Problem Statement

TaoBank is a pioneering lending protocol meticulously designed to unlock liquidity within the Bittensor ecosystem.

Currently, holders of wTAO or other wrapped versions of Bittensor’s native token (TAO) on the Ethereum blockchain are unable to capitalize on the substantial yield opportunities available to TAO holders. TaoBank mitigates this issue by creating staking solutions for wTAO and similar tokens, enabling holders to earn approximately 15% APY on their holdings, akin to TAO holders who delegate their tokens to validators.

Another significant challenge for both wTAO and native TAO token holders is the inability to leverage their digital assets for liquidity without selling them. TaoBank addresses this by allowing TAO holders to use their tokens as collateral to mint TaoBank’s dollar-pegged stablecoin, taoUSD. This stablecoin can be used like any other Ethereum-based stablecoin to participate in DeFi dApps or other revenue-generating opportunities. This system offers dual benefits: it provides immediate liquidity to asset holders while allowing them to retain ownership of their TAO tokens. TaoBank thus bridges the gap between static holding of digital assets and dynamic financial flexibility.

Moreover, TaoBank charges no interest for minting and holding taoUSD. There is only a nominal one-time fee of 0.5% for minting the token, after which holders can utilize the stablecoin indefinitely without paying any interest. The initial collateral (wTAO or other tokens) remains securely locked in the protocol until taoUSD holders choose to redeem their stablecoins to reclaim their collateral.

In the future, TaoBank aims to expand its services to offer Delegate-as-a-Service (DaaS) solutions to TAO holders. When Bittensor updates its protocol to introduce dynamic TAO (dTAO) and other subnet-specific delegating/validating rules, TaoBank will provide TAO holders with a comprehensive solution to optimize their token yield.