Tokenomics TUSDT
Overview
TensorUSD (TUSDT) is a decentralized, crypto-collateralized stablecoin soft-pegged to $1 worth of TAO, issued exclusively through a Vault Manager Contract on the Portal Layer (EVM-compatible). The token is designed to maintain price stability, drive TAO utility, and serve as a medium of exchange within the Bittensor AI economy.
TUSDT follows a collateral-backed mint/burn model and is not pre-minted, meaning supply is elastic and fully governed by user deposits of TAO.
Issuance Mechanism
Minting: Users deposit TAO into the Vault Manager Contract on supported EVM chains (e.g., Arbitrum or Optimism). Based on the collateralization ratio (200%), the system mints a corresponding amount of TUSDT.
For example, depositing $2,000 worth of TAO allows minting of up to 1,000 TUSDT.
TUSDT is only minted when this ratio is met or exceeded.
Burning / Redemption: To redeem TAO, users must repay TUSDT and burn it via the Vault Manager. Once fully repaid and system fees cleared, collateral is released.
Collateral Requirements
Initial Collateralization Ratio: 200%
Liquidation Threshold: 150%
Liquidation Penalty: 10–15%, taken from user’s collateral and rewarded to keepers
Accepted Collateral: TAO only (initially)
The overcollateralization protects against volatility and ensures system solvency.
Supply Dynamics
Elastic Supply: TUSDT has no fixed cap. It expands or contracts based on user interactions with the Vault Contract.
Peg Enforcement: The $1 peg to TAO is enforced through:
Vault contract logic
Oracle price feeds (Chainlink + AI-based)
Arbitrage by miners on the subnet via SUSD liquidity pools
Liquidation when collateral ratio falls below 150%
TUSDT vs SUSD
Standard
ERC-20
Subnet-native token
Peg
$1 worth of TAO
Floating value
Use Case
Payments, DeFi, collateral
Incentives, market making
Minting
Collateralized (TAO-backed)
Protocol-controlled
Governance
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Subnet-driven AI DMMs
Price Stability
Soft-pegged to TAO
Market-driven
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