Voting mechanism and Tokenomics of Backprop Subnet Token

Vote-escrowed Backprop Subnet tokens (or ve-dTAO) shall be the sole token that will used for voting. In order to gain voting power, the holder of Backprop Subnet token need to lock the tokens to obtain an ERC-721 representation (also known as veNFT) of the vote-escrowed Backprop Subnet token in exchange. Additional tokens can be added to the veNFT at any time. The lock period can be up to 4 years, following the linear relationship shown below:

100 $dTAO locked for 4 years will become 400 $ve-dTAO

100 $dTAO locked for 1 years will become 100 $ve-dTAO

The longer the vesting time, the higher the voting power of the underlying locked balance. The user can choose to auto-max lock where the vesting time does not tick down to maintain the highest possible voting power for the locked balance.

The ve-dTAO can be redeemed upon expiration of the locking period to retrieve either the ERC-20 representation of wrapped Backprop Subnet token or the actual Backprop Subnet token on Bittensor chain.

Backprop Subnet tokens holder are incentivised to lock their subnet tokens over a long time horizon in order to vote and benefit from the rewards from the Backprop Subnet for those who directly participate and contribute to the incentives decision process of the Subnet.

This tokenomics is designed to keep the Backprop Subnet token to be continuously staked in the Subnet pool, which will in turn increase the total TAO emissions available for the pools in Backprop Finance, and also ultimately increase the value of Backprop Subnet token, creating an incentives flywheel that facilitates healthy capital flow for Bittensor ecosystem.