What is dTAO?
Bittensor’s Dynamic TAO (dTAO) completely changes the way staking works, putting control directly in the hands of TAO holders. Before, validators decided how your stake was distributed, choosing which subnets to support. Now, you make that choice—allowing you to directly influence which subnets grow and thrive.
With Dynamic TAO, staking is no longer just about passive rewards—it’s about shaping the network.
Why Dynamic TAO?
Dynamic TAO creates a fairer, more competitive ecosystem by giving every TAO holder a say in how emissions are distributed.
- Direct Control: Choose exactly which subnets to support.
- Multi-Directional Rewards: Earn different subnet tokens that can increase in value as the subnet succeeds.
- Decentralized Competition: Subnets must prove their value to attract stake, making the system more efficient.
If you believe in the power of decentralized AI, Dynamic TAO gives you the unique opportunity to take part in its growth.
How Staking Works: A Step-by-Step Guide
Step 1: Stake to a Trusted Validator
- Before you can interact with subnets, you must first stake your TAO to a validator.
- Validators are your access point into the network—they register at different subnets and enable you to participate in them.
Step 2: Exchange for Subnet Tokens
- Once staked, you can exchange your TAO for subnet tokens based on the subnets your validator supports.
- Each subnet has its own token (e.g., ALPHA for Subnet 1, BETA for Subnet 2, etc.).
- These tokens represent your stake and influence within that subnet and allow you to earn rewards from its growth.
- The more TAO staked in a subnet, the more emissions it earns.
Subnet Tokens: How They Work (and What to Watch For)
To keep things simple, we’ll refer to all subnet tokens as “ALPHA”, but in reality, each subnet has a unique token that is only exchangeable for TAO.
⚠️ BE AWARE OF SCAMS CLAIMING TO BE ALPHA TOKENS.
When you stake TAO to a subnet:
- Your TAO enters the subnet’s pool, determining your share of subnet tokens.
- Your stake helps decide emissions—the more TAO in a subnet, the more rewards it gets.
- When you stake TAO, you withdraw ALPHA from the pool. This changes the balance of TAO vs. ALPHA in the pool, increasing the price of ALPHA.
Understanding Slippage: Why Timing Matters
Just like exchanging money in a foreign country, the price of subnet tokens (ALPHA) changes based on supply and demand. This is called slippage—the difference between the expected exchange rate and the actual rate you receive.
- If a subnet has fewer TAO stakers, ALPHA tokens are cheaper, meaning you may receive more ALPHA per TAO staked.
- If a subnet is rapidly growing, new TAO stakes reduce the ALPHA in the pool, which increases ALPHA’s price, reducing how much ALPHA you receive per TAO staked.
How ALPHA Emissions Work
TAO emissions determine how many new ALPHA tokens enter the pool per block (ALPHA_IN) based on the price of ALPHA.
This follows the equation:
ALPHA_IN per block = TAO emissions ÷ ALPHA price
This means:
- When ALPHA price is low, more ALPHA enters the pool per block.
- When ALPHA price is high, fewer ALPHA tokens enter the pool.
At the same time, ALPHA_OUT (the emissions that flow to subnet miners, validators, and subnet owners) follows the rule:
ALPHA_OUT = 2 - ALPHA_IN
- 41% of ALPHA_OUT goes to Validators
- 41% goes to Miners
- 18% goes to Subnet Owners
This balance ensures that subnets remain competitive, and emissions respond dynamically to demand.
Root Staking: A Lower-Risk Option
If you prefer a simpler, safer staking method, Root Staking (Subnet 0) gives you two options for rewards.
Option 1: Rewards in TAO
- Auto-converted rewards—Your validator still earns subnet rewards on your behalf, but these are automatically exchanged back into TAO.
- Best for those who want rewards without managing multiple tokens.
Option 2: Rewards in ALPHA
- Receive ALPHA tokens from all the subnets where your validator is validating/child-keying.
- Ideal for those looking to gradually diversify their ALPHA token holdings.
Early Staking: High Risk, High Reward
Being an early staker in a new subnet is like getting in on the ground floor of a startup—high risk, high reward.
- New subnets start at a 1:1 TAO/ALPHA ratio, but the value often fluctuates in the early days.
- High early inflation, low initial emissions—subnet tokens tend to start cheap but can gain value as the subnet grows.
- Early adopters can accumulate more subnet tokens while competition is low, potentially benefiting if the subnet gains traction.
- Understanding ALPHA price movement is key. Early entry can be rewarding, but risks are higher too.
How Dynamic TAO Creates Long-Term Value
Unlike traditional staking, Dynamic TAO encourages long-term participation and network growth.
- Validators benefit from holding α tokens, strengthening their influence and subnet position.
- Miners and Subnet Owners attract more stake by improving their subnet’s value.
- Stakers have a say in the network’s future by choosing which subnets to support.
Dynamic TAO ensures that success is earned through innovation and demand—not predetermined by central validators.
A More Competitive & Decentralized System
Before, root validators controlled emissions. Now, every TAO holder has a voice in where emissions go.
- Subnets must prove their worth to attract stake and grow.
- Subnets that don’t innovate will lose support.
- Validators, miners, and stakers all share in the network’s growth.
This decentralized system ensures that the best and most valuable subnets thrive.
