👜Value Accrual Through Delegation

Staking rewards from subnets are derived by delegating to subnet validators, thereby increasing that validator’s effective stake in the total network - increasing their total rewards. Validators and their delegates split the rewards in a ratio based on each player’s share of the effective stake - made up of the TAO held in the subnet validator plus the TAO delegated.

The Delegate Take impacts rewards accrued by delegates further - each subnet validator sets a fee share that they take from the rewards delegates earn. The default value of the delegate take is 18%, but different subnets may choose to set lower takes in order to be competitive in attracting delegation.

The purpose of Bittensor Subnet Aggregation is to estimate the impact delegation of protocol-controlled assets will have on the effective stake of any given subnet, determining the share of validator rewards the protocol can inflow, as well as the total rewards generated by each subnet validator.

Subnets will attract delegates, and greater rewards, either by attracting a great deal of users to the subnet or by generating a great deal of revenue. The former drives a great deal of network traffic and positive attention to the network, which is beneficial for validators. The latter will drive validator delegation through revenue-based applications, such as a multi modality subnet that indexes the entire internet, a cortex subnet with a chatbot competing with OpenAI’s Chat-GPT Premium, and a price prediction subnet where miners can earn thousands of dollars daily by predicting the bitcoin price with their models. These applications will create subnet revenue of which delagators will earn a share.