Strategic TAO Loan for Enhanced 18% Yield

Introduction

Roko DAO has the opportunity to strategically deploy a portion of its treasury reserves into a secured TAO-denominated loan with a trusted partner within the Bittensor ecosystem.

This proposal outlines the loan structure, terms, and rationale for community approval. The agreement delivers a 6-month fixed return of 18% APY, significantly outperforming current Root staking yields while maintaining full $TAO exposure.

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Executive Summary

The proposed TAO Loan allows Roko DAO to earn a materially higher yield on idle treasury assets through a short-duration, secured, TAO-denominated agreement.

Key highlights: • 18% annualized return, 6-month term • Personally guaranteed repayment • Multisig-secured asset management • Maintains full $TAO exposure

This structure balances yield optimization with capital preservation, ensuring flexibility and transparency for DAO governance.

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Context

Roko DAO currently holds 580 $TAO stake on Root Subnet. This proposal seeks community approval to allocate one of the following amounts for loan deployment from Roko DAO to Roko Network Corp, which will be the managing entity of the loan agreement: • Option A: 100 $TAO • Option B: 125 $TAO • Option C: 150 $TAO

The objective is to generate enhanced yield from treasury reserves while preserving liquidity and DAO autonomy.

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Terms Overview

Parameters Principal: Selected amount (100 / 125 / 150 $TAO) Term: 6 months from date of transfer Interest Rate: 18% simple annual interest (TAO-denominated) Repayment: Principal + accrued interest returned in $TAO within 30 days after maturity Guarantee: Personally guaranteed by counterparty with verifiable on-chain assets exceeding loan value Security: Multisig wallet between parties established post-allocation to ensure secure fund management

The multisig ensures continuity of access and repayment protection, even under unforeseen conditions affecting the counterparty’s ability to process repayments.

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Extension Option

At maturity, both parties may mutually agree in writing to extend the loan for an additional 6-month term under identical terms (18% APY).

The extension must be finalized before the original maturity date. A new 30-day repayment window applies after the extended term.

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Strategic Rationale

Enhanced Yield

This loan offers an 18% annualized return, approximately 4x higher than the current Root staking benchmark (~4.95% APY via Mentat Minds optimization).

Capital Efficiency

Funds remain fully denominated in $TAO, allowing the DAO to maintain ecosystem exposure while generating superior yield.

Security

The agreement is personally guaranteed, secured by a multisig structure, and limited to a short-term duration, reducing counterparty and liquidity risk.

Ecosystem Alignment

This arrangement strengthens Roko DAO’s strategic positioning within the Bittensor ecosystem, fostering visibility and trust with aligned partners. The DAO’s participation reinforces its reputation as an active capital allocator supporting ecosystem growth.

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Confidentiality & Agreement Finalization

Upon successful DAO approval, a formal written agreement will be executed to codify the loan terms with the Roko Network Corp.

Privacy Commitments: • The recipient’s private identity remains confidential. • Their public identity will be disclosed following: • DAO approval • Agreement signing • Fund allocation • Multisig establishment • Emergency access verification

This maintains transparency while respecting confidentiality obligations.

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Governance Process

Voting Options

✅ YES – Approve Loan Deployment (Select from predetermined amount: 100 / 125 / 150 $TAO)

❌ NO – Maintain current of Bittensor Root stake amount.

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Conclusion

This proposal represents a low-risk, high-yield opportunity for Roko DAO to enhance treasury performance while preserving exposure to $TAO. The structure balances security, liquidity, and ecosystem alignment, consistent with the DAO’s mission of sustainable, intelligent capital deployment.