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+# BIT-0016: Subnet Deregistration
+
+- **BIT Number:** 0016
+- **Title:** Subnet Deregistration
+- **Author(s):** John Spiigot, Greg Zaitsev
+- **Discussions-to:** https://discord.com/channels/1120750674595024897/1346557046761324545
+- **Status:** Draft
+- **Type:** Core
+- **Created:** 2025-08-12
+- **Updated:** 2025-08-12
+
+## 🔍 Abstract
+
+This BIT proposes reenabling of subnet deregistration.
+
+## 🔧 Motivation
+
+Since the dTao launch, the non-functional subnets keep consuming emissions, as well as chain footprint and compute resources. The existing subnet deregistration (dissolve_network / remove_network) is no longer working correctly and is disabled.
+
+## 🧪 Specification
+
+The final specification is yet to be discussed. We can only propose several criteria to determine which subnets should be deregistered first. Note that because deregistration is an on-chain process, the criteria should only use data available on chain.
+
+- Lack of demand for subnet Alpha token
+- Low subnet price and emissions
+- Unfavorable ratio and/or values of subnet parameters such as TAO and Alpha pool liquidity, Alpha circulating, Alpha issued, Alpha burned, FDV, Alpha volume, etc.
+- Only allow deregistration of subnets which would have a higher value of Alpha from liquidation than from unstaking
+
+The current in-progress implementation may be used as a basis for such discussion, which is described below.
+
+### Subnet Pruning
+- Triggered when `SubnetLimit` is reached
+- **Step 1:** Exclude subnets still within `NetworkImmunityPeriod`  
+- **Step 2:** Among the rest, find the subnet with the lowest current emission  
+- **Step 3:** If multiple share the same emission, pick the one with the earliest registration timestamp  
+
+### Network Dissolution 
+
+- In `dissolve_network` / `remove_network`, perform full dTao cleanup:
+  - Return the registration cost to the owner (or owners in case if it was a crowdloan)
+  - Distribute remaining Tao to α-out stakers pro-rata
+  - Destroy all α-in and α-out stakes  
+  - **Adjust the owner’s returned lock cost** by subtracting the portion of total emissions the owner actually received (`owner_received_emission = E * get_float_subnet_owner_cut()`), so the final refund is `max(0, lock_cost - owner_received_emission)`.
+- Maintain **root-only** access to direct calls for now
+
+### Explicit Subnet Limit
+Add new sudo hyperparameter `SubnetLimit` starting at `256`.
+
+### High-Level Flow
+
+```mermaid
+flowchart TD
+    A[New Registration] --> B{Check Subnet Limit?}
+    B -->|No| C[Register New Subnet]
+
+    B -->|Yes| E[Prune a Subnet]
+    E --> F[Deregister]
+    F --> G[Register New Subnet]
+    
+    H[Deregistration<br/>] --> I[Destroy α-in/out]
+    I --> J[Distribute TAO]
+    J --> K[Remove Network]
+New Registration → check slot cap?
+  ├─ No → register network, grant immunity
+  └─ Yes → prune one subnet → deregister → register new
+Deregistration (manual or pruning) → destroy α-in/out → distribute Tao → remove network
+```
+
+## © Copyright
+
+This document is licensed under [The Unlicense](https://unlicense.org/).