Decentralized Long-Only Spot Margin Protocol for the Bittensor Network
Tenexium operates as a spot margin protocol within the Bittensor ecosystem, serving as the core infrastructure for the Tenex subnet. The protocol enables users to establish leveraged long positions on subnet tokens using TAO as collateral, while providing TAO liquidity providers with sustainable yields through both Bittensor miner emissions and protocol-generated fees from trading, borrowing, and liquidations.
- TAO-Only Liquidity Pool: Liquidity providers supply TAO exclusively, earning both miner emissions and protocol fee shares without direct alpha volatility exposure
- Long-Only Design: Deliberately prohibits short positions to prevent artificial sell pressure in dTAO markets
- Tiered Leverage System: Maximum leverage (up to 10×) determined by Tenex alpha token holdings with on-chain enforcement
- Dynamic Fee Structure: Trading and borrowing fees adjust based on utilization rates with tier-based discounts
- Automated Buyback Program: A defined share of protocol fees fund programmatic buybacks to support Tenex alpha token demand
- Circuit Breaker Protection: Multiple safety mechanisms including rate limiting, utilization caps, and emergency controls
-
Liquidity Providers deposit TAO into the protocol and earn:
- Bittensor miner emissions
- Share of trading, borrowing, and liquidation fees
-
Traders can:
- Deposit TAO as collateral
- Borrow additional TAO against their position
- Execute leveraged long positions on alpha tokens
- Benefit from tier-based fee discounts and higher leverage limits
-
Protocol automatically:
- Maintains TAO liquidity for sustainable borrowing
- Manages liquidations and risk parameters
- Routes fees to buyback pool for Tenex alpha support
contracts/
├── core/
│ ├── TenexiumProtocol.sol # Main protocol contract
│ ├── TenexiumStorage.sol # Persistent state storage
│ └── TenexiumEvents.sol # Event definitions
├── modules/
│ ├── PositionManager.sol # Position lifecycle management
│ ├── LiquidityManager.sol # LP operations & rewards
│ ├── FeeManager.sol # Fee collection & distribution
│ ├── BuybackManager.sol # Automated buybacks → burn
│ ├── LiquidationManager.sol # Liquidation manager
│ ├── InsuranceManager.sol # LP loss insurance manager
│ ├── SubnetManager.sol # EVM validator manager
│ └── PrecompileAdapter.sol # Bittensor precompile adapter
├── interfaces/
│ ├── IAlpha.sol # Alpha token interface
│ ├── IStaking.sol # Staking interface
│ ├── INeuron.sol # Neuron interface
│ ├── IMetagraph.sol # Metagraph interface
│ ├── ICrowdloan.sol # Crowdloan interface
│ ├── IInsuranceManager # Insurance interface
│ └── IAddressConversion # Address conversion interface
├── libraries/
│ ├── AlphaMath.sol # Mathematical operations for alpha calculations
│ ├── AddressConversion.sol # H160 → SS58 address conversion
│ └── TenexiumErrors.sol # Custom error definitions
└── governance/
└── MultiSigWallet.sol # Multisig governance
- UUPS Upgradeable: Proxy pattern for seamless contract upgrades
- Modular Architecture: Separated concerns for maintainability and security
- Bittensor Integration: Native integration with Bittensor precompiles for staking and other operations
- Multi-Role Access: Owner, LPs, traders, and liquidators with appropriate permissions
- User deposits TAO collateral
- Protocol validates tier and leverage limits
- User borrows additional TAO (up to leverage limit)
- Protocol executes alpha token purchase on behalf of user
- Position is recorded with health ratio monitoring
Health Ratio = (Collateral Value + Alpha Position Value) / Borrowed TAO Value
- Maintenance Margin: 110% (positions liquidated below this threshold)
- Liquidation Penalty: Additional 2% fee on liquidated collateral
- Utilization Cap: Borrowing disabled when utilization > 90%
- Rate Limiting: LP operations limited to prevent flash attacks
- Emergency Pause: Owner can pause all operations in extreme scenarios
- Health ratio < 110%
- Position becomes underwater due to price movements
- Automatic execution by liquidator bots
- Liquidator identifies underwater position
- Protocol validates liquidation conditions
- Liquidator receives 40% of liquidation fee
- Remaining collateral returned to user (minus fees)
- Borrowed TAO returned to liquidity pool
- Fee Share: 40% of liquidation penalty
- Reward Pool: Separate reward mechanism for active liquidators
- Base Rate: 0.3% per trade (tier-discounted)
- Payment: Deducted from acquired alpha tokens
- Timing: Applied immediately on position open/close
- Base Rate: 0.005% per 360 blocks (dynamic based on utilization)
- Utilization-Kinked Model:
- Kink Point: 80% utilization
- Below Kink (0-80%): Gradual increase from base rate to 0.02% per 360 blocks
- Above Kink (80%+): Steeper increase from 0.02% to maximum rates
- Payment: Settled when position is closed or liquidated
- Timing: Accrued continuously in real-time, calculated on position updates or closure
- Rate: 2% fixed (paid by liquidated position)
- Payment: Distributed to liquidators and protocol
- Timing: Applied immediately upon liquidation execution
| Fee Type | Liquidity Providers | Liquidators | Protocol |
|---|---|---|---|
| Trading | 30% | 0% | 70% |
| Borrowing | 35% | 0% | 65% |
| Liquidation | 0% | 40% | 60% |
Eligible Tenex alpha holders receive tier-based fee discounts and higher maximum leverage limits.
| Tier | Token Threshold | Max Leverage | Fee Discount |
|---|---|---|---|
| 0 | 0 | 2× | 0% |
| 1 | 100 | 3× | 10% |
| 2 | 1,000 | 4× | 20% |
| 3 | 2,000 | 5× | 30% |
| 4 | 5,000 | 7× | 40% |
| 5 | 10,000 | 10× | 50% |
Note: Maximum leverage is enforced at position open and cannot exceed the user's tier cap.
Crowdloans will be offered only occasionally, and early participants receive permanent benefits.
| Contributed TAO | Max Leverage | Fee Discount |
|---|---|---|
| 1 | 2× | 2% |
| 2 | 2× | 4% |
| 3 | 3× | 6% |
| 4 | 4× | 8% |
| 5 | 5× | 10% |
| 6 | 5× | 12% |
| 7 | 7× | 14% |
| 8 | 7× | 16% |
| 9 | 7× | 18% |
| 10 | 10× | 20% |
Note: Fee discounts are cumulative; they stack instead of replacing each other.
- 60% of total protocol revenue (comes from protocol fees)
- Execution Threshold: Buybacks trigger when buyback pool >
buybackExecutionThreshold - Execution Interval: Automated execution every
buybackIntervalBlocks - Burning: Purchased tokens are immediately 100% burned
- Backing Asset: 100% TAO collateral
- Yield Sources:
- Miner emissions
- Protocol fee share (30-35% of all fees)
- Impermanent loss protection (long-only design)
- Utility: Tier determination and fee discounts
- Demand Drivers:
- Automated buyback program
- Governance participation
- Future utility expansion
- LP Rewards: Allocated pro rata to TAO liquidity provided
- Liquidator Rewards: Performance-based with minimum activity thresholds
- Buyback Allocation: 60% of protocol fees directed to token purchases and burn
The Hashlock audit is complete.
Audit link: https://hashlock.com/audits/tenexium
- UUPS Upgradeable: Proxy pattern with secure upgrade mechanisms
- Access Control: Multi-role permissions with Ownable and custom modifiers
- Reentrancy Protection: OpenZeppelin ReentrancyGuard on all external functions
- Input Validation: Comprehensive parameter validation and bounds checking
- Circuit Breakers: Multiple emergency stop mechanisms
- Rate Limiting: Anti-flash attack protection on LP operations
- Slippage Controls: Maximum slippage limits on interactions
- Conservative Parameters: Initial deployment with conservative risk settings
Protocol upgrades and parameter changes are controlled by a multisig, not by a single key.
- The core contracts are owned by a multisig wallet.
- The multisig requires N-of-M approvals (e.g. 3 of 5 signers) before any action can execute.
- No single signer can upgrade logic or change parameters alone.
- Multisig actions have a 48-hour timelock.
- Approve contract upgrades / deployments.
- Update protocol config (fees, LTV thresholds, liquidation settings, etc.).
- Execute governance actions after the timelock expires.
- Bittensor Network Stability: Protocol operations depend on Bittensor network uptime and consensus
- Precompile Reliability: Price feeds and staking operations rely on Bittensor precompile functionality
- Liquidity Risk: Insufficient TAO liquidity could impact borrowing
- Volatility Risk: Extreme alpha price movements could trigger liquidations
git clone https://github.com/Tenexium/tenex-subnet
cd tenex-subnet/scripts
python3 -m venv venv
source venv/bin/activate
pip install -r requirements.txtUse the CLI to associate your hotkey and manage liquidity; no separate miner daemon is required.
Step 1. Configure environment variables.
cp .env.example .envEdit .env and set:
# Private key for the EVM wallet you'll use for TAO deposits
MINER_ETH_PRIVATE_KEY=your_evm_private_key_here
# Public key (hex) of your registered miner hotkey
MINER_HOTKEY=your_miner_hotkey_public_key_here
# network name for subtensor EVM (default=mainnet)
NETWORK=mainnetNote: To create an EVM wallet and export its private key, see the EVM mainnet with Metamask wallet guide.
Note: To get your miner hotkey public key, enter your hotkey (SS58) address in the Snow Address Converter App and copy the public key.
Step 2. Associate your EVM address with your hotkey.
python3 tenex.py associateStep 3. Add or remove liquidity.
python3 tenex.py addliq --amount <amount>python3 tenex.py removeliq --amount <amount>View protocol and miner stats:
python3 tenex.py showstats-
Deploy your validator contract (identical to
SubnetManager.sol) and register to the subnet with its H160 address. -
Copy
.env.exampleto.envand edit the following variables:VALIDATOR_ETH_PRIVATE_KEY: private key of your validator contractWEIGHT_UPDATE_INTERVAL_BLOCKS: number of blocks between weight updates (default=100)NETWORK: network name for Subtensor EVM (default=mainnet)
-
Start the validator process:
python3 evm_validator.py-
Copy
.env.exampleto.envand edit the following variables:WEIGHT_UPDATE_INTERVAL_BLOCKS: number of blocks between weight updates (default=100)NETWORK: network name for Subtensor EVM (default=mainnet)NET_UID: subnet uid (default=67)ENDPOINT: subtensor endpoint to which you will connect (default=wss://entrypoint-finney.opentensor.ai:443)WALLET_PATH: path where your wallets are stored (default=~/.bittensor/wallets/)WALLET_NAME: name of your coldkey (default=tenex)WALLET_HOTKEY: name of your hotkey (default=validators)
-
Start the validator process:
python3 validator.pyUsers can open/close long positions and add collateral via the position management functions: openPosition(), closePosition() and addCollateral().
Alternatively, use the CLI (coming soon):
tenex open --address <wallet_address> --amount <tao_amount> --netuid <netuid> --leverage <leverage> --slippage <slippage>tenex close --address <wallet_address> --amount <tao_amount> --netuid <netuid> --slippage <slippage>tenex add --address <wallet_address> --amount <tao_amount> --netuid <netuid>// Open a leveraged position
function openPosition(
uint16 alphaNetuid,
uint256 leverage,
uint256 maxSlippage
) external payable
// Close a position
function closePosition(
uint256 positionId,
uint256 amountToClose,
uint256 maxSlippage
) external
// Add collateral to position
function addCollateral(uint256 positionId) external payable// Add liquidity
function addLiquidity() external payable
// Remove liquidity
function removeLiquidity(uint256 amount) external
// Claim LP rewards
function claimLpFeeRewards() external returns (uint256 rewards)Tenexium is licensed under the MIT License - see the LICENSE file for details.
Leveraged trading is risky and can exceed your initial investment. Tenexium is provided “as is” with no warranties. Do your own research, understand the risks, and comply with applicable laws in your jurisdiction.
Built with ❤️ by the Tenexium Team