Introducing taʊ, a protocol to synthesize Proof-of-Work assets on the SORA network
- Tau is a new synthetics protocol backed by Bitcoin hashrate via BTCST
- Standard Hashrate Group (“SHG”) is an open platform where prominent miners standardize and tokenize their BTC hashrate; as of Feburary 2021, members of Standard Hashrate Group represent 12% of the global Bitcoin hashrate
- tBitcoin is a new synthetic Bitcoin asset that is backed by Tau
- tBitcoin is planned to become one of the reserve currencies of the SORA token bonding curve, to manage the value of the XOR token
- SORA, SORAMITSU, Standard Hashrate, and Tau will collaborate on building a rebasing EVM bridge for tBitcoin to the SORA network to realize this
The Tau of Satoshi・τ
Synthetic assets often fail to maintain their pegs or require inefficient overcollateralization. The Tau Protocol looks to change all that, by using Bitcoin hashrate as collateral, which has intrinsic and digitally verifiable value. Along with deflationary rebasing and autonomous, open market operations, Tau Protocol aims to predictably maintain the pegs of its synthetic assets. The result is a protocol for creating synthetic assets, with transparency about the value of collateral and governance.
Though in the future Tau plans to support a diverse range of assets, the first asset supported by the Tau protocol will be a synthetic Bitcoin asset, tBitcoin. The goal of this is to provide a synthetic Bitcoin asset, backed by Bitcoin mining (hashrate) to the world of composable DeFi.
The Tau of SORA
SORA is a decentralized world economic system based around the XOR and VAL tokens. The SORA v2 network is home of the Polkaswap DEX and in turn, Polkaswap incorporates a token bonding curve to autonomously manage supply of the XOR token. The SORA token bonding curve uses reserve currencies to buy back and burn XOR that are sold into it if the price is too low, or to mint new XOR if the price is too high. This gives forward-guidance to the XOR price in a completely autonomous and transparent way.
Additionally, SORA acts like a decentralized autonomous organization that uses the margin between buy and sell functions of the token bonding curve to provide for ecosystem development and expansive growth.
Now that tBitcoin is being announced, we are proud to welcome tBitcoin into the list of planned reserved currencies for the SORA token bonding curve! This brings the initial planned assets to:
This is great for XOR because it gives greater asset diversity and decentralized exposure to the intrinsic value of Bitcoin mining. It is also great for tBitcoin and BTCST because it can lead to a huge demand for tBitcoin to underwrite the XOR token. Additionally, tBitcoin and other Tau Protocol synthetic assets can be open for decentralized trading on the Polkaswap DEX.
Technologically, to realize the tBitcoin bridge between EVM-based networks and the SORA Network using Parity Substrate, requires development of a rebasing EVM bridge. This is because Tau Protocol utilizes deflationary rebasing to maintain the pegs of its synthetic assets.
Rebasing means that held asset amounts can either be increased or decreased by the protocol, based on some transparent, on-chain logic. Therefore, for rebased assets to be fully fungible across networks, all networks involved have to follow the same rebasing logic. To our knowledge, the rebasing bridge between SORA and EVM-based networks that will be developed, will be the first bridge of this type in existence, which will open up a whole new class of assets to the SORA Network.
Makoto Takemiya, the Group CEO of SORAMITSU is also joining Tau Protocol as a Scientist. As CEO of SORAMITSU, he works closely with clients such as the National Bank of Cambodia, the Web3 Foundation, and Protocol Labs to create state-of-the-art technology and applications utilizing blockchain, and his advisory role with Tau Protocol will help to guide the overall technological architecture of the designs.
“Bitcoin has bootstrapped itself to become a supranational store of value. However, its network is limited by antiquated technology. Synthetic Bitcoin assets such as tBitcoin using the state-of-the-art Tau Protocol will enable Bitcoin to be used in composable DeFi applications, breathing fresh life into Bitcoin.” Makoto Takemiya, CEO at SORAMITSU
“Mechanisms behind generating and stabilizing synthetic assets are an on-going area of research ripe for practical uses in the quickly expanding world of DeFi. The first implementation of the Tau protocol applies some of the lessons learned from the previous generation of rebasing techniques by including real-world collateral in the form of tBitcoin which creates a credible Schelling point.” Tim Swanson, Creator of the Tau Protocol
The Bitcoin Standard Hashrate token (BTCST) is the first bridge between Bitcoin hashrate and the DeFi world. BTCST is collateralized by Bitcoin’s hashrate, indicating that one BTCST token represents 0.01TH/s of Bitcoin mining power. The mining power is exchanged by the miners on the platform for newly minted BTCST tokens. The application brings liquidity to the bitcoin mining market and the BTCST token aims to allow anyone to participate in mining rewards.
About Standard Hashrate
Standard Hashrate Group (“SHG”) is an open association where prominent miners standardize and tokenize their Bitcoin hashrate. It currently includes Atlas Mining, BTC.TOP, Easy2Mine, Genesis Mining, and Hengjia who collectively generate 12% of the daily Bitcoin hashrate.
About Tau Protocol
The Tau Protocol is a new synthetic asset protocol that uses a rebase technique to stabilize an asset at a target level. The goal of version 1.0 is to synthesize an asset (tAsset) and maintain its target value relative to its facsimile on a different blockchain. To create a credible backstop for complimenting the rebasing process the first implementation utilizes the BTCST hashrate token to synthesize and collateralize tBitcoin. τ is a protocol that harnesses proof-of-work mining to synthesize new assets. By using the mining process, the τ protocol creates synthetic crypto assets with provable backing and strong mechanisms to restore price pegs.
About SORA NEO Network, Polkaswap, and Fearless Wallet
SORA is a new economic system aimed at creating a supranational, world economic system with built-in tools for decentralized finance (DeFi). The SORA network implements a new way of parachain architecture on Polkadot and Kusama network, with the capability to bridge external blockchains (like Ethereum) to the Polkadot ecosystem.
One of the DeFi applications that will run on the SORA network is Polkaswap, a non custodial liquidity aggregating, cross chain AMM DEX designed uniquely for the Polkadot ecosystem with boundless liquidity through its one-of-a-kind Aggregate Liquidity Technology (ALT).
Fearless Wallet is a mobile wallet designed for the decentralized future on the Kusama and Polkadot networks, with support for iOS and Android platforms. An awesome user experience, fast performance, and secure storage for your accounts. Fearless wallet will integrate Polkaswap for easy, decentralized swaps of assets.