Tokenomics
TAO is the native token of the Bittensor network. It serves as the unit of value for staking, registration, emissions, and governance. Understanding its supply mechanics is key to understanding how incentives flow through the system.
TAO & RAO
TAO is the human-readable unit, the one you see in wallets and on exchanges. But on-chain, all balances and calculations use RAO, the smallest indivisible unit. The relationship is straightforward: 1 TAO = 1,000,000,000 RAO (109 RAO). This is analogous to Bitcoin and satoshis, or Ether and wei.
Every balance, transfer amount, staking amount, and emission value stored on-chain is
denominated in RAO. When you see a raw balance of 1000000000 in chain storage or an event, that represents exactly 1 TAO. This integer representation avoids
floating-point precision issues, a critical property for a financial system where rounding errors
can compound into real economic impact.
When working with Subtensor data, whether through the API, events, or storage queries, always be aware of whether you're looking at TAO or RAO. The reference section of this site marks balance fields with their conversion formula to help you avoid this common source of confusion.
Supply & Emission Schedule
Bittensor's supply model is deliberately modeled after Bitcoin. The maximum supply is capped at 21 million TAO. New TAO enters circulation through block emissions: a fixed amount of TAO minted with each new block (approximately every 12 seconds). This emission rate is not constant; it halves at regular intervals, gradually reducing the rate at which new TAO is created.
The halving schedule means that early network participants receive higher per-block rewards, while later participants benefit from scarcity as emission rates decline. Each halving approximately doubles the time required to mine the next tranche of supply. The halving schedule produces predictable, disinflationary monetary policy; participants can plan around a known emission curve rather than worrying about arbitrary supply changes.
Block emissions are not distributed equally. They flow through a multi-level system: first split across subnets (weighted by TAO Flow), then within each subnet split between validators and miners (determined by Yuma Consensus). The details of this distribution are covered in Chapter 10: Emissions. See live TAO supply and emission data on the bittensor.ai dTAO dashboard.
Recycling & Burning
Not all TAO that leaves wallets goes to other wallets. Several network operations burn TAO, permanently removing it from circulation. The most significant burn mechanism is registration burns: when a miner or validator pays TAO to register on a subnet, that TAO is destroyed. It doesn't go to the subnet owner or to any participant; it's gone.
Burning creates deflationary pressure that partially counterbalances emissions. During periods of high network activity (many new registrations, subnets being created), more TAO is burned, reducing the effective inflation rate. In theory, if registration activity is high enough, the network could even become temporarily deflationary (more TAO burned than emitted per block).
Some burned TAO is recycled rather than destroyed outright. Recycled TAO is returned to the emission pool, meaning it will be re-emitted in future blocks. This mechanism ensures that the total amount of TAO that will ever be emitted remains at 21 million, while the burn-and-recycle flow creates a dynamic equilibrium between network usage costs and participant rewards.