now operates with its own liquidity pool and alpha tokens. Network-wide, 1 TAO is emitted per block, while subnets generate 2 alpha tokens per block. These alpha tokens split into two streams:

- alpha_in (0–1 alpha per block), which flows into the subnet’s liquidity pool, scaling with the pool’s TAO reserves.

- alpha_out (1 alpha per block), distributed as rewards (18% to subnet owners, 41% each to miners and validators).

Subnet success now hinges on retaining TAO in a subnet's liquidity pool. Yet subnet owners face a dilemma: monetizing alpha_out requires selling these tokens for TAO, which depletes the pool and stifles future rewards.