> For the complete documentation index, see [llms.txt](https://docs.tensorusd.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tensorusd.com/protocols/dmm-and-subnet.md). # DMM & Subnet TensorUSD operates on subnet architecture of Bittensor to peg TUSDT for USD dollar by implementing Decentralized Market Making (DMM) protocol. Currently SN113 is used for DMM protocol in 3 core functionalities. **a) Dynamic Supply Rate of TUSDT through Subnet:** Subnet-level emissions operate as a dynamic supply rate on the maximum feasible circulating supply in real-time. This supply constraint is coupled to subnet emission, which represents the protocol’s partial overcollateralized value base and underwrites redeemability. Users are able to exchange 1 TUSDT for 1 USD under this mechanism. In this design, monetary expansion is therefore not treated as an exogenous parameter, but as an endogenous function of the subnet’s capacity to maintain overcollateralized backing and reliable convertibility. **b) Miners as Market Makers and Liquidators:** Miners serve as decentralized market makers and liquidators. They are tasked to preserve the Asset Backing Collateral Vault (ABCV), TUSDT peg, and sustain a healthy market through liquidation of risky vaults. Through validators, miners are instructed to take actions like buying or selling TUSDT or SN113 alpha, reallocating liquidity across vaults, adjusting quotes, and participating in liquidation processes when collateral positions breach risk thresholds. **c) Contribution Mapping Weights:** Validators coordinate this decentralized market-making layer and impose accountability through performance measurement. They assign protocol-level tasks to miners, define evaluation criteria linked to peg maintenance and solvency targets, and assess each miner’s contribution using observable outcomes (e.g., stabilization of the TUSDT price around its target, improved market depth, reduced spread volatility, lower slippage, effective liquidation execution, and preservation of overcollateralization). Based on these assessments, validators allocate weights that determine miner rewards. d) **Decentralized Price Oracles:**\ Miners compete to provide accurate and efficient price data feeds to TUSDT protocol. For this, a separate subnet mechanism is created with some allocated miner rewards. Including this price oracle, there are 2 mechanisms in SN113. While the liquidator agent mechanism is winner-takes-all, price oracle mechanism is reward for contribution. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation by asking a question. Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters: ``` GET https://docs.tensorusd.com/protocols/dmm-and-subnet.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.