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brain-circuitSubnet

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Introduction

As TensorUSD (SN113) is a reserve-backed stablecoin subsystem within the Bittensor ecosystem designed to support 1:1 redeemability with the US Dollar. The subnet’s primary operational focus is liquidation auctions: when collateral backing a vault becomes insufficient (collateral ratio drops below a threshold), the system liquidates collateral via an auction process.

TensorUSD subnet coordinates three key activities:

  • Liquidation execution (miners participate in liquidation auctions by bidding)

  • Incentives and accountability (validators track auction outcomes to reward the winning miners)

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Subnet Architecture

This TensorUSD subnet consists of four Core components.

A) Miner

Core responsibilities include:

  • Bid on liquidated vaults by monitoring the auction contract for new auctions and outbid events

  • Evaluate profitability using live collateral price and reject bids that fall below the minimum profit margin

  • Submit bid transactions on-chain

  • Earn TAO emissions

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B) Validator

Validators are responsible for ensuring correctness incentives. Core responsibilities include:

  • Listens to on-chain auction contract events in real time.

  • Persists auction wins to a local SQLite database.

  • Periodically pulls those wins, computes per-miner rewards, and sets weights on the Bittensor network.

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C) Platform (Contracts / On-chain components)

The subnet interacts with smart contracts that implement vault and auction logic. The subnet integrates with three ink! smart contracts on Substrate:

• Vault Contract — Manages collateralized vaults and provides collateral token price

• Auction Contract — Handles liquidation auctions (create, bid, finalize)

• TUSDT Contract — ERC20-style token used for bidding

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D) Bittensor Network

The blockchain layer that registers participants, executes staking operations, and distributes emissions.

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Benefits of Subnet to:

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Miners

  • Earn Rewards: Liquidation Rewards

  • Flexible Participation: Sets own limits and availability

  • Transparent Scoring: Understand exactly how you're evaluated

  • Decentralized: No central authority controlling your participation

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Validators

  • Support Network: Contribute to subnet health and fairness

  • Earn Emissions: Receive rewards for validation work

  • Influence Quality: Help maintain high standards across the network

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