07 / 14PROPOSEDA design; nothing here is deployed
TAO reserve policy
Two reserve models were considered, and they promise different things. Mixing them would make promises the contracts could not keep, so this record picks one for the first version.
| Model A: Reserve growth | Model B: Staker entitlement | |
|---|---|---|
| User promise | TAO stays under protocol control and strengthens operations, routing incentives, integrations, liquidity or future governance. | TAO creates an enforceable, proportional entitlement for eligible TAON stakers. |
| Contract complexity | A controlled vault with bounded spending rules. | Staking, a reward index, per-holder accounting and a claim contract. |
| Solvency obligation | None to individuals: the reserve owes no one a share. | Every accrued entitlement must stay backed; a shortfall is a broken promise. |
| Accounting | Inflows, outflows and holdings, published. | All of that, plus every holder’s accrual, to the smallest unit, forever. |
| Regulatory sensitivity | Lower: no individual expectation of a share. | Higher: a pro-rata claim on an asset pool from holding a token. |
| Security | Custody, spending limits, a timelock on changes. | All of that, plus index arithmetic, claim reentrancy and partial-claim behaviour under shortfall. |
| Governance risk | Who approves spending, and how fast. | The same, plus any change to accrual rules affects everyone’s claim. |
| Audit scope | One vault and its controls. | Vault, staking, index and claims, and how they interact. |
PROPOSED Recorded 2026-09-23. For the first deployed version: Model A, Reserve growth.
Reserve growth creates fewer liabilities and is easier to verify: no per-holder solvency obligation, no claim contract, and a smaller audit scope. Version one has no staking, claims or holder yield. Any holder entitlement would need its own design, audit and governance decision, and none is proposed.
What this changes
- No surface describes TAON staking as earning TAO, and no surface shows an entitlement.
- Earlier research modelled a staker-entitlement reserve in detail. That work is kept as research, classified as a design for a possible later version, and shown nowhere in the product.
- A reserve would hold TAO for the ecosystem: routing incentives, integrations, liquidity, operations and, later, governance. Each use would be an allocation category, published with its own accounting.
If a reserve ever exists, every outflow would belong to a named category, approved in the open and behind a delay. A provider-growth allocation could be one, but only under an explicit written agreement that defines custody, ownership, accounting and withdrawal rights. No such allocation has been proposed to, or agreed with, any provider, and none exists. Provider costs are costs, never reserve contributions.
- Charged product revenue, or a live market fee, that produces eligible surplus.
- A written custody design and a governance authority with a timelock.
- A vault contract, fork-tested, and an independent audit.
- A public, reproducible accounting of every TAO in and out.
Applied to each revenue source separately, and published per period. The team and treasury share funds the work; the TAO reserve is a separate balance that is never drawn for pay.
| Use (PROPOSED) | Share |
|---|---|
| TAO reserve | 50% |
| Operations and provider costs | 15% |
| Team and treasury | 15% |
| Security and audits | 10% |
| Liquidity | 10% |
Conversion to TAO would be manual, two-person, reviewed weekly, with a minimum of $250; a week with no purchase is still published. The reserve asset would be the verified bridged TAO on Robinhood Chain, unless legal and technical review finds a better route.
Every state on this page matches Status. Where they ever differ, Status is right and this page is a defect.