Collateral Smart Contract for Bittensor

Purpose: Manage miner collaterals in the Bittensor ecosystem, allowing validators to slash misbehaving miners.

Design: One collateral contract per validator and subnet.

Overview

This contract creates a trust-minimized interaction between miners and validators in the Bittensor ecosystem. One contract per validator per subnet ensures clear accountability for each validator's collateral pool.

• Miners Lock Collateral

  Miners demonstrate their commitment by staking collateral into the validator's contract.

• Collateral-Based Prioritization

  Validators may choose to favor miners with higher collateral when assigning tasks, incentivizing greater stakes for reliable performance.

• Arbitrary Slashing

  Validators can penalize a misbehaving miner by slashing any portion of the miner's collateral.

• Automatic Release

  If a validator does not respond to a miner's reclaim request within a configured deadline, the miner can reclaim their stake, preventing indefinite lock-ups.

• Trustless & Auditable

  All operations (deposits, reclaims, slashes) are publicly logged on-chain, enabling transparent oversight for both validators and miners.

• Off-Chain Justifications

  Functions slashCollateral, reclaimCollateral, and denyReclaim include URL fields (and content MD5 checksums) to reference off-chain explanations or evidence for each action, ensuring decisions are transparent and auditable.

• Configurable Minimum Bond & Decision Deadline

  Defines a minimum stake requirement and a strict timeline for validator responses.

Important Notice on Addressing

This contract uses H160 (Ethereum) addresses for both miner and validator identities.

• Before interacting with the contract (depositing, slashing, reclaiming, etc.), all parties must have an Ethereum wallet (including a plain text private key) to sign the required transactions.
• An association between these H160 wallet addresses and the respective SS58 hotkeys (used in Bittensor) is strongly recommended so validators can reliably identify miners.
• Best practices for managing and verifying these address associations are still under development within the broader Bittensor ecosystem, but Subtensor is now able to associate H160 with an UID

Transaction Fees

All on-chain actions (deposits, slashes, reclaims, etc.) consume gas, so both miners and validators must hold enough TAO in their Ethereum (H160) wallets to cover transaction fees.

• Make sure to keep a sufficient balance to handle any deposits, reclaims, or slashes you need to perform.
• Convert H160 to SS58 (scripts/h160_to_ss58.py to transfer TAO to it.
• You can transfer TAO back to your SS58 wallet when no more contract interactions are required. See scripts/send_to_ss58_precompile.py.

Demo

Collateral Smart Contract Lifecycle

Below is a typical sequence for integrating and using this collateral contract within a Bittensor subnet:

• Subnet Integration

  • The subnet owner updates validator software to prioritize miners with higher collateral when assigning tasks.
  • Validators adopt this updated code and prepare to enforce collateral requirements.

• Validator Deployment

  • The validator creates an Ethereum (H160) wallet, links it to their hotkey, and funds it with enough TAO to cover transaction fees.
  • The validator deploys the contract, requiring participating miners to stake collateral.
  • The validator publishes the contract address on-chain, allowing miners to discover and verify it.
  • Once ready, the validator enables collateral-required mode and prioritizes miners based on their locked amounts.

• Miner Deposit

  • Each miner creates an Ethereum (H160) wallet, links it to their hotkey, and funds it with enough TAO for transaction fees.
  • Miners retrieve the validator's contract address from the chain or another trusted source.
  • They verify the contract is indeed associated with the intended validator.
  • Upon confirmation, miners deposit collateral by calling the contract's deposit() function.

• Slashing Misbehaving Miners

  • If a miner is found violating subnet rules (e.g., returning invalid responses), the validator calls slashCollateral() to penalize the miner by reducing their staked amount.

• Reclaiming Collateral

  • When miners wish to withdraw their stake, they initiate a reclaim by calling reclaimCollateral().
  • If the validator does not deny the request before the deadline, miners (or anyone) can finalize it using finalizeReclaim(), thus unlocking and returning the collateral.

Usage Guides

Below are step-by-step instructions tailored to miners, validators, and subnet owners. Refer to the repository's scripts/ folder for sample implementations and helper scripts.

As a Miner, you can:

• Deposit Collateral If you plan to stake for multiple validators, simply repeat these steps for each one:

  • Obtain the validator's contract address (usually via tools provided by the subnet owner).
  • Verify that code deployed at the address is indeed the collateral smart contract, the trustee and netuid kept inside are as expected - see scripts/verify_contract.py.
  • Run scripts/deposit_collateral.py to initiate the deposit transaction with your specified amount of $TAO.
  • Confirm on-chain that your collateral has been successfully locked for that validator - scripts/get_miners_collateral.py

• Reclaim Collateral

  • Initiate the reclaim process by running scripts/reclaim_collateral.py with your desired withdrawal amount.
  • Wait for the validator's response or for the configured inactivity timeout to pass.
  • If the validator does not deny your request by the deadline, run scripts/finalize_reclaim.py to unlock and retrieve your collateral.
  • Verify on-chain that your balance has been updated accordingly.

As a Validator, you can:

• Deploy the Contract

  • Install Foundry.
  • Clone this repository.
  • Compile and deploy the contract, use deploy.sh with your details as arguments.
  • Record the deployed contract address and publish it via a subnet-owner-provided tool so that miners can discover and verify it.

• Enable Regular Operation

  • Enable the deployed contract address in your validator's code (provided by the subnet owner), so that
    • task assignment prioritizes miners with higher collateral balances.
    • misbehaviour checks causing slashing are automated.

• Monitor Activity

  • Use Ethereum JSON-RPC API or a blockchain explorer to view events (Deposit, ReclaimProcessStarted, Slashed, Reclaimed).
  • Query contract mappings (collaterals, reclaims) to check staked amounts and pending reclaim requests.
  • Maintain a local script or UI to stay updated on changes in miner collateral.

• Manually Deny a Reclaim

  • Identify the relevant reclaimRequestId (from ReclaimProcessStarted event, for example).
  • Use scripts/deny_reclaim.py (calling the contract's denyReclaim(reclaimRequestId)) before the deadline.
  • Verify on-chain that the reclaim request is removed and the miner's hasPendingReclaim is reset to false.

• Manually Slash Collateral

  • Confirm miner misconduct based on subnetwork rules (e.g., invalid blocks, spam, protocol violations).
  • Use scripts/slash_collateral.py (calling the contract's slashCollateral(miner, slashAmount)) to penalize the miner by reducing their staked amount.
  • Verify the transaction on-chain and confirm the miner's collaterals[miner] value has changed.

As a Subnet Owner, you can

• Provide Deployment Tools for Validators

  Offer a script to help validators:

  • Create H160 wallet & assosiate it with their SS58.
  • Transfer Tao.
  • Deploy the contract.
  • Publish the resulting contract address (e.g., as a knowledge commitment) so miners can easily verify and deposit collateral.

• Provide Tools for Miners

  Offer a script that retrieves a list of active validator contract addresses from your on-chain registry or other trusted source. This helps miners discover the correct contract for depositing collateral.

• Track Miner Collateral Usage

  • Query each validator's contract (using, for example, a script based on scripts/get_collaterals.py) to see how much collateral is staked by each miner.
  • Aggregate this data into a subnet-wide dashboard for real-time oversight of miner participation.

• Facilitate Result-Based Slashing

  Provide validators with automated checks that periodically verify a small subset (e.g., 1–2%) of the miner's submissions. If a miner's responses fall below the desired quality threshold, the code should call slashCollateral() to penalize substandard performance. For example, in the ComputeHorde SDK, slashing is triggered via the report_cheated_job() method.

• Facilitate Collateral Verification

  Provide validator code that checks each miner's staked amount before assigning tasks. This code can:

  • Prioritize miners who have staked more collateral.
  • Reject miners who do not meet a minimum collateral requirement.

  By coupling task assignment with the collateral balance, the subnetwork ensures more consistent performance and discourages low-quality or malicious contributions.