The community is now seeing a large engagement rate for Tau Protocol and BTCST, but some of us here are quite new, especially to the world of synthetic assets. Could you talk about what is Tau Protocol to those who have just been introduced to the project?
Now, back to this question:
The Tau Protocol is a new method for synthetizing and stabilizing digital assets. The first implementation reuses existing infrastructure, in this case, tokenized hashrate from BTCST to “synthetically mine” new assets.
To synthesize a τAssets, the τ protocol requires the staking of hashrate tokens collateralized by the relevant PoW hashrate and the forgoing of PoW rewards in return for the synthetic versions. For example, synthesis of τBitcoin would require synthetic mining with hashrate tokens collateralized by standardized Bitcoin hashrate.
The combination of staking with the relevant PoW hashrate and the surrendering of PoW rewards represent hashrate consumption, imparting inherent value into the resultant synthetics.