Subnet Alphanomics

The Nepher Robotics subnet employs a unique token economic model designed to balance accessibility for robotics engineers with protection for token holders. This document outlines the alphanomics (alpha token economics) of the subnet.

Overview

The subnet's economic model is built around two primary token types:

• TAO Tokens: The native token of the Bittensor network, used for miner payouts
• Subnet Alpha Tokens: The subnet's native tokens, used for validator staking and governance

Miner Reward Structure

TAO-Based Payouts

Miner rewards are distributed in TAO tokens directly to the wallet address associated with the miner's API key, rather than in subnet alpha tokens. The source of these payout TAO and our opex is from external funds and not from subnet emission.

Rationale for TAO Payouts

This payout structure addresses two critical objectives:

1. Lowering Onboarding Barriers

The TAO payout model significantly reduces barriers to entry for experienced robotics engineers:

• Web3 Familiarity: Many robotics professionals have limited exposure to Web3 ecosystems and token mechanics
• Reduced Complexity: Using TAO—a more established and widely recognized token—minimizes the technical knowledge required for participation
• Accessibility: Enables robotics engineers to contribute their expertise without needing to understand subnet-specific token economics
• Market Liquidity: TAO tokens are more liquid and easier to exchange, providing immediate value to participants

2. Protecting Subnet Token Holders

Paying miners in TAO rather than subnet alpha tokens protects existing token holders:

• Eliminates Sell Pressure: Prevents scenarios where miner token sales could negatively impact the subnet's token price
• Stable Token Economy: Ensures a more predictable and stable token economy
• Holder Value Protection: Protects the value of existing token holdings from dilution through miner distributions

Token Acquisition Model

Direct Purchase Only

Under this economic model, the only mechanism for acquiring subnet alpha tokens is through direct purchase. This design ensures:

• No Mining Distribution: Subnet tokens are not distributed to miners, eliminating one source of potential sell pressure
• Intentional Participation: Token acquisition requires deliberate action, attracting committed participants
• Price Stability: Reduced token supply volatility from mining distributions

Emission Management

Miner Emission Burning

In alignment with the TAO payout model, the subnet fully burns all miner emissions. This means:

• Permanent Removal: All emissions allocated to miners are permanently removed from circulation
• No Token Distribution: Miner emissions are not converted to subnet tokens or distributed in any form
• Supply Management: This burning mechanism helps manage token supply and supports long-term value

Emission Flow

Subnet Emissions
    ↓
Allocated to Miners
    ↓
Fully Burned (Permanently Removed)
    ↓
Miners Receive TAO Tokens (Separate from Emissions)

Economic Benefits

For Miners

• Immediate Value: Receive TAO tokens that are immediately usable and liquid
• Lower Barriers: No need to understand complex subnet token mechanics
• Focus on Robotics: Can concentrate on robotics expertise rather than token management

For Token Holders

• Price Protection: Protected from sell pressure from miner distributions
• Stable Economy: More predictable token economics
• Value Preservation: Token value is not diluted through mining distributions

For the Subnet

• Sustainable Growth: Economic model supports long-term subnet development
• Quality Participation: Attracts committed participants through intentional token acquisition
• Balanced Ecosystem: Maintains balance between accessibility and economic stability
• Embedded Buyback: Miners who were paid out TAO are likely buy alpha token as they see vision of the subnet because robotics engineers can realize most correct what it all means in the future. This means this economic model is a buyback-embedded from miners.

Integration with Tournaments

The alphanomics model directly supports the tournament reward structure:

• Tournament Winners: Receive TAO payouts based on performance rankings
• Bounty Payments: Community contributors also receive TAO for meaningful contributions
• No Subnet Token Distribution: Tournament rewards do not include subnet alpha tokens