Tapir Protocol docs
  • Introduction
  • User Guides
  • Architecture
  • Security & Risk Management
  • Tapir Cast of Characters
  • Tapir FAQ
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  • Tapir's Depeg Protection Marketplace
  • How It Works
  • Key Benefits
  • Why Tapir Stands Out

Introduction

Tapir Protocol is a decentralized depeg protection marketplace that redefines risk management in decentralized finance (DeFi). Unlike traditional insurance models that lock capital in unproductive reserves, Tapir enables users to buy or sell protection against asset depegs while keeping their assets fully productive. By merging yield generation with customizable risk mitigation, Tapir empowers investors to optimize their strategies without sacrificing returns.

Tapir's Depeg Protection Marketplace

How It Works

Tapir's marketplace allows users to trade depeg risk through tokenized protection contracts. Here's the core mechanism:

  1. Token Splitting: Users split their assets (e.g., sUSDe or any token_A) into two components:

    • DP (Depeg Protected Asset): Acts as insurance, compensating holders if the asset's value drops below a predefined threshold.

    • YB (Yield Boosted Asset): Amplifies returns by assuming depeg risk, sold to yield-seeking investors.

  2. Dynamic Trading: DP and YB tokens are traded on an integrated AMM, enabling real-time pricing of risk and yield.

  3. Capital Efficiency: All assets remain productive, generating yield even while used for protection.

Key Benefits

1. For Protection Buyers (DP Holders)

  • Hedge Risks Without Sacrificing Yield: Protect against depegs while maintaining your asset's yield potential.

  • Flexible Coverage: Choose protection periods (e.g., 30, 90 days) and customize exposure by trading DP/YB tokens.

2. For Protection Sellers (YB Holders)

  • Earn Premiums: Profit from underwriting depeg risk by selling YB tokens.

  • Capital Productivity: YB tokens derive value from the underlying asset (e.g., sUSDe), avoiding idle collateral.

3. For the DeFi Ecosystem

  • Liquidity for Risk: Creates a liquid market for pricing and transferring risk, addressing a critical gap in DeFi.

  • No Dead Capital: Eliminates inefficient models where insurance requires locking stablecoins or ETH.

Why Tapir Stands Out

1. Decentralized Risk Pricing

  • AMM-driven markets let supply/demand dynamically set the cost of depeg protection, reflecting real-time risk sentiment.

2. Time-Bound Pools

  • Protection pools expire after fixed durations (e.g., 90 days), enabling structured risk management and recurring opportunities for sellers.

3. Transparent Resolution

  • Automated depeg checks at pool expiry use on-chain price oracles to determine payouts, ensuring fairness and trustlessness.

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Last updated 2 months ago