Dynamic TAO FAQ
Timing / Rollout
What is the rollout timeline for Dyanmic TAO? What determines the timing?
Dynamic TAO is currently live on testnet. It's rollout to Bittensor mainnet will depend on how things go, but is expected in the next few weeks.
How will Dynamic TAO take effect?
The state of the network as far as ledger balances and consensus power will not change immediately upon upgrade; it will occur gradually as subnet specific alpha tokens are emitted and staked into circulation.
In Dynamic TAO, validator weight—a critical score that determines consensus power as well as dividend rewards—is determined by a combination of TAO and alpha token holdings. When Dynamic TAO is initiated, there will be no alpha in circulation, so validator's stake weights will be entirely determined by their share of TAO stake.
But far more alpha than TAO is emitted into circulation every block. As a result, over time there will be more alpha relative to TAO in overall circulation, and the relative weight of a validator in a given subnet will depend more on their alpha stake share relative to their share of the TAO stake on Subnet Zero.
In order to hasten the process of alpha gaining the majority of stake power in the network, the contribution of TAO stake to validator stake weight is reduced by a global parameter called TAO weight. Currently, this is planned to be 18%, in order to achieve a weight parity between TAO and total alpha in approximately 100 days.
See Emission of rewards in Dynamic TAO
Will there be a cap on alpha currency?
Yes. There is a hard cap of 21 million for any subnet's alpha token, the same as for TAO itself.
2 alpha tokens per subnet will be emitted each block, while only 1 TAO is emitted and shared across the whole network.
TAO-holders / Stakers
How has staking changed?
Instead of staking TAO to a validator, in Dynamic TAO, you stake to a validator on a specific subnet. This can be either a mining subnet (most subnets) or the unique root subnet, a.k.a. Subnet Zero.
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When you stake on a mining subnet, you exchange TAO for a dynamic token, the alpha of the subnet on which the validator is working, and stake that into the validator's hotkey.
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When you stake on the root subnet, you stake TAO. But the root subnet is just another subnet, although one with some special properties. All staking is local to a subnet.
What is the risk/reward profile of staking into a subnet?
Staking to validators on specific subnets is higher-risk, but potentially offers higher-rewards compared to holding TAO or staking TAO to validators on Subnet Zero.
Each new subnet has its own token, referred to as its alpha. When you stake into a validator within a given subnet, you exchange TAO for that subnet's alpha. When you unstake from the validator in that subnet, you exchange the alpha for TAO. Staking and unstaking is therefore sensitive to the price of the alpha. This price of a subnet's alpha is the ratio of TAO in its reserve to alpha in reserve.
Staking TAO into a subnet essentially exchanges TAO for that subnet’s alpha token. To exit value, alpha must be exchanged back for TAO at the going rate.
Held stake (alpha tokens) may increase or decrease in TAO value as the price of the alpha changes, but staked alpha will earns more dividends in the long run, as the balance of alpha to TAO in the network increases.
Can users transfer alpha tokens (subnet tokens)?
No, direct transfer of alpha tokens between wallets (other than when involved in staking) is not allowed in Bittensor. Alpha tokens cannot be transferred like TAO, only staked and unstaked.
TAO-holders can acquire alpha tokens by staking TAO into a validator in the corresponding subnet. Miners, validators, and stakers receive alpha tokens through emission. There is no other way to acquire them.
How will Dynamic TAO affect governance of the network?
Dynamic TAO does not directly change Bittensor’s on-chain governance mechanism (i.e., proposals and voting).
How do dividends/emissions to root subnet/Subnet 0 stakers work?
Of the 41% of total emissions received by validators, each subnet gets a share based on the price of its token—but what about the root subnet, which has no token? Stake in the root subnet applies in all subnets in which a validator works
In each subnet, each validator receives a share of the TAO dividends proportional to its relative stake weight in the subnet. Refer to Core Dynamic TAO Concepts: Validator stake weight.
Subnets
Subnet Zero
In dynamic TAO, Subnet Zero is a special subnet. It is the only subnet that does not have its own currency. No miners can register on subnet zero, and no validation work is performed. However validators can register, and -holders can stake to those validators, as with any other subnet. This offers a mechanism for -holders to stake into validators in a subnet-agnostic way. This works because the weight of a validator in a subnet includes both their share of that subnet's and their share of staked TAO in Subnet Zero.
Subnet Zero is sometimes called the root subnet, since it sort of replaces the root network in the pre-Dyanmic-TAO architecture. However, Subnet Zero does not perform consensus over subnets, which was the defining function of the root network.
What will it take to start and manage a subnet in Dyanmic TAO?
The process of registering a subnet in Dynamic TAO will be very similar to the process of registering a submit previously, except that the cost to register the subnet is now burned, rather than being a lock cost returned to the subnet owner on de-registration. This is because subnets are not deregistered in Dynamic TAO.
How will Dynamic TAO affect subnet governance (weight-setting)?
Each validator’s weight in the subnet is a function of the TAO staked to them on the subnet plus the TAO staked to them in Subnet Zero, with the value of the TAO being multiplied by the TAO weight, which is between 0 and 1.
What happens when a subnet is abandoned?
If no participants use or mine a subnet, its token will likely drop to negligible value. Other subnets and the root remain unaffected. Each subnet’s success or failure is largely self-contained.
Currently, the protocol does not automatically deregister subnets. Abandoned subnets may be revived.
Do subnet owners control emissions for their own tokens?
No. Emissions are calculated by protocol logic (e.g., in run_coinbase.rs) and are based on network-wide parameters. Subnet founders cannot arbitrarily print tokens—emission follows the same consistent rules across all subnets.
See Emission of rewards in Dynamic TAO
What happens to previously locked registration costs from pre-Dynamic-TAO subnets?
They are returned to subnet owners when Dynamic TAO is initiated, on the same coldkey that registered.
Miners and Validators
How will miners (and validators) manage the proliferation of subnets?
Miners and validators must now consider the TAO value of the alpha token in which they receive emissions.
Miners can and must shift their work among subnets, depending on the value of the subnets and their own ability to compete. More subnets will mean more opportunities for specialized work.
Miners/validators may need to watch markets (token prices, volumes) to optimize their allocations, much as proof-of-work miners in other crypto systems monitor different chains to see which is most profitable to mine.
Where can I find more technical details right now?
- Codebase: Refer to the Bittensor codebase, especially
run_coinbase.rs, which calculates emissions logic for subnets and the root network. - A forthcoming Dynamic TAO whitepaper!