♟️Game Theory & Economies of Scale

Bittensor subnets are in a constant state of competition, seeking to acquire a greater effective stake and therefore a greater impact on the network. Subnets/delegates that fail to reward delegators adequately will see their effective stake drop dramatically, resulting in lesser rewards, resulting in greater bleeding of delegators - an inevitable doom for the subnet itself. As a protocol dedicated to acquiring and delegating TAO, upon reaching sufficient scale, TaiNet may have the ability to uplift less delegated subnets, while also controlling the majority of that subnet’s effective stake - resulting in TaiNet accruing the majority of the client subnet’s validator rewards. These types of aggressive strategies can provide a substantial edge over more passive delegators. However, in earlier stages, TaiNet will focus on delegating to subnets with existing network dominance, or existing revenue accrual models for their applications - ensuring that yTAO holders acquire the highest possible rewards.

When one delegates a greater number of TAO to the subnet than the subnet validator possesses, the delegate will control the majority of the subnet’s effective stake.