The product offered by Subnet 112 is a ‘Distributed DEX Aggregator & Swap Intent Solver Engine’. This engine operates on a sophisticated batch auction system, meticulously designed to find the most optimal paths for cryptocurrency swaps across the DeFi landscape.

High-Level Operational Flow:

1. Ingestion: The process begins when users submit signed swap intents to the network’s validators. These intents are comprehensive, detailing critical parameters such as the `minOut` (minimum acceptable output amount), acceptable slippage tolerance, and a transaction deadline. Users retain control, with the ability to cancel or replace their orders and monitor execution status via dedicated APIs and data streams.

2. Batch Epochs: Validators play a crucial role by organizing these incoming swap intents into short, discrete auction windows, typically lasting around 30 seconds. The duration of these epochs can vary depending on the target blockchain, serving as the competitive arena for network solvers.

3. Solver Competition: Miners, acting as solvers within the network, retrieve a snapshot of the current batch of intents. Their task is to compute candidate settlements that maximize user surplus while strictly adhering to all specified constraints. These optimized solutions are then submitted as bids to the validators.

4. Scoring and Selection: Validators rigorously score these submitted bids using a deterministic process based on several criteria:

• Primary Criterion: User surplus, ensuring that the `minOut` is respected and that solutions offering a higher effective price are prioritized.
• Secondary Criteria: The correctness of the solution, the gas efficiency of the proposed transaction, and the associated revert risk.
• Tertiary Criterion: Contribution to protocol fees, which serves as a tie-breaker and is never prioritized over user surplus.

Following this comprehensive evaluation, the validator network selects the winning solution.

5. Attestation and Settlement: Once a winning solution is identified, validators collectively co-sign the bundle. An executor, which can be either a validator or a designated third party, then submits this attested bundle on-chain within the defined auction window. Before any tokens are moved, the settlement contracts meticulously verify all conditions, including per-intent bounds and user signatures.

6. Fees and Payouts: In the operational phase where fees are active, the winning solver/miner receives solver fees directly from the swaps. These fees are typically expressed in the buy tokens resulting from the optimization deltas. Miners also continue to earn emissions. The routing and splitting of these fees are strictly enforced by the settlement contracts.

Key Roles and Components within the Product/Build:

Users and Applications: These are the end-users and client applications that interact with the subnet. They are responsible for submitting signed swap intents, managing their orders (cancellation, replacement), and monitoring the execution status via APIs or data streams.

Miners (Ingress and Availability): Miners are the computational backbone of the subnet. Their tasks include executing quotes, computing optimal settlement candidates, and competing to provide the best possible trade optimization. They are equipped to utilize various liquidity sources, such as direct matches, Automated Market Makers (AMMs), Request for Quote (RFQ) systems, Market Makers (MMs), and other aggregators. Their compensation comes from solver fees on target chains (paid in buy tokens) and emissions, which are performance-based.

Validators (Canonical State and Attestation): Validators maintain the integrity and functionality of the subnet. Their responsibilities encompass collecting quotes and swap orders through distributed APIs, computing and publishing batches of intents, collecting and benchmarking solutions from miners, co-signing the optimal solution, and ensuring its on-chain execution.

Settlement Contracts: These are smart contracts deployed on the target blockchains. They are critical for verifying the legitimacy and constraints of each transaction, including user signatures, order expiries, time-in-force rules, partial-fill rules, minimum notional values, price bounds (`minOut`/slippage), snapshot binding, and validator quorum attestations. Tokens are only moved once all these checks pass.

Solver Capabilities:

Minotaur’s solvers are designed with advanced capabilities to ensure efficient and user-centric trade execution:

• Direct Matching: Solvers can directly match opposing swap intents when buyers and sellers align, facilitating efficient peer-to-peer like transactions.
• Routing: For intents that cannot be directly matched, solvers can route orders through various external liquidity sources, including AMMs, RFQs, and other aggregators, to ensure optimal fill rates.
• Internal Arbitrage: While primarily focused on user outcomes, internal arbitrage legs are permitted only if they demonstrably improve the user’s final trade result.

Technical Architecture

Minotaur operates as a Distributed DEX Aggregator & Swap Intent Solver Engine within the Bittensor framework. Its architecture is built around a batch auction system designed to optimize swap intent processing and execution.

Key Components and Their Interactions:

Users and Applications: Initiate the process by submitting signed swap intents to validators. These intents include critical parameters such as `minOut` (minimum output amount), slippage tolerance, and transaction deadlines. Users can also cancel, replace orders, and monitor fills via APIs or data streams.

Miners (Ingress and Availability): These are the solvers in the network. Their primary role is to:

1. Execute quotes.
2. Compute candidate settlements that maximize user surplus, considering various factors like tokens and gas usage, and speed.
3. Compete to provide the best optimization for swap intents.
4. Utilize diverse liquidity sources, including direct matches, Automated Market Makers (AMMs), Request for Quote (RFQ) systems, Market Makers (MMs), and other aggregators.
5. Earn solver fees on target chains (paid in buy tokens) and emissions based on their performance, operating on a winner-takes-most model.

Validators (Canonical State and Attestation): Validators play a crucial role in maintaining the network’s integrity and facilitating the auction process. Their responsibilities include:

1. Collecting quotes and swap orders through distributed APIs.
2. Computing and publishing batches of swap intents for solvers to compete on.
3. Collecting solutions from miners and benchmarking them against each other.
4. Co-signing the best solution and ensuring its execution on-chain.

Settlement Contracts: These smart contracts reside on the target blockchains (e.g., Base). They are responsible for:

1. Verifying user signatures and nonces to prevent replay attacks.
2. Checking order/intent expiries, time-in-force rules, partial-fill conditions, and minimum notional values.
3. Enforcing price bounds, such as `minOut` and slippage for swap intents.
4. Binding to a specific `snapshotId` and `validUntilBlock` freshness window.
5. Verifying the validator quorum attestation over the settlement digest before moving tokens.

Emissions and Economics:

Minotaur’s economic model is designed to reduce user costs and incentivize network participants through a phased approach:

• Launch Phase (Months 0–1): Subnet emission activation. Validators run burn code, meaning no miner emissions initially. Focus is on finalizing the initial codebase and releasing training code for miners.
• Training Phase (Months 1–3): Miners receive emissions weighted by useful work (uptime, fill rate, correct settlements, outperforming competitors). Validators receive emissions for canonical state, scoring, and timely attestations (uptime/latency + consensus-alignment). The subnet accrues alpha to fund audits, infrastructure, grants, and development.
• Release Phase (Months 3–6): Miners begin earning solver fees directly from swaps (expressed in BUY tokens from optimization deltas) and continue to earn emissions. Validators start executing settlements and continue to receive emissions for evaluation/security. The subnet continues to accrue alpha, potentially receiving a fraction of protocol fees for strategic deployment, reserves, or alpha buybacks.

Rewards Design (Applies in all phases):

• Miner rewards/fees are weighted by useful work (uptime, fill rates, correct settlements, low revert rate).
• Validator rewards are based on uptime, latency, and alignment with consensus scoring, with penalties for manipulation or outliers.
• Public leaderboards enhance transparency and competition.

Settlement on Target Chains:

• Executors: Any executor (validator or third party) can submit an attested `SettlementBundle` within its validity window. Executors may earn small rewards but risk slashing for failed submissions.
• Contract Verification: Settlement contracts verify user signatures, order expiries, price bounds, snapshot binding, and validator quorum attestations before token transfers.