# Root dividend price-gate calibration (/docs/research/root-dividend-price-gate) # Root dividend price-gate calibration [#root-dividend-price-gate-calibration] ## Decision [#decision] Replace the requirement that every held subnet is within 2% of its fast EMA with a **0.1% basket NAV impact budget** for out-of-band holdings. Keep a separate **2% gross incoming-value budget** and **2% combined mint-ratio budget**. The incoming-value check anchors all origins, including those inside the 2% band; opposing origin moves cannot cancel each other out. Deferred payouts additionally require each origin independently to satisfy the 2% incoming-value budget, so a large healthy payout cannot conceal another claimant group's mispriced payout. This implements the basket-weighted proposal without claiming that a 0.1% NAV limit guarantees a 0.1% limit on the number of newly minted shares. The latter also depends on the incoming dividends' valuation. ## Mainnet sample [#mainnet-sample] Read-only archive RPC: `https://archive.sub.latent.to`. The sample covers blocks **9,442,681–9,467,881**, every 420 blocks (61 timestamps), with basket quantities frozen at block **9,468,000**. There are **51 baskets with at least 100 holdings**, giving **3,111 basket/timestamp observations**. The block interval is about 84 minutes at 12 seconds/block. Every sample's block hash and results are recorded in [the compact evidence](root-dividend-price-gate-mainnet.json). | Holding-price admission rule | All large baskets | Taostats | | ---------------------------- | ----------------: | -------: | | All holdings within 2% | 1.74% | 1.64% | | Net impact within 0.05% | 33.33% | 31.15% | | Net impact within 0.10% | 56.48% | 63.93% | | Net impact within 0.15% | 67.89% | 70.49% | | Net impact within 0.25% | 83.83% | 81.97% | | Net impact within 0.50% | 97.11% | 96.72% | 0.1% raises denominator admission from 33% to 56%, while 0.15% and above allow progressively larger NAV discrepancies. This is a policy tradeoff supported by the observed curve, not an economically optimal threshold proved by the sample. These percentages are **denominator eligibility estimates, not deposit counts**. The study holds basket quantities fixed and uses historical spot prices; it does not replay the historical holdings, queue, validator scheduler, claimant changes, or the runtime's realizable marginal quotes. The production incoming and joint checks may reject some denominator-eligible batches. The observations are correlated, and are not an independent statistical sample or an APY forecast. Missing anchors are excluded rather than treated as passing (none were missing in this post-488 sample). This does not reproduce the author's 30-day study. ## The reported Taostats example [#the-reported-taostats-example] At block **9,448,000**, hash `0x386f3e2fba2778091871a1c4a2c932b724e3c7db5dba7a033f8f3ee48812746f`, the basket hotkey is `5GKH9FPPnWSUoeeTJp19wVtd84XqFW4pyK2ijV2GsFbhTrP1`. Its **6,178,568,439,438 shares** exactly match the Taostats report; realizable NAV is **5,201.946135239 TAO**, with 128 holdings and 15 out-of-band prices. The independently calculated spot-weighted net impact is about **+0.080%**, close to the report's +0.073% (the report uses an earlier snapshot's weights). The 0.05% denominator gate rejects this state; 0.1% admits it. This does not mean the whole queued batch has a mint error below 0.1%: it includes incoming dividends from volatile origins as well as the report's hypothetical stable SN28 dividend. Using the runtime's realizable holdings gives **+0.0783%** NAV impact. The spot proxy for the actual incoming queue gives **1.691% gross incoming impact** and **-0.1646% combined mint-ratio impact**; these fit the separate 2% budgets. At block **9,468,000**, Taostats instead has **-0.1907%** realizable NAV impact, so the proposed NAV gate still defers settlement despite its smaller incoming impact. This is intentional: the policy permits small weighted discrepancies, not unconditional settlement. Point-in-time queue and incoming-value results are retained in [the point evidence](root-dividend-price-gate-taostats.json). Source proposal: [Taostats runtime 488 price-gate analysis](https://s3.hippius.com/rufus/public/root-dividend-flush-price-gate.html). ## Runtime calculation and limits [#runtime-calculation-and-limits] The existing realizable NAV sweep supplies each holding's value `v`. Outside the existing 2% spot/fast band, its admission reference is `floor(v * fast / spot)`; inside the band it remains `v`. Root cash, fixed-price mechanisms, and dissolving subnets retain their existing treatment. Missing or zero price anchors reject nonzero dynamic values. Terminal zero-value rows do not pin the batch. The already-computed marginal value of each incoming credit is rebased to its fast anchor for the incoming reference. This preserves its live liquidity discount without extra swap simulations. It is an oracle-based admission reference, not a counterfactual replay of a different AMM or a fair-price oracle. Admission requires: 1. `abs(N_live - N_ref) / N_ref <= 0.1%`. 2. `sum(abs(B_i_live - B_i_ref)) / sum(B_i_ref) <= 2%`. 3. When pricing outstanding shares, the deviation of `B_live / N_live` from `B_ref / N_ref` is at most 2%. Before these batch checks, each deferred origin must independently satisfy `abs(B_i_live - B_i_ref) / B_i_ref <= 2%`. Failure rolls back and requeues that origin alone, preserving its historical claimants' alpha rights; other origins can still settle subject to the batch checks. The reference is computed once inside the existing isolated credit transaction and reused by the batch checks. Consequently, the point example's aggregate incoming figures do not establish that every deferred origin would settle. A deferred credit with zero realizable marginal value is also requeued inside its isolated transaction. Equal positive before/after quotes can result from integer rounding or a price-limit-clamped quote; they do not establish that the alpha is worthless. Terminal `None` quotes retain their existing recycling behavior. This check adds no price reads or swap simulations. The third condition also bounds the ordinary mint with unminted escrow yield: adding a nonnegative yield term to the denominator dampens the relative ratio error. The initial par mint is covered by the incoming-value check. Empty/zero NAV handling and actual mint math retain their existing rules. Accepted deposits **still use live realizable values on both sides**. No alpha is swapped during accumulation. A rejected batch rolls back tentative credits, share changes, and deferred conversions, and returns the credits to the queue. No dispatchable, storage schema, fee/gas baseline, or measured weight changes are introduced; the existing quote envelope covers the same NAV sweep and per-origin simulations. No spec-version bump is included on top of release-489. ## Reproduction [#reproduction] Install the repository's `ts-tests` dependencies, then run: ```sh BASKET_RESEARCH_RPC=https://archive.sub.latent.to \ BASKET_RESEARCH_START=9442681 BASKET_RESEARCH_END=9468000 \ BASKET_RESEARCH_STEP=420 BASKET_RESEARCH_OUTPUT=/tmp/basket-gate-mainnet.json \ node scripts/analyze-root-dividend-gate.cjs ``` Use `BASKET_RESEARCH_POINT=9448000` and `BASKET_RESEARCH_HOTKEY=5GKH9FPPnWSUoeeTJp19wVtd84XqFW4pyK2ijV2GsFbhTrP1` for the actual point-in-time basket and pending credits. Incoming-value figures in this read-only tool use spot marks; only the point's NAV comparison uses the runtime's realizable holdings. They must not be presented as an exact runtime mint replay. Public archive availability and rate limits can vary. ## Verification [#verification] The full local preflight passes with the zero-marginal-credit guard: **2,061 pallet tests passed**, 9 ignored, plus 7 ignored documentation tests. It includes both workspace Clippy modes, runtime fee/claim-root tests, a release node build, SDK metadata drift and coverage/name checks, Zepter, Rust CI path checks, generated-doc drift, and formatting. The final run disables incremental compilation after clearing a stale pallet build cache that caused a local linker failure; no source or baseline change was needed for that failure. The initial weighted-gate implementation also passed workspace nextest: **4,275 passed**, 16 skipped (one test reported a leaked subprocess). The new protected regression reproduces a tiny volatile holding blocking an otherwise healthy dividend, and verifies settlement followed by a claim that increases actual root stake by the earned dividend. It fails with the original all-holdings price gate restored and passes with the weighted gate. Existing protected tests are unchanged. Arithmetic tests cover limits, large values, opposing origin moves, and the combined numerator/denominator check. A second protected regression reproduces an exited claimant's origin losing 99% of its price while a different claimant's healthy dividend makes the batch error less than 1%. It fails without the individual-origin guard. With the guard, the healthy dividend settles, the depressed origin remains pending, and its original claimant recovers at least 99% of the dividend's restored value as actual root stake after price recovery, without a second payout on a repeated claim. A third protected regression covers both rounded and price-limit-clamped zero marginal credits against a positive existing holding, alongside a healthy origin. Both variants reproduce loss of the deferred entitlement before the guard. With the guard, the healthy origin settles while the original alpha remains pending; after price recovery its historical claimant receives at least 99% of the restored marginal value as actual root stake, with no duplicate payout. The RustSec database also reports **RUSTSEC-2026-0459** for Frontier's `sqlx -> libsqlite3-sys 0.30.1`, present on release-489 independently of this change. The advisory does not apply to the default key-value backend or the runtime WASM; the node's optional SQL backend and its narrower exposure are described below. ### Applicability of the SQLite advisory [#applicability-of-the-sqlite-advisory] [RUSTSEC-2026-0459](https://rustsec.org/advisories/RUSTSEC-2026-0459.html) is **not applicable to Subtensor's default key-value backend**. In `node/src/ethereum.rs`, `BackendType::KeyValue` is the default and the CLI uses that default. In `node/src/service.rs`, only the separate `BackendType::Sql` branch opens SQLite. The dependency is host-side Frontier indexing code, not part of the runtime WASM. Compiling SQL support explains the audit finding; it does not mean that SQLite is used by the running node. The advisory requires opening a crafted database together with a companion WAL file whose page size differs. Exposure is conditional on an operator explicitly selecting `--frontier-backend-type sql` and opening database/WAL files supplied by a less trusted party. That path opens `sql/frontier.db3` under the node's data directory. The default key-value path never opens that SQLite database. The [node operation guide](/docs/guides/running-a-node) recommends explicitly selecting `--frontier-backend-type key-value`. Release 489 retains `skip-cargo-audit` under the maintainer's explicit policy in `../AGENTS-subtensor.md`. No dependency update or additional advisory ignore is needed for the default deployment. The SQL dependency remains unpatched for operators who opt into that backend; its eventual upgrade is separate work. A SQLite-only version update is not compatible with the current dependency constraints: `sqlx-sqlite 0.8.6` requires `libsqlite3-sys ^0.30.1`, while the advisory is patched in `libsqlite3-sys >=0.39.0`. The newer `sqlx-sqlite 0.9.0` still requires a version below 0.38.0 and also raises the Rust requirement to 1.94, above this repository's pinned 1.89 toolchain. The audit job is skipped, not passed, and this applicability analysis does not claim that every optional configuration is unaffected.