Every block, 1 tao is emitted by the chain (until 10.5M blocks are emitted and the first Halving occurs). Where do these blocks go?

The tao is divided amongst the subnets and the fraction of tao awarded to each subnet is placed into the tao_in of the Subnet Pools.

Flow based emission

Starting in November 2025, tao flow will begin to be a part of the tao emission equation. Byy december 20225, 100% of tao emitted will be based on tao flow.

What is flow

In every subnet, tao flows in and out of the liquidity pool through staking actions:

Flow is only staking it is NOT based on emission, root proportion or neuron registration.

To smooth this equation, each subnet's flow is placed in an exponential moving average with a half life of 30 days:

Now this flow can still be negative- and we cannot have a negative flow (removig tao from the subnet), so we only use flow EMAs that are. above zero.. and those below zero are set to zero.

We can then normalize the flows across all subnets:

Price based emission

Tao emission (also known as tao_in) on a subnet is calculated by finding the subnet price, and dividing by the total of all subnet prices. This approach is being phased out, and will be no longer used in the network by December 2025.

This ensures that 1 tao is emitted every block, and distributed amongst the subnets.

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Tao_in example:

If the Sum of all prices is 1.8, and the price for a Subnet is 0.2.

tao_in will be 0.2/1.8 = .111 per block.

Caveat:

In reality, the tao_in is determined by an Exponential Moving Average (EMA) of price, but in most cases, the simple illustration above is good enough.