🚨$TAO fam, the base APR for $TAO itself is 70%, so there's a risk-free rate here that doesn't change, it's still pretty high. It's also worth noting that if the subnet exchange rates explode, so if they end up going above 1, the consequence actually is that Root's APR increases, because they're cutting out of that price. 

70% Base APR → Risk-Free Rate

This means that just by staking $TAO in Root, you can earn 70% APR without additional risk or exposure to Alpha tokens.

This return is consistent and independent of subnet performance.

Subnet Exchange Rates & Root APR Increase

Each subnet has its own Alpha token, which represents participation in that specific subnet.

Subnet exchange rates determine how much Alpha a given amount of $TAO can buy.

If demand for a subnet grows, its Alpha price rises, meaning it takes more $TAO to acquire Alpha.

When subnet prices go above 1, the system cuts rewards from those subnets and redistributes them to Root stakers, increasing Root APR as a result.