Are parent hotkeys the new Weight copying?

In September 2024, the Bittensor chain launched parent hotkeys - a way for validators to earn tao from stake, without actually running a validator on the chain. Is this akin to weight copying?

Let’s start with some definitions:

Weight copying

Weight Copying is when a validator runs a neuron on a Bittensor subnet, but does not actively validate and grade the responses of the miners. A weight copier uses other methods (copying one validator's weights, or using the metagraph) to obtain weights before setting them on chain.

Weight copying provides no benefit to the subnet or the ecosystem, but the high accuracy of the results (since they are copying the final results on chain) - gives the weight copier higher emissions than the best honest validator. A quick look at taostats shows that weight copying validators generally have the highest APR and Nom/1k/BTDay results.

Parent hotkeys

A parent hotkey allows a validator to add their stake to an existing validator. This increases the total stake for that validator on the subnet.
For example, at the time of this screenshot, taostats has a total stake of 889k tao on Subnet 6, from taostats and 2 parent validators:

For the benefit of being a parent hotkey, taostats charges a child take of 4.5% - so the returns of PRValidator and Love are reduced by 4.5%, and the 4.5% is distributed to taostats and their stakeholders.

Can parent hotkeys “beat” existing validator returns?

Based on our research, if the parent hotkey chooses child validators with high Vtrust, the parent hotkey can have higher returns than other validators, but they will never beat the validator they are parenting on.

Math

For each child validator we use the taostats API to obtain:
nom/1ktao/BTDay
child hotkey take on each subnet.

As the child hotkey take varies across all subnets, we need to create a weighted child hotkey take (WCHT)

We use the Subnet API endpoint to get the emissions for every subnet. This acts as a weight - subnets with higher emission should have the child take weighted higher.than low emission subnets.

The emissions earned by a parent hotkey on this validator will be:

Doing this maths across top validators:
'Axis': 0.48198,
'Ary van der Touw': 0.45515,
'Owl Ventures': 0.43533
'Taostats & Corcel': 0.41319,
'Datura': 0.41136,
'TAO-Validator.com': 0.4068,
'RoundTable21': 0.40259,
'Bittensor Guru': 0.40259,
'Rizzo': 0.40198,
'FirstTensor.com': 0.40137,

Weight copiers are listed with strikethrough. Parent hotkeys who use only weight copiers will also be tagged as weight copiers. There are 5 non-weight copying validators where a parent hotkey can return a nom/1ktao/BTDay over 0.400 - which is competitive with many regular validators!

Are parent hotkeys the new weight copying?

When parent hotkeys were launched, many of the weight copiers switched some of their stake to parent hotkeys. They found that their returns were lower, and went back to 100% weight copying.

Those validators that have stuck with parent hotkeys are working to grow their stake and become active validators on the network. Their emissions are partially supporting existing validators that are providing benefit to the ecosystem. Validators using parent hotkeys will never have higher emission than the children that are staking on due to the child take.

For this reason, parent hotkeys are a great way for those building in the ecosystem to build a validator without the stigma of weight copying. New validators with only desire to earn emissions will continue to weight copy.

Conclusion:

Parent hotkeys give new validators the opportunity to start a validator on the Bittensor network without the stigma of weight copying. They support existing validators, with reasonable emsission returns. Parent hotkeys will never replace weight copying - weight copying will always provide higher emissions.