Talos’s tokenomics are engineered to support its high-coordination, high-yield model. The native TALOS token underpins the entire ecosystem—serving as both the medium of exchange and the unit of governance. Here’s how it all comes together:

Treasury-Backed Value

• Asset-Backed Security: TALOS is backed by a diversified treasury of yield-bearing assets native to the Arbitrum ecosystem. This tangible reserve creates a floor of intrinsic value that grounds the token’s market price.

• Dynamic Supply and Reward Distribution: Staking rewards are dynamically minted along a bonding curve, which scales with the level of cooperative staking. As more users stake and the treasury grows, the protocol mints additional tokens proportionally—ensuring that rewards are value-supported rather than purely inflationary.

Protocol-Owned Liquidity and Capital Efficiency

• Pooling and Efficient Deployment: By owning significant liquidity and pooling assets, Talos can deploy capital across a suite of yield strategies with greater efficiency. This shared pool minimizes risk while maximizing returns.

• Value Accrual: As the treasury earns yield, profits are either reinvested or used to buy back TALOS tokens, thereby increasing their backing. This continuous value loop ensures that long-term stakers benefit directly from the protocol’s success.

Governance and Utility

• Unified Token Model: TALOS serves both as a governance token and as a means to access staking rewards. This unified approach prevents utility fragmentation and concentrates value within a single asset.

• Demand and Sinking Mechanisms: Additional use cases (such as collateral for vault access or fee reductions) create organic demand, ensuring that the token’s value is sustained as the ecosystem grows.

Talos’s tokenomics are designed to create a self-reinforcing economy: the more the community collaborates through staking and active governance, the stronger the treasury grows, which in turn enhances token value and rewards.

NOTE: UNDER DEVELOPMENT SUBJECT TO CHANGE

General Introduction

Talos is a pioneering protocol in decentralized finance (DeFi) that seamlessly blends advanced AI-driven treasury management with community-focused governance. Designed for a new era of financial innovation, Talos empowers users to participate in a dynamic ecosystem where collective action drives sustainable growth.

Core Elements

AI-Managed Treasury

Leveraging cutting-edge analytics, Talos actively manages a diversified portfolio of yield-bearing assets. By deploying dynamic strategies, the protocol ensures maximum returns while effectively mitigating risk. The integration of Trusted Execution Environment (TEE) based execution enhances this process by providing a secure and isolated environment for critical computations. This TEE integration allows for:

• Secure Data Processing: Sensitive data and AI models are processed in a secure enclave, reducing the risk of manipulation or external attacks.

• Protocol Autonomy: TEE-based execution ensures that the AI agent operates with high reliability and low latency, essential for timely treasury rebalancing and strategy execution.

• Trustless Operations: Users can trust that the underlying computations are executed as programmed, with minimal risk of tampering or external interference.

Decentralized Governance

Talos distributes decision-making power across its community. Through integrated social media-based voting and a delegation system, every token holder has a direct role in shaping the protocol's future. This decentralized approach ensures that governance remains transparent, participatory, and adaptive to evolving market conditions.

Yield-Focused Tokenomics

At the heart of Talos is a native token backed by a robust portfolio of income-generating assets. Through innovative mechanisms such as bonding and staking, the protocol creates powerful incentives for the community to concentrate their capital into high-yield opportunities. The yield-focused design ensures that returns are driven by real, productive use of capital rather than speculative emissions.

Stag Hunt Dynamics

Talos employs a stag hunt model to encourage deep, coordinated participation. By setting a higher cooperative reward outcome (10,10) versus a lower, non-cooperative baseline (3,3), the protocol aligns individual contributions with the collective goal of unlocking superior long-term rewards. This game-theoretic approach incentivizes participants to commit fully to the protocol’s vision, maximizing yield and enhancing overall treasury performance.

Focus on the Arbitrum Ecosystem

Talos will concentrate its efforts on yield-bearing opportunities within the Arbitrum ecosystem. By tapping into Arbitrum’s scalable infrastructure and diverse DeFi landscape, Talos is well-positioned to leverage innovative yield strategies and provide enhanced value to its participants. The efficiency and low fees on Arbitrum create an ideal environment for dynamic, AI-driven treasury management.

The Talos Vision

Talos is more than just a protocol—it is an evolving ecosystem where AI innovation meets decentralized collaboration. By aligning individual incentives with the collective good, Talos sets a new standard for secure, adaptive, and community-driven financial systems. With TEE-based execution ensuring robust protocol autonomy, Talos offers a pathway to meaningful, long-term engagement and growth, particularly within the dynamic environment of Arbitrum.

Talos’s staking model goes far beyond simply locking tokens—it transforms staking into a strategic coordination game. Drawing inspiration from the stag hunt paradigm in game theory, Talos incentivizes deep, coordinated participation through dynamic, protocol-managed staking rewards. This approach ensures that when the community unites, everyone reaps significantly higher yields.

The Stag Hunt Dynamic

In the stag hunt framework:

• Cooperative Outcome (Hunt the Stag): When the majority of TALOS token holders stake their tokens, the protocol can confidently deploy its treasury into high-yield opportunities. This coordinated participation unlocks a superior reward curve—a (10,10) outcome—reflecting robust capital concentration and intelligent strategy execution.

• Non-Cooperative Outcome (Hunt the Hare): Conversely, if stakers act in isolation or only partially commit, the protocol defaults to more conservative strategies, leading to a (3,3) outcome. This safe but lower yield reflects the missed opportunity of collective action.

How It Works

Token Locking

Staking TALOS signals a long-term commitment, enabling the protocol to optimize asset allocation and execute strategic treasury management.

Delegation and Governance

Stakers delegate their voting power to trusted stewards. This collective signal ensures that the protocol’s strategic decisions align with the community’s shared interests.

Protocol-Managed APR

Talos’s staking APR is dynamically managed using advanced analytics:

• Dynamic Rewards and Risk-Weighted Incentives: The AI continuously monitors staking participation and market conditions. As cooperative staking increases, the reward function scales upward—boosting yields in line with the cooperative (10,10) outcome.

• Adaptive Yield Management: If staking remains fragmented or shallow, the protocol adjusts the APR downward to reflect a more cautious, risk-averse strategy, similar to the (3,3) outcome.

• Optimization Based on Stag Hunt Dynamics: This mechanism ensures that the rational choice for every participant is to join the cooperative effort. Unified staking enables the protocol to optimize yields and enhance overall treasury performance.

Collective Impact

Talos’s innovative staking model converts individual contributions into a collective force:

• Enhanced Treasury Management: Coordinated staking increases the protocol’s confidence to deploy funds into high-yield strategies, ultimately boosting returns.

• Aligned Incentives: The dynamic, protocol-managed APR incentivizes every token holder to stake deeply and consistently, ensuring that the benefits of collective action are shared across the community.

• Optimized Yield Generation: Continuous real-time analytics allow Talos to adjust rewards dynamically, matching individual risk with the overall strength of community participation.

In summary, Talos transforms staking from a passive act into a powerful, coordinated strategy. By leveraging the stag hunt dynamic and dynamic APR management, the protocol ensures that deep, collective participation drives superior yields and long-term value for all stakeholders.

Talos introduces a sophisticated bonding mechanism that allows users to exchange ETH for our native protocol token. This mechanism is designed to enhance treasury performance and promote sustainable growth while integrating seamlessly into our AI-driven treasury management framework.

Overview

The bonding process is a structured method whereby users contribute ETH in exchange for our token at a discounted rate. The mechanism is engineered to support long-term stability and value generation within the Talos ecosystem. By utilizing a dynamic, AI-managed release strategy, the protocol maintains a healthy inflation rate, ensuring that token distribution aligns with overall treasury health.

Bonding Mechanism

Asset Exchange

• ETH Contribution: Users deposit ETH, which is converted into the protocol token according to a predetermined bond formula.

• Discounted Allocation: Tokens are issued at a rate that reflects a discount relative to current market conditions, rewarding early participation and commitment.

Time-Locked Vesting

• Gradual Release: Instead of receiving tokens in full immediately, bonded tokens are released over a designated vesting period.

• Stability and Incentives: This vesting schedule mitigates sudden token influxes into the market and encourages long-term engagement from participants.

Dynamic Rate Adjustment

Talos employs an AI-driven mechanism to adjust the token release rate dynamically. This system is designed to:

• Maintain Sustainable Inflation: The AI continually monitors protocol performance and market conditions to fine-tune the token release schedule.

• Enhance Treasury Management: Adjustments are made to balance token supply with treasury growth, ensuring that rewards remain competitive while protecting long-term value.

• Respond to Market Conditions: In times of heightened demand or market volatility, the mechanism adapts to maintain equilibrium between token issuance and market supply.

Single-Token Focus

Initially, the bonding process will involve a single native token. This focus allows for streamlined operations and clear, targeted economic incentives, ensuring that each ETH contribution directly reinforces the protocol’s treasury and yield-generating strategies.

Conclusion

The Talos bonding mechanism is a cornerstone of our broader strategy to merge advanced AI management with robust decentralized governance. By offering a structured, dynamic approach to token issuance, Talos ensures that every participant contributes to a resilient and sustainable financial ecosystem. This sophisticated approach underpins our commitment to long-term value creation and strategic growth within the decentralized finance landscape.

Talos’s treasury is managed by an AI-powered vault strategy engine that deploys assets into high-yield opportunities using advanced, multi-vault tactics. Leveraging the ERC4626 standard, Talos ensures that each vault is secure, composable, and transparent—providing a consistent interface for dynamic asset allocation and real-time rebalancing.

Key Benefits of ERC4626

• Standardized Interface: ERC4626 provides a uniform API across all vaults, simplifying integration with other protocols and ensuring robust security practices.

• Interoperability: With a consistent ERC4626 framework, Talos can easily shift capital between vaults. This enables seamless rebalancing as the protocol converts vault holdings back to ETH—a common base token.

• Transparency and Composability: The standardized nature of ERC4626 allows for clear tracking of each vault’s performance. This transparency enables the AI to layer and combine strategies for maximum capital efficiency.

Advanced Multi-Vault Strategies

Talos deploys complex strategies that optimize the treasury’s yield and risk profile:

1. Dynamic Rebalancing Between Vaults: All vaults operate with ETH as the deposit/withdrawal token. Using the convertToAssets function, Talos converts vault holdings into their equivalent ETH value. This enables:

   • Seamless Rebalancing: Assets can be reallocated across different vaults based on real-time performance.

   • Standardized Valuation: ETH serves as the consistent baseline for assessing risk and reward across vaults.

   • Optimal Capital Deployment: The AI continuously monitors performance and shifts capital into vaults offering higher yield or better risk-adjusted returns.

2. Complex Strategy Formulation:

   • Multi-Asset Leverage: The protocol can deploy ETH into vaults that in turn invest in derivatives, lending, or liquidity pools.

   • Yield Optimization Algorithms: The AI evaluates real-time market data and directs assets where they can generate the highest yield.

   • Risk Management: Converting all vault values to ETH provides a unified risk metric, allowing for a balanced and diversified treasury.

The Role of AI

Talos’s AI is central to the vault strategy:

• Real-Time Market Analysis: Continuously monitors the Arbitrum ecosystem to identify and exploit yield opportunities.

• Automated Rebalancing: Executes the convertToAssets function and rebalances funds across vaults without manual intervention.

• Adaptive Learning: Refines strategies over time based on historical performance and emerging trends, ensuring that the treasury always pursues the best opportunities.

In essence, Talos’s vault strategy transforms a collection of individual ERC4626 vaults into a unified, agile treasury that maximizes yield while maintaining robust risk management—all anchored by the consistent value of ETH.

By directing funds to various yield-bearing strategies can set a higher cooperative reward outcome through several design mechanisms that align individual actions with collective benefits. Here are some potential approaches:

• Tiered Reward Multipliers: Introduce reward tiers that increase as the total amount of staked funds crosses specific thresholds. When a critical mass of participants cooperates by staking, the protocol activates higher multipliers for yields generated by the underlying strategies.

• Bonus Yield for Pooled Capital: Allocate a portion of the protocol’s revenue as a bonus pool. When staked funds are pooled together and deployed in yield strategies, a share of this bonus is distributed proportionally to participants, rewarding collective action over individual, isolated staking.

• Dynamic Rebalancing Incentives: Adjust staking rewards dynamically based on how efficiently the funds are being deployed into high-yield strategies. If a larger proportion of assets is concentrated and effectively managed, stakers receive additional yield rewards or reduced performance fees.

• Governance-Linked Rewards: Incorporate governance incentives where active participation in decision-making (e.g., voting on yield strategies) unlocks additional rewards. This not only encourages staking but also fosters community collaboration, which can lead to improved strategy performance and higher overall yields.

• Performance-Based Bonuses: Implement a system where a portion of the generated yield is set aside as performance bonuses. If the yield strategies outperform a predetermined benchmark due to high cooperation (i.e., concentrated staked funds), these bonuses are triggered and distributed to stakers.

Each of these mechanisms is designed to create a feedback loop where the more the community participates collectively, the better the performance of yield-bearing strategies. By emphasizing the benefits of pooling resources, the protocol naturally incentivizes participants to cooperate, aiming for a higher payoff outcome that surpasses the safe, lower-yield alternative.

ERC4626 Standard

The ERC4626 standard defines a uniform interface for yield-bearing vaults, enabling consistent behavior and seamless integration with other DeFi protocols. Key components include:

• Tokenized Vault Shares: Vaults issue ERC20-compliant tokens that represent fractional ownership of the underlying assets. This tokenization facilitates easy tracking and transferability, while also allowing for compatibility with other ERC20 tokens.

• Standardized Deposit and Withdrawal Methods: The interface provides functions such as deposit(), mint(), withdraw(), and redeem(), ensuring predictable and secure asset flow into and out of the vault. These functions handle the conversion between the underlying asset and vault shares based on the vault’s performance.

• Transparent Accounting with Price Per Share: ERC4626 includes a mechanism for calculating the "price per share," which reflects the vault's performance by incorporating yield accumulation. This dynamic metric offers an on-chain, transparent measure of asset growth over time.

Technical Benefits for Treasury Management

Automated Yield Accumulation and Compounding

• Integrated Yield Strategies: ERC4626 vaults are designed to interact with various yield-generation strategies. The underlying smart contracts can autonomously reinvest earned yield, allowing for compounding returns without manual intervention.

• Dynamic Performance Metrics: The continual update of the price per share ensures that the accrual of yield is automatically factored into each user's share value, providing a real-time reflection of asset performance.

Enhanced Security and Standardization

• Consistent and Audited Interfaces: By adhering to the ERC4626 standard, vaults benefit from a well-audited, industry-accepted interface, reducing the likelihood of implementation errors. This standardization enhances security across all interactions.

• On-Chain Transparency: Every deposit, withdrawal, and yield event is recorded on-chain. This level of transparency allows for rigorous auditability and fosters trust among stakeholders regarding asset management and yield generation.

Flexibility and Composability

• Interoperability Across Protocols: ERC4626 vaults are inherently composable, meaning they can integrate with lending platforms, decentralized exchanges, and other yield optimization protocols. This opens the door to complex, multi-strategy yield farming and risk diversification.

• Adaptive Strategy Deployment: The vault architecture allows for dynamic reallocation of assets in response to evolving market conditions. This flexibility ensures that treasury assets are continuously optimized for maximum yield while mitigating exposure to market volatility.

Improved Capital Efficiency

• Active Asset Utilization: Allocating treasury assets to ERC4626 vaults transforms them from passive holdings into actively managed instruments that generate compounded returns. This proactive management approach maximizes the utility of each asset.

• Risk Mitigation Through Diversification: With the ability to interface with multiple yield strategies and protocols, ERC4626 vaults offer a built-in diversification mechanism. This reduces systemic risk and enhances the overall stability of the treasury.

Conclusion

The technical advantages of ERC4626 vaults—ranging from automated yield compounding and transparent accounting to robust security and adaptive asset management—make them an optimal solution for treasury management. By integrating ERC4626 vaults, Talos ensures that its treasury is not only secure and transparent but also dynamically optimized to achieve superior capital efficiency and sustainable growth.

Launch Strategy

Talos is set to launch with a fair launch model designed to ensure broad community participation, transparency, and long-term value creation. This launch strategy is integral to our vision of building a robust, AI-managed treasury with decentralized governance and dynamic yield strategies on Arbitrum.

Fair Launch and Preseeded Liquidity

• Fair Launch: Talos will be launched with a fair distribution mechanism that allows all participants to join on equal footing. No preferential treatment is given, and the token distribution is managed in a way that promotes widespread community engagement.

• Preseeded Liquidity: In order to establish a solid foundation, the team will preseed liquidity at the floor backing value. This liquidity is bonded by the team to ensure a strong base of value and confidence in the protocol.

  • Locked Liquidity: The preseeded liquidity will be locked and utilized for initial protocol management, serving as a safeguard and a resource to support early-stage yield opportunities.

  • Backing Value: By bonding liquidity at a set floor value, Talos creates a reserve that underpins the token’s value and helps prevent price volatility during the early stages.

Inflation and Bonding Mechanisms

To incentivize community participation and support protocol growth, Talos incorporates carefully designed inflationary mechanisms:

• Bonding Mechanism: New liquidity can be bonded into the protocol, creating an inflationary supply that rewards participants. This process not only encourages long-term commitment but also ensures that the treasury is continually bolstered by fresh capital.

• Staking Rewards: Staking is a core pillar of Talos’s economic design. Participants who stake their tokens help secure the protocol and enable the AI-driven treasury to deploy capital into high-yield strategies. In return, they earn rewards that are distributed through inflationary emissions.

  • For more details on how staking rewards work and the cooperative dynamics behind them, please refer to our Staking page.

A Launch Built for Long-Term Growth

Talos’s launch strategy is aligned with its broader vision:

• Transparency: The fair launch and preseeded liquidity model ensures that every participant can verify the protocol’s initial conditions on-chain, establishing trust from day one.

• Security and Stability: With liquidity locked and bonded at the floor value, the protocol is well-capitalized to handle early-stage market fluctuations and provide a stable base for further growth.

• Community-Driven Inflation: The inflation via bonding and staking rewards is designed to promote deep, coordinated participation. As more participants bond and stake their tokens, the protocol’s treasury grows—amplifying the yield-bearing opportunities across the Arbitrum ecosystem.

• Alignment with the Talos Vision: This launch model perfectly complements Talos’s core elements: an AI-managed treasury, decentralized governance, yield-focused tokenomics, and stag hunt dynamics that incentivize deep, cooperative participation. It sets the stage for Talos to evolve into a fully autonomous and continuously improving ecosystem.

In summary, Talos’s launch is engineered to establish a resilient foundation for long-term growth. By combining fair launch practices, preseeded and locked liquidity, and inflation mechanisms through bonding and staking, Talos creates an environment where collective action drives sustainable success.

Talos’s evolution is mapped out in a series of strategic phases designed to progressively build a fully autonomous AI agent. This agent will operate within a Trusted Execution Environment (TEE) for enhanced security and performance, while governance evolves from manual oversight to full community-driven, automated decision-making.

Below is an overview of the roadmap milestones:

Phase 1: Establishing the Foundation

In this initial phase, Talos’s core functionality is implemented with manual oversight to ensure stability and security:

• Manual Proposals: Early AI behavior and treasury management strategies are proposed manually. These proposals are generated by trusted developers and community experts.

• Multisig & Delegate Review: Proposed changes are reviewed and approved by a multisignature wallet and a group of selected delegates. This ensures that early decisions have strong human oversight and accountability.

• Deployment in a TEE: Even at this stage, critical operations run inside a Trusted Execution Environment (TEE) to safeguard sensitive computations and data flows.

Phase 2: Community-Driven Governance and Live Strategy Updates

The second phase focuses on transitioning from centralized review to a more decentralized, community-driven process:

• Active Governance: Upgrades and strategy changes are now proposed, discussed, and voted on by the broader community. This builds on the early multisig framework by incorporating live, dynamic feedback from all token holders.

• Live Strategy Updates: The AI agent begins integrating real-time market data to update investment strategies autonomously, while still requiring community approval via governance votes.

• Increased Transparency: All changes and decision-making processes are logged on-chain and publicly audited, ensuring transparency and accountability.

Phase 3: Self-Improving AI with Permissioned Experimentation

At this stage, the AI agent matures further, incorporating self-improvement mechanisms while operating under permissioned experimentation:

• Self-Improvement Mechanisms: The AI agent is enhanced with machine learning capabilities that allow it to analyze past performance and adjust its strategies autonomously. However, these experiments are permissioned—meaning new strategies must be tested and validated in a controlled environment before being fully adopted.

• Controlled Experimentation: Experimental strategies are deployed in sandboxed settings within the TEE, ensuring that any unproven behavior does not impact the main treasury until approved by governance.

• Evolving Governance: The role of community governance continues to grow, providing oversight on AI experiments and ensuring that adjustments align with the long-term goals of the protocol.

Phase 4: Fully Autonomous Agent with Oversight

In the final phase, Talos achieves full autonomy while maintaining essential oversight mechanisms:

• Autonomous Decision-Making: The AI agent will be capable of proposing and executing upgrades automatically, relying on its learned models and real-time data. It will operate with minimal human intervention, ensuring swift and efficient treasury management.

• Continuous Oversight: Despite full autonomy, the system retains oversight through established governance protocols. Key decisions are subject to review via transparent, on-chain mechanisms, ensuring that the community retains ultimate control.

• Adaptive, Self-Evolving Protocol: As a nomic protocol, Talos will continually self-modify based on performance data and community feedback. This ensures that its operational rules evolve to meet emerging challenges in the dynamic DeFi landscape.

Summary

Talos is on a transformative journey—from a manually supervised system to a self-evolving, fully autonomous AI agent that optimally manages the treasury within a secure TEE. Through each phase, governance becomes more decentralized and community-driven, ensuring that while the AI grows smarter, the community retains the power to shape its evolution. This roadmap sets a new standard for agentic DeFi protocols, blending cutting-edge technology with transparent, adaptive governance.

Talos utilizes an upgradeable governance framework that leverages social media for transparent, public decision-making. This system ensures that token stakers actively support their chosen delegates—referred to as governance stewards—who manage proposals and facilitate voting.

Key Components

1. Token Staking and Delegation

• Staking Requirement: Users stake tokens to gain voting power and commit to the governance process. This mechanism ensures that participants have a vested interest in the protocol's success.

• Delegates’ Role: Delegates register their social media handles (initially on X/Twitter) to be publicly accountable, representing community sentiment and overseeing governance proposals.

• Delegation Incentives: Active delegation is rewarded with enhanced voting power or additional token benefits, whereas non-delegators receive reduced rewards. This incentivizes responsible participation and active engagement.

• Equal Influence: Every delegate wields equal influence, irrespective of the stake size, ensuring that governance remains balanced and community-focused.

2. Social Media Integration for Voting

• Voting via Social Media: Voting is conducted through social media polls on X/Twitter, with only registered delegates eligible to vote. This approach ties governance decisions to verifiable, public identities.

• Regular Steward Renewal: A monthly voting process is implemented to ensure that delegates remain active and accountable. This regular renewal maintains the integrity and responsiveness of the governance system.

• Proposal Submission: Anyone can submit proposals for consideration by the delgates

3. Participation and Accountability Mechanisms

• Mandatory Voting: Delegates are required to participate in every governance vote. Non-participation incurs penalties, enforcing a consistent level of engagement.

• Delegate Reassignment: Inactive delegates can be replaced, ensuring that the pool of governance stewards remains dynamic and responsive to the community’s needs.

Process Flow

Onboarding and Staking

• Token Staking: Users stake tokens to gain governance rights and select a delegate. The system of benefits and penalties encourages responsible delegation and active participation.

Proposal Lifecycle

• Submission: Proposals are submitted with a nominal token deposit, ensuring that only serious ideas are considered.

• Community Screening: Submitted proposals are screened by the community before being posted as social media polls.

• Voting: Registered delegates participate in the voting process via X/Twitter polls, ensuring that decisions are made transparently and publicly.

Post-Vote Enforcement

• Results Aggregation: Voting outcomes are aggregated and published, offering clear insights into the community’s preferences.

• Reward Distribution: Rewards are distributed to active participants, and penalties are imposed on non-participants to maintain high levels of accountability.

• Ongoing Steward Votes: Monthly steward votes help maintain an active and accountable delegate pool, ensuring that governance remains effective and adaptive.

Conclusion

Talos's upgradeable governance framework integrates token staking, social media-based voting, and robust accountability mechanisms to ensure transparent, responsible, and community-driven decision-making. This system aligns the interests of all participants, fostering a resilient and dynamic governance structure.

Overview

Talos is built to adapt. As the protocol grows, so too must the intelligence that manages its treasury. The Talos AI Agent is designed to evolve in response to new strategies, emerging technologies, and changing market conditions. Upgradeability is a first-class citizen in the system—made possible through modular smart contracts and an active, decentralized governance layer.

Modular & Upgradeable Architecture

Talos is structured to allow seamless upgrades without disrupting ongoing operations.

• Modular Contracts: Core functionality is split into upgradable modules.

• Composable Strategies: ERC4626 vaults allow plug-and-play support for new strategies.

• Safe Evolution: Changes are versioned and auditable, with rollback support in case of emergency.

This ensures that the AI agent’s logic, models, and data flows can evolve over time without a full redeploy.

Governance-Driven AI Evolution

The AI agent that powers Talos isn’t static—it grows smarter with every governance cycle.

How Governance Fuels AI Upgradeability

• Propose Upgrades Any token holder can submit proposals for agent improvements, including:

  • New investment strategies

  • Risk tolerance adjustments

  • Data sources or oracles

  • Reward distribution logic

  • Behavioral changes in volatile conditions

• Delegate-Led Review Delegates evaluate and endorse proposals, adding human oversight before implementation.

• Vote via X (Twitter) All upgrades pass through a transparent, public voting process on X.

  • Polls are only open to registered stewards.

  • On-chain logic tracks outcomes and triggers upgrades after passing thresholds.

• Continuous Feedback Loops Regular delegate elections and participation-based incentives ensure upgrades are evaluated frequently and with fresh perspective.

Talos as a Nomic Protocol

Talos embodies the principles of a nomic system—where the rules of the game are not static but subject to continuous evolution through the very processes they establish.

• Self-Modifying Rules: The protocol’s governance framework is designed to be inherently flexible. Changes to the rules governing the AI agent and treasury management can be proposed and enacted by the community, allowing Talos to adapt its own mechanics over time.

• Dynamic Rulemaking: Similar to the game of Nomic, every participant in Talos has the opportunity to influence the rules. Whether it’s refining investment strategies or updating security measures, every approved proposal contributes to a continuously evolving protocol.

• Empowering Collective Evolution: By allowing token holders and delegates to directly impact the operational logic, Talos ensures that the system can self-correct and improve autonomously. This adaptability is central to managing the complex, shifting landscape of decentralized finance.

• Transparent & Iterative Process: All changes are recorded on-chain and made public through social media integration, ensuring that the evolution of the protocol is transparent and subject to community scrutiny. This creates an environment where innovation is encouraged and the protocol is always in a state of improvement.

Contribution Channels

Talos transforms its community into a network of intelligence contributors.

• Training Data Contributions: Token holders may supply signals, analytics, or datasets that help refine the AI.

• Simulation Results: Backtested strategies or simulations can be attached to proposals to support suggested upgrades.

• Open Agent Development: The AI core is open source and modular, allowing external developers to suggest or fork new agent logic.

Safeguards & Security

Upgradeability doesn’t mean instability. Talos includes mechanisms to keep governance secure:

• Time-Delayed Execution: All critical upgrades have a built-in delay before activation to allow for community inspection.

• Slashing for Malicious Behavior: Delegates who vote for harmful or spammy upgrades risk losing part of their stake.

• Emergency Pauses: The protocol retains the ability to temporarily pause AI agent upgrades under community consensus in case of bugs or unexpected behavior.

Roadmap to Autonomous AI

Summary

Talos is more than a yield aggregator—it's a self-evolving organism. The protocol’s upgradeable AI agent learns from the community, adapts through governance, and drives collective value creation. With a modular framework, active social-based governance, and a nomic design that allows its rules to evolve, Talos is designed to continuously improve—setting a new standard for agentic DeFi protocols.

Delegate Responsibilities

Delegates play a critical role in maintaining and guiding the protocol's evolution. They are elected by token holders to serve as stewards of the protocol, evaluating proposals, implementing upgrades, and ensuring the system evolves in a sustainable and thoughtful manner. Like all aspects of Talos, delegation is not permanent. If the community determines that a new form of leadership or coordination is more effective, the system can evolve.

Core Responsibilities

Delegates are empowered by the community to:

• Evaluate Protocol Upgrades Review and assess proposed upgrades, parameter changes, and technical improvements.

• Vote on Modifications Actively participate in governance by voting on protocol changes that impact the network’s functionality or direction.

• Maintain the Protocol Monitor the health of the protocol, respond to urgent issues, and help guide ongoing development efforts.

Delegates are expected to act in the best interest of the protocol and its users, balancing agility in development with thoughtful governance.

Checks and Balances

While delegates have decision-making authority, they remain accountable to token holders. Governance mechanisms such as:

• Delegate replacement

• Proposal vetoes

• Time-locked implementations

can be enacted by the broader community to ensure transparency and decentralization are preserved.

Post launch, it will be important to develop and present a way for the community at large to veto and/or vote to enact emergency actions to modify the current leadership if things are not being performed in a satisfactory manner. This should be codified and prioritized post launch so as to give token holders the ability address issues without waiting for a new delegate election.

Delegates do not hold unchecked power; instead, they exist to reduce governance overhead while maintaining accountability and agility in protocol development.

Incentivization

To support sustained engagement and high-quality governance, delegates may be fairly compensated. Incentive models can include:

• A direct token allocation

• Ongoing treasury payments

These should be designed to:

• Reward meaningful participation

• Avoid undue dilution or unsustainable cost to the protocol

• Be proposed and agreed upon post-launch for fairness and alignment

Delegates will have the opportunity to present incentive frameworks to the community for approval.

Why Delegation Matters

Delegates help scale governance by making protocol maintenance more manageable. Token holders can focus on high-level decisions and influence the delegates in open discussion, but the delegates should be trusted to handle day-to-day evaluations and improvements.

By electing responsible delegates, the community ensures the protocol evolves smoothly, securely, and in alignment with its long-term vision.

Talos represents a forward-thinking evolution in decentralized finance, combining cutting-edge AI management with a robust, socially driven governance framework. By integrating real-time asset management, yield generation, and community engagement, Talos not only optimizes treasury performance but also ensures that every token holder has a voice in shaping its future.

The protocol’s design—emphasizing collective contributions, decentralized decision-making, and continuous improvement—positions it as a benchmark for secure, adaptive, and community-led financial systems. As Talos evolves, it will continue to pioneer new intersections between artificial intelligence, decentralized governance, and financial innovation.