Oceans - Bittensor Liquidity Subnet

Incentive Mechanism

Oceans' goal is to incentivize miners to provide liquidity where the community decides. That is the core idea of the incentive mechanism, which will be implemented in the following way:

Governance

Token holders continuously cast votes to express the relative importance of each subnet.

The voting process generates a normalized weight vector W = [W₁, W₂, …, Wₙ], which is publicly available and auditable.

Provide liquidty

Miners fetch the current subnet weights vector and decide where to provide liquidity. Miners have to decide which subnets are better based on its weights and the current market situation. α-Stake votes will route the emissions, but miners are the ones ultimately deciding.

Reward

Every epoch, the subnet measures the total liquidity provided by the miners, and distributes incentives based on the liquidity provided and the weights holders voted.

I_i,k = E × W_k × (L_i,k / L_k^total)

Reward function

Full Transparency

Because the votes are public anyone can reproduce them and verify that the weight allocation was correct.